(Yicai Global) March 6 -- SAIC Motor, China's largest automaker, looks set to become the country's first big car manufacturer to cut staff salaries as the novel coronavirus outbreak drags down sales, the Economic Observer cited an insider close to the firm as saying.

The Shanghai-based company has nearly 13,000 direct employees and almost 220,000 including subsidiaries, according to its 2018 report. Two units, SAIC Maxus and parts maker Shanghai Huizhong Automotive Manufacturing, have already confirmed plans to reduce salaries and bonuses.

Passenger car sales in China, the world's biggest auto market, have fallen every month since July 2018, with the coronavirus adding to producers' woes. The Covid-19 epidemic broadsided the sector last month. Total sales dropped 80 percent, the most on record, according to preliminary data published by the China Passenger Car Association on March 4. 

SAIC Motor has yet to reveal its February sales data, but posted a near 35 percent annual drop in January. Its joint ventures shared the flop, with SAIC Volkswagen Automotive's sales falling 40.5 percent, those at SAIC General Motors slipping 30.5 percent, and those at SAIC-GM-Wuling Automobile plummeting 51.1 percent.

SAIC Maxus plans to scale back its performance-based bonuses from this month, with the highest earners facing the biggest cuts, according to the report. The firm admitted it is losing money when it revealed the pay cut plan, and said that sales fell annually for the first time ever in February and the quarterly sales figure will also be down on the year. Huizhong plans to slash gross salaries by 22.2 percent, also from this month.

Only consumers who urgently need a car will buy while the epidemic is ongoing, the CPCA added, though more and more dealerships are resuming operations across the country. There was a rush of re-openings in the last week of February and some carmakers even released new models, which led to a surge in purchases, it said.

Editor: James Boynton