Sales predictably slide in Q1, but set to rebound soon

March rallies after February's losses

Car sales in China are rebounding and are expected to return to normal in the second half of the year, said the China Association of Automobile Manufacturers on Friday.

But it added the sector is almost certain to see an overall fall for the entire year.

A total of 1.43 million vehicles were sold in March, down 43.3 percent from the same month last year, but 4.5 times more than in February when the coronavirus outbreak shut down car showrooms across the country, the association said.

Statistics show that car sales in the first quarter totaled 3.67 million, down 42.4 percent year-on-year.

"The pandemic is not over yet, but we have obviously seen better sales in March than in February," said Chen Shihua, deputy secretary-general of the association.

Production is turning for the better as well, standing at around 75 percent of the level from March of last year, according to a survey by the association of 23 major car groups in the country.

"We didn't expect them to resume production so fast," Chen said. "As the government releases some favorable policies to stimulate sales, the market will see even faster recovery."

About 20 cities in China began offering subsidies on new vehicles during the past two months and the central government is calling on some metropolises to release limits on license plates.

The association said the sector will return to last year's level in the second half of the year, but it will be exceedingly difficult to recoup losses in the first half.

It expects the sector to see negative growth for 2020.

Xu Haidong, vice-chief engineer at the association, said many people's incomes have been affected by the coronavirus outbreak.

He said at least 100,000 companies filed for bankruptcy from February to mid-March, quoting figures from Tianyancha, a Chinese corporate information provider.

Xu said authorities in big cities should relax limits on license plates to unleash the potential of the market because people there have the purchase power.

Most carmakers in the Chinese market have seen some sign of recovery.

Great Wall Motors, the country's largest SUV maker, sold 60,048 vehicles in March, almost six times its tallies for February.

The company's sales surpassed 150,000 in the first three months of this year.

Its Haval H6 SUV saw its March sales more than triple from February to 20,319. The model has been the most popular SUV in the country for 82 months, with its accumulated sales exceeding 3 million by the end of 2019.

China's new energy vehicle giant BYD delivered 30,599 vehicles in March, around two-thirds the totals of the same month last year, but more than six times the figure last month.

In the premium segment, Mercedes-Benz sold 138,960 cars from January to March on the Chinese mainland, which is 20.3 percent less from the previous year. But demand is rebounding.

Britta Seeger, a Daimler board member responsible for sales and marketing, said "In China and South Korea, our dealerships are fully open and we see a significant increase in demand there. That gives us confidence."

Beijing Mercedes-Benz Sales Service Co said it will launch 18 models this year in China, its largest market worldwide.

BMW Group saw its first-quarter sales in China decline 30.9 percent to 116,452 vehicles. But the German premium carmaker said a rebound starting last month points to a sustainable recovery in the market.

"The Chinese government's preventive and containing measures against the outbreak have delivered substantial results," said Jochen Goller, president and CEO of BMW Group Region China.

"Therefore, since the end of March we are entering into the second phase, known as 'the road to recovery'."

Goller said around 95 percent of the company's dealerships were open for business again as of April 6. Showroom traffic is growing and plants in Shenyang, Liaoning province, have resumed two shift productions as demand is forecast to gradually recover in the next months.

BMW said it is confident in the Chinese market's potential and will further advance its investment in the country.

The battery-electric iX3, which will be made in China and sold globally, will go into production in the fourth quarter, the automaker said.