Market contraction continues in early May

SHANGHAI  The steep downturn in the Chinese light-vehicle market continued in the first half of May after April’s slump, with carmakers struggling to restart production and resume shipments amid a new wave of coronavirus outbreaks.

During the 15-day period, retail sales of new light vehicles such as sedans, crossovers, SUVs, multi-purpose vehicles and minibuses fell 21 percent year over year to around 484,000, the China Automobile Dealers Association said Thursday.

In the same period, light-vehicle shipments from automakers industrywide slumped 24 percent to about 458,000.

The main reason behind the market contraction is an extended lockdown across Shanghai  the most important auto production center in China, as well as transport restrictions imposed by the city’s neighboring provinces, according to CADA.

Complying with Beijing’s zero-COVID policy, residents and businesses in Shanghai, the epicenter of the current wave of coronavirus outbreaks in China, are now in the eighth week of lockdown and travel restrictions.

Despite efforts to restart production, Tesla Inc.’s Shanghai assembly plant was operating at 45 percent of capacity as of May 16, according to information the Shanghai city government disclosed at a press conference this week.

The government didn’t disclose information on the status of output at Shanghai-based factories Volkswagen Group and General Motors operate with local partner SAIC Motor Corp.

Separately, retail car sales in China jumped 27 percent in the first half of May from the same period a month earlier in an early sign of recovery for the world’s largest auto market, data showed.

April was the worst month for China’s auto market since early 2020 as the country shuttered factories to combat fresh cases, hurting logistics and sapping demand. In the past few weeks, major cities have begun to slowly lift curbs.

While down 21 percent from a year earlier, retail sales of passenger cars in the first 15 days of May rose to 484,000 units, data from the China Passenger Car Association showed on Thursday.

Sales during the period May 9 to 15 rose 26 percet from the same period in April to 230,000 units, CPCA said.

Reuters contributed to this report.

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