The new car market in China fell nearly 12% to 2,234,000 units in March 2022 from 2,526,000 in the same month last year, according to the China Automobile Wholesalers Association (CAAM).
After growing 7.5% in the first two months of the year, car sales in China have suffered from severe closures in key cities across the country as the government continued its zero-tolerance policy towards Covid.
The country’s largest city, Shanghai, is in its third week of blockade, severely affecting production at key automotive plants owned by SAIC Motor, its joint venture with Volkswagen and GM, and Gigafactory Tesla.
Many component suppliers have also been forced to shut down, which has added to the current problems caused by the global shortage of semiconductors.
It came after the same strict closures in Shenzhen and Changchun in March and in Tianjin earlier in the year. It now appears that a major manufacturing center in Guangzhou in the south is also expecting similar treatment.
In the first quarter of the year, car sales were slightly higher – 6,509,000 units compared to 6,484,000 units in the same period last year, with the volume of passenger cars increased by 9% to 5,545,000 units, while trucks vehicles fell 32% to 965,000.
Sales of new energy vehicles (NEVs), mainly electric and hybrid vehicles, continued to boost overall sales in the first quarter, with sales up 139% to 1,257,000 units, including one million battery-powered vehicles.
The impact of the blockade is expected to be more severe in April, given significant disruptions in car production in Shanghai and possibly also in Guangzhou, and may well come by May, when supply chains are struggling to recover.
The shutdown is expected to have a significant impact on GDP growth in the second quarter.
Earlier this year, CAAM said it expects the car market to grow more than 5% to 27.5 million units in 2022 after growing 3.8% to 26.3 million units in 2021.
The country’s largest car group, SAIC engine, in March, world sales fell by almost 10% to 443,845 units, but still rose by almost 7% to 1,220,563 units in the first quarter. During this period, sales abroad increased by 45% to 171,875 units.
Despite weak sales last month, SAIC-Volkswagen reported an increase in first-quarter sales of 33% to 331,229 units, while SAIC-GM-Wuling deliveries increased 6% to 326,057 units. SAIC-GM still severely affected by the global semiconductor shortage, its sales in three months fell by more than 18% to 274,536 units.
SAIC Motor passenger car sales increased 34% to 194,183 units in the first quarter while its relative ownership SAIC-Maxus Sales of the subsidiary increased by almost 12% to 51,267 units.
SAIC said last month that it was newly established SAIC-Audi The joint venture aims to sell 50,000 cars in China in its first year of operation, in 2022. The company will have three major models available in this market this year: the A7L, Q5 e-tron EV and a full-size SUV with a network of 120 outlets are expected to appear by the end of the year.
Last month, Volkswagen said it is looking to at least double EV sales in China this year from 93,000 units in 2021.
GAC Group reported a 22% increase in sales in the first quarter to 608,167 units, including a 23% increase in sales to 247,006 units. GAC Toyota joint venture.
Geely car In March, 101,166 vehicles were sold worldwide, including 7,788 export vehicles, while 326,024 units were sold during the year.