Friday, June 21, 2024
HomeBusinessEconomyCoronavirus impact Chinese automotive market

Coronavirus impact Chinese automotive market

TROY, Michigan –  The outbreak of the novel Coronavirus (2019 nCoV) is having a negative impact on China’s automotive industry and has the potential to disrupt the North American auto industry as well, according to an alert published by LMC Automotive, a leading independent automotive global forecasting and market intelligence company.

In the alert, LMC ‘s base case scenario expects the epidemic to continue into the second quarter of 2020, damaging consumer confidence, delaying purchasing, and impacting China’s consumer economy which accounts for more than half of the country’s GDP. In this scenario, China’s GDP growth rate would drop towards five percent for 2020, with its personal vehicle market falling by 3-5 percent.

“Overall, we expect the 2019 nCoV outbreak to hit Chinese sales and production by 3-5 percent this year, though this is just one of a number of potential scenarios that we have laid out in the alert, and further revisions are certain as more information becomes available in the coming days and weeks,” said Jeff Schuster, president, Americas Operations and Global Vehicle Forecasts, LMC Automotive. “This is a very fluid situation and one that warrants heightened attention as it has the potential to significantly reduce Chinese automotive production in 2020.”

An outbreak of the novel Coronavirus (2019 nCoV) was first detected in China in December 2019 and has since spread to many regions of the world, having recently been declared an International Health Emergency by the World Health Organization. As some areas of China are still in near-complete lockdown, automakers near the city of Wuhan and the surrounding Hubei Province have extended their Chinese New Year’s shutdowns until at least February 13.

Additionally, the local automotive supply chain has been affected, with a number of suppliers delaying their post-holiday production as well.

The J.D. Power automotive forecast for January 2020, Schuster noted: “This year is starting with less trade uncertainty in the auto sector than in 2019 and, while economic growth is expected to hover just under 2 percent, there could be some upside with trade being less of a drag and it being an election year. Affordability remains a major concern for the US auto market as transaction prices have continued to rise and used vehicles are a viable substitute for some consumers, especially entry-level buyers. At the same time, the battery electric (BEV) market is expected to double the number of entries in 2020 from 16 to 33, but BEV volume is expected to grow by only 50,000 units. So, the average per model will fall from 15,200 to 8,750.”

The 2020 outlook for total light-vehicles sales is 16.8 million units, a decline of 1.2 percent from 2019. Retail light-vehicle sales in 2020 are expected to decline by 1.5 percent to 13.5 million units as fleet share of total light vehicles is expected to increase slightly to 19.7 percent from 19.5 percent in 2019.





Please enter your comment!
Please enter your name here


Caribbean News

Global News

Canada launches consultation to expand wireless services via satellites

Supplemental mobile coverage from satellites will improve reliability of telecom services OTTAWA, Canada - Canadians need to be able to count on reliable telecom services...