1:52 pm, April 9, 2020
Recovery of the Chinese car industry has been rapid as Wuhan car dealerships open for business once again.
In a positive piece of news for the UK car industry, Bloomberg is today reporting that the strength of pent up demand has taken ‘some car dealers by surprise’.
One Audi dealer reported he was ‘shocked’ by the number of purchases since the reopening and described it as a ‘boom after a two-month dormancy’.
Bloomberg reports that across China – currently the world’s biggest car market – car sales have been picking up since February from next to nothing.
Volkswagen has today said it is seeing ‘clear signs of business recovery’ in China too. In a press statement issued this afternoon, VW said all dealerships were reporting ‘strong customer interest’.
Volkswagen Group China CEO Stephan Wöllenstein said:
‘Our dealerships are seeing customers on the showroom floors once again. There are growing signs of recovery, with a good chance that the Chinese car market could reach last year’s level in early summer.
‘For Volkswagen, many highlights are still to come in 2020. This year, MEB production will begin and the Volkswagen ID. family will debut in China.’
Some automotive professionals in China believe that customers are more motivated to buy a new car as they deem personal transport safer than public. Audi told Bloomberg that in particular many families were buying second cars.
Other dealers are reporting similar levels of interest with buyers returning to pre-lockdown levels. Some showrooms are seeing a pick up in first time buyers as well, with health care professionals and doctors among those now buying.
Steve Fowler, editor-in-chief of Auto Express told Car Dealer Magazine this could happen in the UK too.
‘The pent-up demand for cars could well see a Le Mans-style sprinting start as customers rush to buy when restrictions are lifted,’ he said.
‘We know that there’s still plenty of interest with people looking for information on new cars, while those whose lease deals have finished in the past few weeks will be back into showrooms. Manufacturers who go quiet during this time risk being forgotten when buyers return – as they inevitably will.’
The report says that anecdotal evidence from Wuhan shows that while consumers may be cautious about the return to normal life they are still willing to make big purchases.
Jim Holder, editorial director of What Car? and Autocar magazines added: ‘The evidence from China does not surprise me. A poll of almost 3,000 visitors to whatcar.com this week revealed that more than 18 per cent are planning to buy the moment the coronavirus restrictions lift.
‘Handling that pipeline is going to need careful work – not just at that moment, but now. New car buyers could easily slip into stock, nearly new or used purchases if importers aren’t on the ball.’
Car sales dropped by 96 per cent in the country during the crisis – and it’s likely we will see the same in the UK – but in the first three weeks of March the decline moderated with the China Passenger Car Association reporting March down 40 per cent overall.
As of April 3, almost all of China’s dealers were back in business and the government has announced a set of stimulus measures to spark car sales into life. The Wuhan lock down was put in place on January 23. It took 14 weeks for restrictions in the district, where the first coronavirus cases were first discovered, to be lifted.
BMW believes the trends seen in China also point towards a ‘sustainable recovery’ as it experiences a ‘strong order take’ there too.
Watch today’s Car Dealer Live broadcast below to hear about what demand there is out there in the UK today, according to experts TLA.
