In a normal year, China would have sold more than 6 million new cars by now. This year, the number is closer to 3.7 million, and now the government is handing out cash to help the world’s biggest auto market get back on its feet after the coronavirus pandemic.
Car sales declined 42% in the first quarter of 2020 compared to last year, according to data released late last week by the China Association of Automobile Manufacturers.
While that is largely because of a whopping 79% plunge in February — when the country of 1.4 billion people recorded just 310,000 sales — the market remains very weak. Only 1.43 million vehicles were sold in China last month, a 43% decline over March 2019.
Crucial economic role: More than 40 million people in China rely on the auto sector for jobs, either directly or indirectly. And the more than $1 trillion in revenue the industry generates each year contributes to nearly 10% of China’s manufacturing sector.
A healthy Chinese car market is also important to the rest of the world. Global automakers like Volkswagen and General Motors sell millions of cars in China — each of those companies, for example, depend on the country for roughly 40% of their total sales.