No cars were sold in Shanghai in April as zero-Covid policy hammers business

By Laura He, CNN Business

Shanghai recorded no car sales last month as China continued its strict pandemic control measures.

China’s largest metropolitan area, which has a population of 25 million, has been under strict lockdown for seven weeks. Authorities have ordered people to stay home and close many businesses, as they try to stamp out the city’s worst Covid outbreak.

Although authorities announced on Monday that they would allow “low levels of activity” in some areas, many residents told CNN they had not been allowed out of their residential compounds.

Covid restrictions have had a severe impact on the city’s auto market – almost all dealerships have been closed and no sales have been recorded, according to a statement from the Shanghai Automobile Sales Trade Association released on Monday.

Overall car sales in China fell 46% in April to 1.2 million vehicles, compared with March. It was the worst April sales in a decade, the China Association of Automobile Manufacturers said last week.

China has imposed tough restrictions as it battles the biggest Covid outbreak in more than two years. More than 30 cities in China are under full or partial lockdown, affecting up to 187 million people across the country, according to CNN calculations.

Shanghai is extremely important for the Chinese automotive industry.

The city ranks first in overall car sales – around 736,700 new Vehicles were sold in Shanghai last year, the most of any Chinese city, according to statistics from the country’s top insurance regulator.

It’s also a major manufacturing hub, home to automakers like Tesla and Volkswagen, as well as major parts suppliers Bosch and ZF Group.

The shutdowns in Shanghai and other cities have caused massive supply chain disruptions and hit consumer spending in the world’s second-largest economy.

Tesla sales in China fell 98% in April from the previous month, according to data from the China Passenger Car Association. Its production at the Shanghai plant also fell by 81%. It’s a sharp turn for the US automaker after a strong start to the year in mainland China.

Toyota said last week it had suspended operations at 14 production lines at eight factories in Japan, due to parts shortages resulting from the lockdown in Shanghai.

Nissan Motor also reported a 46% drop in sales in China from a year ago.

– CNN Hong Kong’s Teele Rebane and Lauren Lau contributed to this report.

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