Embattled Chinese carmakers reported recovery in sales in May, but not out of Covid-19 woods yet

China’s embattled automobiles sector saw a ray of hope in May, as key carmakers wooed customers and improved sales by offering discounts.

Geely Automobile Holdings reported strong sales last month. It said on the weekend that its sales jumped 20 per cent from a year ago to 108,822 units. Lynk, its premium car brand, saw sales jump 27 per cent to 12,950 units.

Moreover, preliminary figures by the China Association of Automobile Manufacturers showed that total vehicle sales in the first five months of this year climbed 11.7 per cent to 2.14 million units, the sector’s first positive year-on-year growth since July 2018.

But it remains to be seen whether the upwards trend can be sustained amid the economic fallout from the Covid-19 pandemic. Mainland Chinese carmakers and auto dealers were among the companies hardest hit by the outbreak in the first quarter of this year, amid lockdown measures and policies aimed at restricting business activities.

“The lower prices turned out to be attractive to consumers, since many of them had plans to buy a car before the outbreak of the coronavirus,” said Tian Maowei, sales manager at Yiyou Auto Service in Shanghai. “But it seems to be only a rebound buoyed by the release of pent-up demand, rather than a turnaround.”