Energy

China’s Car Market likely to improve because of Electric Vehicles

According to global carmakers, there are high chances of electric vehicles helping China’s car market. This world’s largest car market has had low moments for about two years. Although the downturn happened before the coronavirus, the pandemic made things change from bad to worse.

Global automakers are looking forward to its rebound within no time. As a matter of fact, Chinas annual motor show is now officially open in Beijing. It was supposed to occur in April, but it happens five years later because of delays emanating from the pandemic. Ever since the outbreak of COVID-19, this is the very first big international industry event that has taken place so far.

The fact that China has managed to deal with the pandemic squarely, making it almost if not Covid-19 free, is one reason why the country is at an advantage. It means that its citizens can move freely, which translates to more car sales.

It was evident that coronavirus is no longer one of the fears in China.  For instance, there was a huge number of journalists. Venue rules were not taken seriously during the event to the extent that most of them even removed their masks. In fact, the head of China’s BMW, Jochen Goller, said that the confidence is back.

Some of the greatest beneficiaries are Mercedes-Benz, Audi, and BMW. That’s because most of the young rich Chinese have been upgrading to high-end models a lot lately. Despite BMW sales dropping by 31% in the first quarter, things are about to change. That’s according to Goller, who predicts that there will be an increase of at least one digit.

Another improving sector is electric vehicles. There has been a downturn lasting for a year in China as far as electric vehicles and hybrids are concerned. It came about due to a lack of enticing subsidies. Even before things could get better, coronavirus emerged, which worsened the situation. Fortunately, that has been changing since July, supported by the China Passenger Car Association’s finding that the sales have increased by 45%.

Nissan’s CEO Makoto Ucvhida termed the recovery as remarkable despite low markets because of the pandemic. The company is hopeful and promises to release Ariya electric sports utility vehicles and eight other electric and hybrid vehicles by 2025.

The main gainers are the SUVs and premium cars. With the new emission standards, which are quite strict, the electric vehicles could soon join the club. Its percentage is only 5% of the total car sales, but that might change very soon. Other factors attributing to the rebound are buyer subsidies as well as easy access to credit. The sales have been rising since April, and global carmakers believe that things will only get better.

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