China’s car sales continue downhill, but at slower pace

Car sales in China plunged an annual 43.3 percent in March and, though the downturn was less dire than last month, the world’s biggest car market struggled to recover from a prolonged demand slump that was exacerbated by the coronavirus outbreak, data showed on Friday.

February car sales in the country had dived 79 percent as the pandemic pummeled demand.

Still, March marked 21 months of decline in a row, with total auto sales down to 1.43 million units from the same month a year earlier, according to data from the China Association of Automobile Manufacturers (CAAM), the country’s largest auto industry association.

The number of new energy vehicles (NEVs) sold fell for the ninth straight month to 53,000 units. The number does not include Tesla’s sales, CAAM said.

“If we only consider domestic factors, we believe the industry in the second half of the year should be able to recover to the level of the same period last year,” said senior CAAM official Xu Haidong. “But it is still difficult to make up for first-quarter and first-half losses.”

China’s car market, which was already under pressure, has been badly hurt by the pandemic that has killed more than 3,300 people in the world’s second-largest economy.

CAAM estimated last month that China auto sales would drop by more than 10 percent in the first half of this year, and about 5 percent for the whole year if the outbreak is effectively contained before April.

Industry sales fell 8.2 percent last year, pressured by new emission standards in a slowing economy and trade tensions with the United States.

China’s foreign trade faces unprecedented challenges due to the pandemic that has spread to more than 200 countries, China’s assistant commerce minister Ren Hongbin said on Friday, amid growing fears of a deep global recession.

Ren told reporters during a briefing that a survey conducted by the ministry shows that trade firms across the board face difficulties from order cancellations or delays, and that new orders are also at risk.

He also said China is willing to boost trade relations with countries, including the US, under the new circumstances.

Shanghai stocks slid on Friday due to bleak factory activity data that pointed to a prolonged recovery, but ended the week with their biggest gains in five on hopes of more economic stimulus to shore up the economy.

China’s factory-gate prices fell the most in five months in March, with deflation deepening and set to worsen in coming months as the economic damage wrought by the coronavirus shuts down many countries.

The country reported a fall in new coronavirus cases on Friday, particularly imported and asymptomatic infections, although authorities fear a second wave of COVID-19 infections could occur as city and travel restrictions are lifted.