The biggest metropolitan area in China, home to 25 million residents, has been under a strict lockdown for seven weeks. Authorities have ordered people to stay at home and shut down many businesses, as they try to stamp out the city’s worst ever Covid outbreak.
The lockdowns in Shanghai and other cities have caused massive supply chain disruptions and hit consumer spending in the world’s second largest economy.
Tesla’s China sales plunged 98% in April from the previous month, according to data from the China Passenger Car Association. Its production at the Shanghai factory also slid 81%. It’s a stark turn for the US car maker after a strong start to the year in mainland China.
Toyota said last week that it had suspended operations of 14 production lines at eight plants in Japan, because of the parts shortage resulting from the lockdown in Shanghai.
Nissan Motor also reported a 46% drop in China sales from a year ago.
Although authorities announced Monday that they will allow “low levels of activity” in some areas, numerous residents told CNN that they had not been allowed to go outside their residential complexes.
The Covid restrictions had a severe impact on the city’s car market — almost all dealers were closed, and no sales were recorded at all, according to a statement from the Shanghai Automobile Sales Trade Association released on Monday.
Overall, China’s car sales slumped 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 strict restrictions as it battles the largest 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’s calculations.
Shanghai is hugely important to China’s auto industry.The city ranks No. 1 in overall car sales — about 736,700 new vehicles were sold in Shanghai last year, the most among all Chinese cities, according to statistics from the country’s main insurance regulator.It’s also a major manufacturing hub, home to auto producers like Tesla (TSLA) and Volkswagen (VLKAF), as well as major parts suppliers Bosch and ZF Group.