But the highly transmissible delta strain of the virus still made its way into the country. Since late July, the virus strain, believed to be brought in by inbound plane passengers, has spread to more than 30 other cities in China.
While the virus has to date caused only around 1,000 infections and no fatalities, the panic it triggered among the public is palpable.
So far two provincial capitals each boasting a population of around 10 million -- Nanjing in east China’s Jiangsu province and Zhengzhou in north China’s Henan province -- and several smaller cities have been largely locked down.
The latest virus outbreak threatens to undermine China’s economic growth. Goldman Sachs, a U.S. investment bank, revised down its predicted growth for the Chinese economy in the third quarter to 2.3 percent from 5.8 percent.
Auto sales and marketing have also been affected. To prevent the spread of the virus, two major Chinese cities -- Harbin and Chengdu -- have suspended auto shows originally scheduled for this month at the request of local governments.
While the coronavirus resurgence has dented the Chinese economy, including its auto market, the long anticipated easing of the chip crunch is still not in sight.
In July, chip supply remained as tight as in the previous months, as reflected by the continued slump in vehicle production industrywide.
During the month, overall vehicle output shrank for the third straight month, slipping 16 percent from a year earlier to 1.86 million.
Two largest players in the market -- Volkswagen Group and General Motors -- were both hit hard by the chip shortage, judging by the data released by their local joint venture partner SAIC Motor Corp.
Last month, output of SAIC-VW, which builds vehicles for VW and Skoda brands, plunged to 72,145 vehicles, less than half of the number a year earlier.
Production at SAIC-GM, which assembles Cadillac, Buick and Chevrolet vehicles, also fell 26 percent to 85,335 vehicles.
In June, the China Association of Automobile Manufacturers expected the chip shortage in China’s auto industry to improve in July.
But the harsh reality led the industry group to lower its forecast. This week it predicted that the chip crunch will linger for the coming months.
With vehicle production curbed by tight chip supply, China’s new-vehicle market has contracted for three months, with July sales dropping 12 percent year on year to 1.86 million.
And the latest coronavirus outbreak, which has yet to be brought control, is now adding to the gloom over the market.
