By Greg Gao

The shutdown of the automotive supply chain companies between March and April in Shanghai regions, coupled with logistics disruption, are having a considerable impact on China’s automobile sales, said Cui Dongshu, secretary-general of the China Passenger Car Association (CPCA). He warned of avoiding further disruptions in the supply chain.

In an interview with JW Insights, Cui Dongshu pointed out that the component companies, especially the automotive chip makers, bear the brunt of the COVID-19 pandemic.

In the new energy vehicles market, the current bottlenecks are mainly with batteries and automotive chips. Although Shanghai halted auto production, other regions in China may make up for the capacity loss. However, the impact on auto sales will be even greater, Cui added.

As consumer confidence dropped to a low point, their purchasing power suffered seriously. There was reports that the automobile sales in Shanghai in April was almost zero .

In March, the auto sales in China fell 11.7% to 2.234 million, according to data from the China Automobile Association. CPCA’s statistics show that by the third week of April, China’s auto retail market was still further deteriorating. The overall retail sales of the passenger cars in China were 30,000 units per day, down 46% year-on-year.

As a major auto and parts manufacturing hub, Shanghai has a large number of vehicle companies such as SAIC, Tesla, SAIC Volkswagen, and SAIC-GM. Shanghai’s auto supply chain has become the center of China’s auto industry, with thousands of auto parts companies covering powertrain, auto body, automotive interior parts, batteries, chips, and other fields. Many international top automotive suppliers such as Bosch, ZF, Magna, and Continental Group have established their component support system in Shanghai.