Preliminary buying data, combined with anecdotes from car companies and analysts, suggests Chinese people have been driving off sales lots in record numbers as they scramble to avoid public buses and subways for fear of infection, Reuters reported.
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“SARS has changed people’s consumption thinking. They think private cars are safer and more reliable,” Su Hui, general manager of Beijing Asian Games Village Auto Market, told the news agency, which noted that the market, one of the biggest in the Chinese capital, sold more than 4,300 cars in April, a rise of nearly 25% over a year earlier.
“Many people brought forward their purchase plans and those who did not plan to buy a car changed their minds,” Su reportedly said.
Reuters, citing state media, said that, in April, when China admitted it had covered up the extent of the epidemic that has now infected more than 5,000 people and killed more than 260, car sales in Beijing rose 21% to 34,000.
Reuters noted that Shanghai Automotive Industry Corp said April nationwide sales jumped 33% year on year to 46,800. Guangzhou Honda Automotive Co said it sold 17,250 cars, more than double a year ago.
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By GlobalDataThe strength has surprised and delighted those who had braced for a downturn, Reuters said, adding that it could help bolster industrial production, which is being watched by analysts for signs that SARS is hitting the factories stoking the fires of China’s roaring economy. Industrial output climbed 16.9% year on year in March thanks to fast-growing sectors like cars and mobile phones.
But the sudden sales surge could be a “danger ahead” sign for the car industry, analysts warned Reuters.
“A lot of potential buyers have already spent money on car sales. That might eat a lot of the potential market for the next few months,” Automotive Resources Asia analyst Ted Wan told the news agency.
If SARS isn’t controlled soon, jittery Chinese may opt to save more instead of buying big-ticket items, analysts told Reuters, adding that a drawn-out epidemic could also throw sand in the gears of plans to raise car output and roll out new models.
“The problem is that if SARS lasts a few months, the overseas technical people will not be able to visit China to facilitate the technical upgrades,” Wan reportedly said, highlighting the fact that many Chinese car makers are joint ventures with foreign firms.
“We may see in the next few months that China’s car-making capabilities will stay at current levels, not expand as promised early this year.”
Reuters’ report was backed up by The Car Connection (TCC) website which cited Ford COO Nick Scheele as saying: “People who were on the edge of being able to buy a car now are (racing into showrooms) because they don’t want to use mass transit.” TCC said Scheele observed that Ford’s China operations, based well to the north, have felt relatively little negative impact from SARS, unlike those along the southern coast, where the epidemic has been most serious, and many manufacturing operations have been closed or slowed.
Ford did have to shut its small Beijing headquarters for about two weeks while the offices were disinfected but Scheele told TCC that employees were able to continue working from home.
