Chinese new-vehicle dealers are struggling to stay afloat after efforts to clear gasoline-fueled cars before tougher emissions standards taking effect later this year are upended by a bruising price war.
Auto sales — especially of internal combustion engine light vehicles — haven’t bounced back from pandemic restrictions even with hefty discounts done out by major carmakers including BYD Co., Chery Auto, Toyota Motor Corp. and Ford Motor Co. New-vehicle sales fell 20 percent in the first two months of the year, with deliveries of gasoline-fueled cars dropping 30 percent.
With the next phase of China’s emissions standards to be implemented in July, dealers could be left with hundreds of thousands of cars that would become non-compliant, according to a March 23 article by the country’s Auto Dealers Chamber of Commerce, which has since been deleted from its WeChat account. The price war may have brought higher foot traffic, but showrooms that didn’t offer discounts saw sales fall significantly, the article said.
Dealers have faced a challenging time last year, when the COVID lockdown disrupted auto production and sales. At one stage, not a single car was sold in Shanghai for a month. Just 20 percent of dealers operated at a profit last year, and more than 2,000 closed, according to the Chamber of Commerce.
The chamber, which counted over 8,000 dealers as members as of 2019, according to its website, didn’t respond to emailed requests for comment on why the article was deleted. Calls to its head office went unanswered.