As the Chinese Government announces it will maintain subsidies for electric vehicles and plug-in hybrids, an indication that it will support the industry in recovery;

David Leggett, Automotive Analyst at GlobalData, a leading data and analytics company, offers his view:

“This is an important indicator that Beijing will support the automotive industry as it begins to recover from the COVID-19 crisis, which has decimated the Chinese vehicle market.

“In fact, all eyes will be on China, being the first country hit by the crisis and the first to attempt to navigate a way out.

“A gradual return to work in Hubei province – the original source for the virus – is certainly a very positive sign. However, manufacturing firms have to contend with a still fragile workforce and reactivating stalled supply chains. It will be a while before they can get anywhere near to normal operations.

“Government support should help the sector in the early stages of recovery.

“On the upside, some sales rebound is now in prospect. Volkswagen this week said it expects Chinese passenger vehicle sales to rebound to around 1 million units in March from a low of around 240,000 units in February – when the market declined by over 80%.

“A significant rebound to demand and manufacturing in China will boost industrial confidence around the world over post-COVID-19 recovery prospects later this year.

“However, the authorities in China will also continue to be very wary of the dangers of a further major COVID-19 outbreak and the damage to confidence and the economy that would bring.”