Last week, data out for January showed auto sales in China plunged a dastardly 22% last month.
It was the largest ever decline for January, and served as a dramatic reminder that China’s auto market — the largest in the world — is mired in a historic slump. Sales have fallen in 19 of the last 20 months.
As indicated at the time by the China Passenger Car Association, you could go ahead and pencil in another horrific month in February given that dealers and factories have been shuttered as part of a country-wide effort to contain the coronavirus.
Well, on Friday, PCA Secretary General Cui Dongshu said that for the first two weeks of this month, car sales in China fell 92%.
There’s little utility in charting that figure – as Cui wrote, in a report, “there was barely anybody at car dealers”. Only 811 units per day (on average) were sold during the first week of February, when sales dropped an astounding 96%.
And yet, we’ll go ahead and put the visual together for you, because nobody can resist rubbernecking a car crash (pun fully intended in this case). Here it is:
Major manufacturers have flagged operational difficulties amid efforts to stop the spread of the epidemic and the PCA said earlier this month that sales will likely fall 30% for February.
That projection may prove to be optimistic. Things were looking a bit better during week two, when daily sales were down “just” 89% on year, and further improvement is expected, but this situation is unequivocally bad – it would be comical were it not for the tragic human toll of the virus.
2020 was already set to mark the third straight annual drop for auto sales in China. The epidemic would appear to make that rather unfortunate prospect a foregone conclusion.
Also on Friday, the Chinese Ministry of Commerce said January-February trade slowed sharply.
Exports and imports were hit by delays, work stoppages and regional lockdowns, in addition to the holiday, Li Xingqian, an official with the ministry, said at a briefing.
The damage will be large, but “bearable”, Li remarked.
I’m a little bit confused. Is the entire country in lockdown or just parts? How is production and distribution of food other necessities happening? Will they eventually reach the point where they say the heck with this lets treat it like the flu, let everyone out and focus care on people who fall seriously ill? I mean how can a country stay in lockdown for months?
I think the answer there gets very complicated depending on exactly how contagious and dangerous this thing actually is. I mean you are right the reaction and the data are not matching up. Some estimates have it that a proper exponential model could indicate 1million infected and with indications reinfection is not only possible but more deadly… well they may be willing to let entire cities burn and let the economy grind to a standstill for a few months in hopes they can starve the virus of new hosts. The alternative would be this thing hits the globe and again if it’s say a RO if 6-7 and 2% fatality rate… Well that’s a 6000% flu impact potentially maybe even worse as most people have some natural decaying flu immunity from getting the flu but will have no immunity to Cov19. Even worse if it establishes itself we could see it return annually. That is very hard to put a confidence level on… but biologically speaking that’s not even a nightmare virus, that’s just an economic nightmare. I’m not saying this is the truth but if I was running China I would be scared if it were. Scared enough to quarantine everyone.
Lots of talk on CNBC comparing likely economic impact of Covid-19 to SARS in 2002. Very little mention of the fact that China, in 2020, represents a much larger share of a much more integrated global economy.
It’s hard to imagine it being comparable to SARS when all the data we do have says it’s worse and we likely have less data than exists presently.