China's light vehicle sales to fall nearly 10 percent: researchers
China’s light vehicle sales are predicted to fall 9.9 percent year on year to 22.4 million units in 2020, driven by a first-quarter plunge and weak demand, according to an industry report released by research firm IHS Markit on Monday.
Based on the latest estimations for March, the research firm said China's light vehicle sales declined by 42.1 percent year on year in the first quarter — and will drop by 9.5 percent year on year in the second quarter, though this figure is based on a situation where the spread of COVID-19 is contained.
The firm's estimations are also made without expectations of new government policies to stimulate the light vehicle market during the remainder of the year. Besides sales, IHS predicts production will drop 11.5 percent this year to 21.6 million vehicles, but will then grow 7.5 percent in 2021.
Light vehicles refer to those built for carrying passengers or goods, with a maximum weight less than 3.5 tons.
IHS Markit said that compared with February, its latest forecast in March takes into account an extended factory shutdown last month and supply chain disruptions caused by the extended closure of plants in Hubei Province.
Hubei Province resumed automobile manufacturing on March 11, though production recovery has been carried out gradually. With the COVID-19 outbreak in the province under control, the Hubei government has relaxed a number of restrictions to help companies return to normal production as smoothly as possible. As of March 26, Dongfeng Honda, Dongfeng and Dongfeng Peugeot Citroen have resumed production in Wuhan.
IHS Markit also pointed out that the spread of COVID-19 in Europe may pose risks for automakers which purchase key components from Europe and assemble them in China. However, at this stage the research firm has not seen a direct impact from this on China's automobile production. As the situation changes, it may reevaluate and adjust its predictions.
The country's top industry association, the China Association of Automobile Manufacturers, earlier said that China’s overall auto sales are set to drop 5 percent this year, driven by weak consumer demand and macroeconomic conditions.
China is stepping up stimulus measures to boost car sales across the country. The State Council extended subsidies for new-energy vehicles to 2022. The central government also provide support for Beijing, Tianjin, Hebei and other regions to eliminate diesel trucks with National-III-emission-standard and below. In order to prompt sales of used cars from those second-hand car dealers, the government will impose a 0.5 percent value-added-tax waiver between May 1 this year and the end of 2023.