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COVID-19 Pandemic: China Handing Out Cash to Car-Buyers to Help Revive Auto Industry

Representational image. (Photo: Reuters)

Representational image. (Photo: Reuters)

China suffered a whopping 79 per cent plunge in the month of February when the country recorded sales of just 3,10,000 vehicles.

China, which is currently reeling back to normalcy after the outbreak of COVID-19 is now aiming to revive the auto industry by handing out cash to car buyers. In a normal year, the country records the sale of more than 60 lakh cars, which was reduced to a mere 37 lakh during the lockdown.

In comparison to the sales of last year’s first quarter, the Chinese auto industry suffered a decline of 42 per cent, according to a data released last week by the China Association of Automobile Manufacturers (CAAM). This amounts to a whopping 79 per cent plunge in the month of February when the country recorded sales of just 3,10,000 vehicles.

The auto industry in China plays a crucial role in the country’s economy where more than 40 million people rely on the sector for jobs. The industry generates more than $1 trillion in revenue each year that amounts roughly 10 per cent of the country’s manufacturing output.

At the moment, China’s economy is still trying to rebound after the government imposed a lockdown on major cities and restricting travel. Car production, at least, has started to resume in China: Even Wuhan, the original epicentre of the virus and a major hub for the global auto industry, ended its 76-day lockdown last week.