It is an important sector for the health of the Chinese industry, and it is performing poorly. With more than a million cars sold in April, sales fell 35.7 percent year-on-year and 34 percent year-on-year, the China Passenger Car Association said on Tuesday (January 10). In question, the proliferation of restrictions and blockades since the advent of the Omigron variant in China, the last country in the world to maintain a zero Govt strategy.
The country’s economic capital, Shanghai, begins its seventh week of harsh imprisonment, preventing consumers from buying cars and disrupting automobile production. The metropolis is one of the main manufacturing hubs for the industry – located at the Tesla, General Motors and Volkswagen factories – but also for the entire industry and supplier components.
Officials are doing everything to support a resumption of production: one-third of the 666 strategic companies approved to resume work on April 19 belong to the automotive industry. However, this is not enough to solve many of the problems, while most of the 25 million people of economic capital are still confined to their homes.
Logistics is a big challenge
The Tesla Gigafactory is one of the municipality’s priorities for its economic and index weight. About 8,000 employees, half of the regular staff, are sleeping on the site, which allowed the plant to operate at 40% of its capacity by the end of April. However, the site had to significantly reduce production rates, and due to the lack of electronic components one of its suppliers had to stop production after the Kovit-19 eruption on its premises. As a result, the company was able to produce only 10,757 vehicles in April, of which only 1,512 vehicles were exported, with no exports. By March, the plant had shipped 65,814 vehicles, more than half of which had been exported to Asia and Europe, Bloomberg said.
Announced 2022 in good sponsorship for the world’s leading automotive market. Falling from 2017, sales returned to growth in 2021 (+ 3.8%, 26.28 million units sold). The Automobile Manufacturers Association hopes that this trend will be confirmed this year (+ 5.4% expected). A goal now seems to be compromised. “Between March and May, between 650,000 and 700,000 fewer vehicles will be produced due to the lockdown. Says John Zheng, Chinese director of the Shanghai-based consulting firm LMC Automotive.. At the beginning of the year, we already estimated that the Russian-Ukrainian war and the absence of semiconductors would cost China 1 million vehicles. There, there will be less than 1.6 million to 1.7 million vehicles. As a result, the growth of the automotive market will not be 5% as we expected, but will be almost zero. ⁇ Again, the expert continues, “It assumes Shanghai controls the epidemic before June and that the government will take stimulus measures in the second half of this year: some cities, such as Shenzhen, have already announced subsidies to buy cars.”
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