With Half of China Locked Up, Car Sales Plunge 92%

Mish

Car sales in China for the first two weeks in February are down 92% from a year ago.

When you are locked in your home for weeks, with no income, and people are dying in the streets, guess what happens to retail sales.

Bloomberg reports China Car Sales Tumble 92% in First Half of February on Virus

China car sales plunged 92% during the first two weeks of February in the wake of the coronavirus outbreak, according to the China Passenger Car Association. It was even worse in the first week, with nationwide sales tumbling 96% to a daily average of only 811 units, PCA said in a report released earlier this week. Deliveries this month may slump by about 70%, resulting in a 40% drop in the first two months of 2020, it said. The figures exclude minivans. The situation is expected to improve in the third week of February compared with the start of the month, PCA Secretary General Cui Dongshu said in an interview on Friday.

Improvement Expected

To what?

From here, down 50% or even 90% is an "improvement"

People have had no income for weeks.

I highly doubt buying cars is on their minds.

Economically Speaking

From an economic standpoint, January saw the Largest Shipping Decline Since 2009 and That's Before Coronavirus impact hit.

Supply chain disruptions have barely started.

It is impossible to estimate the full impact as long as cases are spreading. Worse yet, cases are exponentially rising outside of China.

With that in mind, there's Little Chance of Coronavirus Containment in South Korea where cases are rising exponentially.

Talk of car sales "improvement" seems more than a bit ridiculous.

Mike "Mish" Shedlock

Comments (23)
TimeToTest
TimeToTest

It seems very difficult to produce something that is an exchange for productivity(money) when no production is taking place.

At that point you are just a digital paper factory.

There are interesting times ahead.

No. 1-16
Sechel
Sechel

China's car market has been weak for several years now. Demand is weak because consumers have less money. Every attempt at Stimulus has boosted GDP while resulting in less consumer demand for one obvious reasons the wealth has been transferred from the consumer and not toward it. Consumers have been forced to subsidize China's directed investment. Coronavirus is just the latest problem.

The Coronavirus problem will be solved at some point and hopefully soon, the problem with Chinese retail demand will not unless China rebalances its economy and redirects wealth toward the consumer and not away from it. Every time China tries to stimulate its economy Consumption as a percentage of GDP seems to decline. Nothing to do with Corona virus since this problem predates it.

crazyworld
crazyworld

I have already pointed out that Covid-19 virus is very very dangerous because of the non symptomatic bearers.
Let us hope that people having recovered have been able to create some specific immunity against the virus.
I just read that a patient which had recovered tested positive again during his quarantine (14 days) imposed when he returned home.

Casual_Observer
Casual_Observer

Sounds like you've been missing a lot of work lately.

Well not really Bob. I wouldnt say I've been missing it.

njbr
njbr

"Community spread" happening in multiple countries--best time for "pandemic" announcement Friday pm or Saturday. Are you feeling solid about holding stocks over the weekend?

moyerdere2
moyerdere2

at least it isn't as bad as the flu

ksdude69
ksdude69

So are their landlords showing up in a trashbag and kicking them out? Imagine the mastercard lawsuits and evictions they'd try pulling in the US. All electronically filed,of course, so they dont have to get out in the public. LOL.

Bam_Man
Bam_Man

Greta (and her handlers) must be thrilled.

KidHorn
KidHorn

Didn't you know the virus was just going to be a temporary blip on the world economy? Commons sense would dictate that not producing anything would be a drag on GDP, but the experts, who understand everything way better than we simple folks, say it isn't so.

Art Izagud
Art Izagud

Don't worry, this won't effect boomers, as the printing presses are ready to save pensions and asset prices. Put it on the kids tab. Boomers shouldn't ever have to adjust their lifestyle, just price the kids out of homes and tell them about the blessings of free trade and markets. As for UBI, well that's just for lazy people who dont want to work for a living competing with slave wages overseas. Bring on the Boomer QE.

Tony Bennett
Tony Bennett

Tis but a flesh wound.

Get ready for a slew of bad economic numbers. Not just in China but elsewhere (even if virus mostly contained to Asia) as economy has become global.

awc13
awc13

all that pent up demand! ;)

shamrock
shamrock

As the number of cases approaches 100,000 I'll keep in mind that means out of 10,000 people in China, 9,999 of them do not have the coronavirus.

thimk
thimk

Long hot summer 2020 in the cards ? China makes 80 % of the worlds HVAC/AC units.

Corto
Corto

We make electronics hardware, with lots of parts originating in China and we have had lead times for a number of critical parts already push out multiple weeks. A friend at another local tech company will run out of product in two months. And we are small. Cannot imagine what is happening to carmakers and phone makers.

But don't worry, nothing to see here.

SMF
SMF

Did globalization just mean 'Made in China'? Smart people, actually smart people, would realize that having only one supplier is just asking for trouble.

After this is over, whenever that is, I can see supply lines being reshuffled all over the world.


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