Coronavirus lockdowns cost China’s car sector another 400,000 vehicles in May, though ‘revenge spending’ may soon provide a boost

Name: Shanghai tourist sites remain quiet after end of two-month citywide lockdown
Uploaded: 2022-06-11T00:45:18.000Z
Duration: 1 min 29 s
Description: Shanghai tourist sites remain quiet after end of two-month citywide lockdown

The mainland’s carmakers built 1.86 million vehicles in May, 400,000 shy of pre-pandemic capacity

A wave of so-called revenge spending – consumers splashing out on big-ticket items such as cars after months of lockdown – is likely in July

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A strained supply chain caused China’s car industry to lose another 400,000 vehicles in production last month. Photo: Reuters

Daniel Ren

Published: 8:45am, 11 Jun 2022

A strained supply chain caused China’s car industry to lose another 400,000 vehicles in production last month as carmakers were unable to churn out enough units to cater to market demand.

But they are expecting busier times ahead after Shanghai, dubbed “China’s Motown”, lifted a two-month citywide lockdown as it looks to get the ailing local economy back on track.

The mainland’s automotive companies built a total of 1.86 million vehicles – passenger cars, lorries and commercial vehicles – in May, down 12.6 per cent on the year, according to the China Association of Automobile Manufacturers (CAAM).

The output was nearly 400,000 units shy of the production volume of 2.24 million in March, when capacity was unhindered by lockdown, but a vast improvement on April.

The vehicle manufacturing sector, one of mainland China’s biggest employers, was hit hard by Covid-19 curbs in the past two months. Lockdowns in Shanghai and the northeastern province of Jilin, a major carmaking base, forced key assemblers such as Tesla, SAIC Motor and FAW Group as well as thousands of supply chain vendors to suspend production.

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Shanghai tourist sites remain quiet after end of two-month citywide lockdown

In April, the industry that provides jobs for one in every six of China’s workforce of 800 million people, lost 1 million vehicles in production. Total output by all vehicle builders plunged by 46 per cent to 1.2 million units.