In pics: Why China's auto industry is revving up stronger than others
There are several reasons why China's auto industry is possibly looking at a much stronger recovery when compared to other markets.
The Chinese auto market is not only recovering from Covid-19 pandemic but is reportedly at the cusp of performing even better than what it had in 2018 and 2019. May 2020 sales figures rose 14.5% from the same month in 2019. This after sales rose by 4.4% in April. (All photos are file images and used for representational purposes)
Despite reporting the first Covid-positive case, the infection numbers have reportedly declined gradually in China. Factories and assembly plants started resuming productions in the country when other countries had not even contemplated lockdowns that would eventually bring life to a standstill.
Auto demand rebound in China is reportedly attributed to easier finance options available such as a five-year package that requires customers to pay only around 4,000 or 5,000 yuan a month. Some Chinese cities have also rolled out cash incentives for people who exchange their old vehicles for newer ones.
Another reason for quicker auto sales rebound in China could be the fear psychosis caused by Covid-19 that pushes more and more people to take up personal mobility.
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The Chinese government is reportedly attaching a lot of importance to the recovery of the automotive sector, especially in terms of incentives on offer for electric vehicles. The country extended the scheme of rebates on EVs that was previously supposed to end in 2020. (File photo of XPeng's P7 sedan)
While a recovery in the auto sector is expected in countries outside of China as well, the turnaround could be quicker in China. The pace for other countries may vary and is likely to be far more gradual.
First Published Date: 11 Jun 2020, 05:15 PM IST
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