NEV grants help boost car sales in Covid-hit Guangzhou over Labor Day long weekend

(Yicai Global) May 6 – A sudden outbreak of Covid-19 in China’s economic hub of Guangzhou during the five-day Labor Day holiday that recently ended a slump in car sales, but fuel-powered vehicles new ones always sell well thanks to local government subsidies.

“We normally sell about 100 cars, or at least 80, during the Labor Day long weekend,” the general manager of a dealership in Guangzhou’s Baiyun district told Yicai Global. But sales have been pretty bleak this year, he said.

There has been less traffic in the store as people are staying at home, the manager said. The pandemic is also making people more cautious about the future and less likely to buy big-ticket items like a new car.

Before Covid, the dealership had annual sales of around 2,500 vehicles. In a good year, she even achieved sales of nearly 3,000 automobiles. Last year, despite the global chip shortage, it was still able to deliver 2,000 vehicles and broke even.

But this year the store was forced to close for two weeks in April amid a new outbreak and is losing money. “Things should remain difficult in the second half. We could see our first annual loss in over a decade,” he said.

NEV sales, however, did well over the long weekend, thanks to local government subsidies. The southern province of Guangdong is offering electric car buyers a subsidy of 10,000 CNY (1,500 USD) per vehicle if they give up their fossil fuel car.

GAC’s electric car brand Aion received more than 5,500 orders, an 87 percent jump from the same period last year, Deputy General Manager Xiao Yong told Yicai Global. This is mainly because the new grants are time-limited and customers should place their order as soon as possible.

Subsidies from the Guangdong government have definitely played a role in promoting NEV sales during the holidays, said an account manager at automaker BYD.

Publishers: Tang Shihua, Kim Taylor