Coronavirus / COVID – 19 threatens the Chinese Automobile Industry

The Coronavirus also called COVID – 19 now has become more unpredictable and widespread all over the world. Its impact is now been seen in the automotive industry. Global Automakers still say that the Coronavirus / COVID – 19 has not affected the North American automotive production and sales. However, it is highly expected that the Coronavirus / COVID – 19 will have a huge impact on the European and Asian automotive markets. Chinese companies are trying their best to restart production and manufacturing operations at their plants after the nationwide shutdown recently. This was done to prevent the spread of the Coronavirus among the huge number of workers working on the factories. But without a doubt, the Coronavirus / COVID – 19 has affected the automotive sector of China.

Moody’s agency has predicted that now both the Chinese auto sales and the global auto sales will face huge downfall because of the outbreak of Coronavirus. The American business and financial services company previously predicted that the global auto sales would see a decrease of up to 0.9 percent in the year 2020 compared to what it was in 2019 which was because of the global decline in automobile sales. But now with Coronavirus / COVID – 19 in the bigger picture, the new prediction from Moody’s agency says that the global auto sales will drop to 2.5 percent in 2020. Chinese auto production and sales will also see a huge downfall because of the outbreak. Moody’s agency has predicted that Chinese auto sales would now see a decrease of up to 2.9 percent in 2020.

The world’s largest car market is the Chinese automotive market and Wuhan is known as the “Motor City” which is the epicenter of the Coronavirus / COVID – 19 outbreak. Wuhan City is the capital of China’s Hubei Province and many major companies have their production plants in the city which includes the likes of Nissan, Honda, Peugeot Group, Renault, and General Motors. Honda is a major player in the Chinese automotive sector and 50 percent of the total production of its cars is from Wuhan. Wuhan is also China’s fourth-largest car producer and contributes to about 10 percent of the country’s entire car-making capacity and has produced a whopping 2.24 million vehicles in the year 2019 alone. With all the major auto companies closing their doors for the nationwide shutdown, companies like Tesla with its new factory Shanghai have also been shut down thus postponing the date of the production of its long-awaited and popular Model 3. Volkswagen which does production in China with the help of a partnership with SAIC has also postponed the production at all its Chinese plants to prevent the spread of Coronavius / COVID – 19.

All of these shut down from major auto companies have led to the downfall in the auto sales in the Chinese market. According to the data from the China Passenger Car Association (CPCA), the sales of cars in the country have decreased by up to 92 percent in the first half of February compared to the sales in the same time period in 2019. A recent forecast by China’s association of automobile manufacturers says that the Chinese auto sales will see a decline of 10 percent in the first half of the year and will overall result in a 5 percent decline for the entire year. According to IHS Markit, if the nationwide shutdown of all the production plants continues until the mid of March, the auto production in China will see a total reduction of 1.7 million vehicles this year. The annual Shanghai auto show which is one of the biggest auto shows on the planet has also been postponed due to the Coronavirus / COVID – 19 concerns.

The outbreak of the Coronavirus / COVID – 19 has not only affected the auto production and sales in China but also has huge impacts on other parts of the world too. It is known to everyone that China supplies parts and materials to many other parts of the world to carry on with the production works at the factories present there. Due to the nationwide shutdown of many factories in China, companies like Kia and Hyundai have stopped the production recently at several assembly lines in Korea. Nissan also announced that it will suspend its production operation of automobiles in Japan whereas Fiat Chrysler Automobiles might see one of its European plants being shut down by the end of February due to the ongoing epidemic. Although the operations are getting started phase by phase on many factories, it will take more time for the global auto market to get back to its normal flow with production and sales figures.

The post Coronavirus / COVID – 19 threatens the Chinese Automobile Industry appeared first on Market News Bizz.

About the author

Sharan Stone

Sharan Stone

Sharan comes to Market Research Tab with more than 7 years of experience as an editor. Sharan has his fingers firmly placed on the pulse of the business world and he covers retail, construction, and other industries as an editor for Market Research Tab. Email: [email protected]

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