China auto show to provide much-needed boost for industry slowly recovering from coronavirus pandemic
- Auto China could not have come at a better time for the industry that is seeing a gradual recovery, observers say
- Although the biennial show has been delayed by months because of Covid-19, it is the only major international industry event to proceed this year
The biennial event, originally expected to be held in April, was postponed because of the Covid-19 pandemic. The Chinese government’s go-ahead for the show is a sign of confidence that Beijing has successfully contained the pandemic and is determined to rejuvenate the car market and economy that had been badly hurt by the coronavirus. The 10-day event ends on October 5.
“The timing of the Beijing auto show could not have been any better,” said Chen Jinzhu, chief executive of Shanghai Mingliang Auto Service, which deals in used vehicles and car insurance. “The grand show may help the market regain its momentum after months of disappointing sales.”
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China’s 8.3 trillion yuan (US$1.2 trillion) car industry and its supply chain play an important role in the economy. It employs 33.5 million workers or one in every 12 jobs in the country, according to the Sina news portal. China’s growing middle class fuelled a surge in car sales from the late 1990s to 2017, before the market took a dive in 2018 as consumers reined in big-ticket spending amid worries over the economy and job security.
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The deadly coronavirus outbreak this year has dealt a blow to the country’s car market as extensive lockdown measures disrupted manufacturing and slowed sales. In January, sales fell 18 per cent year on year, followed by a 79 per cent plunge the next month.
Despite rising passenger car sales for four straight months since May, overall sales in the mainland for the first eight months of the year are still 15.2 per cent lower than a year earlier. Fitch Ratings expects sales to fall 10 per cent on the mainland this year.
In the NEV segment, Chinese carmakers are expected to showcase dozens of models, of which 30 in the low-priced NEV segment have been included in the government’s initiative to increase ownership in rural areas.
“The central government needs to boost sales of vehicles to spur economic growth,” said Luo Lei, deputy secretary general of the China Automobile Dealers Association. “Farmers are price-sensitive and carmakers need to churn out affordable products [to cater to their demand].”
