China's vehicle sales likely fell by almost a fifth in January, marking a 19th consecutive month of decline, hurt by Lunar New Year holidays that started before last year and by the coronavirus outbreak.
The epidemic will hit auto sales and production hard within the short term, the China Association of Automobile Manufacturers said, predicting competition within the industry would get fiercer and a few smaller parts suppliers could collapse.
Preliminary data for January shows vehicle sales tumbled 18 per cent while sales of battery electric and other so-called new energy vehicles plunged 54.4 per cent, down for a seventh month during a row, the association said.
It didn't give absolute figures.
Although the sooner start to the vacations , when consumers don't do much shopping, was the most factor behind the dismal numbers, local governments began imposing travel curbs and warning residents to avoid public spaces within the last fortnight of January.
An extension of the vacations to counter the virus also discouraged dealers from ordering cars at the top of the month as is their usual practice.
"Due to the extension of the vacations , the shortage of workers and auto parts, we predict that the assembly of quite a million vehicles are going to be impacted by the coronavirus epidemic," Chen Shihua, a senior association official said.
The association said last month sales are likely to shrink 2 per cent in 2020, a 3rd straight year of contraction.
In Hubei province where the outbreak began and a serious car manufacturing hub liable for nearly 9 per cent of China's output, Dongfeng Motor Group Co Ltd and its partners Honda Motor Co Ltd, Renault SA and Peugeot SA have all said they're delaying the restart of production.
Tesla Inc, which started delivering cars built at its $2 billion plant in Shanghai last month, restarted production in Shanghai on Monday with government help.
Those operating plants outside Hubei province like Volkswagen AG and General Motors Co have said they're going to keep some factories idled for an additional one or more weeks.
Industry sales fell 8.2 per cent last year, pressured by new emission standards during a shrinking economy and by trade tension with the us .