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April 8, 2020

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Tough year for light vehicles

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 by research firm IHS Markit.

Based on the latest estimates for March, Markit said light vehicle sales fell 42.1 percent year on year in the first quarter — and will drop 9.5 percent year on year in the second quarter, although this figure is based on COVID-19 being contained.

The firm’s estimates are also made without expectations of new government policies to stimulate the light vehicle market. IHS Markit forecasts output will drop 11.5 percent this year to 21.6 million vehi­cles, but will 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 closure of plants in Hubei Province.

Hubei Province resumed automobile manufacturing on March 11, although production recovery has been gradual. 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 the provincial capital, Wuhan.

IHS Markit also said the spread of COVID-19 in Europe may pose risks for automakers which purchase key compo­nents from Europe. But so far it has seen no direct impact on China’s car industry. China is also stepping up stimulus mea­sures to boost car sales.


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