(Yicai Global) Feb. 12 -- A little over 80 percent of China's car dealerships have not yet reopened after the extended Chinese New Year holiday because of the coronavirus outbreak, the findings of a new industry survey showed, in a further blow to the nation's embattled auto sector.
Just 573 of 2,895 4S stores owned by almost 50 auto distributors have gotten back to work, according to the survey on the impact of the epidemic on the industry carried out by the China Automobile Dealers Association and submitted yesterday to the National Development and Reform Commission, the country's top economic planner.
Already reeling from a two-year market contraction, China's auto industry is likely to be badly hit by the virus outbreak both in the short and long term, the report said.
The primary reasons for staying closed were that applications to return to work had not yet been approved by the government, difficulties in getting staff to return, fears of running at a loss, scarcity of epidemic prevention materials and other factors, the report added.
Suspended operations over virus fears have posed substantial liquidity risks for car dealers as payments dry up, the report said. Those that have reopened face considerable challenges including a sharp drop in customer numbers as well as a shortage of materials.
To help ease their operational difficulties and ensure sustainable development of the auto market, the government should relax restrictions on car purchases, bolster the used-car trade and expand the auto market in rural areas, the CADA said.
Editor: Kim Taylor