China Dealers Ask: Where Are the Customers?
About 94% of China’s new-car dealers are open again. Now all they need is someone to sell to.
The China Automobile Dealers Assn. reports that all but 6% of franchised dealers have reopened as the impact of the coronavirus pandemic eases. But the trade group says unit sales were only half their normal level through the first two weeks of March.
The virus outbreak began in Wuhan in December. By the end of January, China was responding with travel bans and draconian quarantine measures. Over the following three weeks, China’s new-car sales evaporated.
Retail car sales in China skidded 19% in January as the health threat became apparent. Then they plummeted 80% in February as infections soared. But it will take many weeks more for threat of new outbreaks to fade.
In the meantime, China’s car market isn’t recovering equally, according to CADA. Its survey finds that Chinese brands are attracting only about one-third their normal showroom traffic this month. Sellers of mass-market foreign brand models say their visitations are 54% of the norm. Luxury foreign brands are drawing nearly 60% of traditional traffic.
Assuming CADA’s report is accurate, regaining half of normal showroom traffic a month later—and with more than 81,000 COVID-19 cases reported in China—gives Europe and the U.S. their first inkling of what they might expect too.
Can western car markets bounce back as quickly as China seems to be doing? Maybe. But first they must stop the rapid growth in infections.
Neither region has responded with as forceful or coordinated a response as China was able to impose. Epidemiologists say the ability of a healthcare system to cope with a pandemic relates directly to the speed and effectiveness of the response.
As of today, Europe has nearly 196,000 confirmed COVID-19 cases, already more than twice as many as reported in China. The U.S. has confirmed just under 44,000 cases, but the number is climbing sharply day by day.
President Donald Trump said today he would love to see the crisis in the U.S. abate enough to allow shops and factories to reopen three weeks from now. Who wouldn’t?
The trick will be to tame the pandemic in the meantime. We’ll know how we’re doing on that front over the next 10 days or so.
The common wisdom seems to be that midsize cars have pretty much had it in the U.S. new car market.
Outside of a pickup truck, there is no vehicle that’s sold in greater units than the Toyota RAV4. So when they developed the new generation, they had a whole lot to consider.
Last year Buick sold 219,231 vehicles in the U.S.