China PV retail sales forecasted to show smaller drop in March

Shanghai (Gasgoo)- China's retail sales of locally-produced PVs (referring to cars, SUVs and MPVs) are forecasted to reach 1.03 million units in Mar., plunging 41% year on year, while better than that of a month ago, according to the China Passenger Car Association (CPCA).

Thanks to the effective containment over the coronavirus epidemic, the auto market is gradually getting improved. However, the sales will in all likelihood remain low in March, and are expected to take a favorable turn until April or May, said the CPCA.

For the first two months of 2020, the China-made PV deliveries hit a record low of 1.97 million units (-41%), according to the association. As the whole country threw itself into the battle against the coronavirus, the PV retail sales in Feb. plummeted 80% to roughly 250,000 units, even fewer than the weekly volume for the year-ago period.

Although some positive signs have emerged with the improved epidemic prevention and control, a prudent attitude towards the market recovery is still required now.

Automakers plan out their marketing strategies with greater caution. According to a survey of dealers made by the CPCA, OEMs lowered Mar. wholesale targets by around 38% from the previous year.

In the first week of March, there were around 127,000 consumers in China taking delivery of homegrown PVs, a year-on-year decrease of 54%. Based on the growth trend in prior-year period and the dealers' work resumption situation, the respective volume for the second to fourth weeks is projected to be 166,000 units (-43%), 187,000 units (-38%) and 550,000 units (-30%), said the CPCA.

The PV outputs in March's first week tumbled 78%, 24% percentage points higher than that of deliveries. It may portend that dealers will be saddled with huge pressure in supplementing inventories.

The formulation of governmental incentives is underway, while the practical implementation may virtually come in the second quarter. Besides, it is more difficult to fully recover consumers' car-shopping confidence by Mar. Thus, the CPCA estimated that the first-quarter PV retail sales will stand at around 2.99 million units, versus 5.09 million vehicles handed over a year ago.