(Boursier.com) — The action You’re here fell 4.8% on Wall Street to $975.93 on Monday after reports that the resurgence of the coronavirus in China is weighing on sales of vehicles, including electric ones, in the country. The sanitary confinement imposed for more than two weeks in Shanghai has indeed forced the American group to close its factory in this city since March 28 and for the moment, no reopening date is in sight.
Since last Saturday, the Chinese manufacturer of electric vehicles Nio (-1.5%) also had to close its factory, which is located in another province, Hefei, but which is experiencing shortages of components from the Shanghai region, placed under strict confinement. Other manufacturers, including volkswagen and Toyota engine have also had to close their Shanghai factories in recent weeks due to Covid-19.
The China Association of Automobile Manufacturers, quoted by ‘Reuters’, said on Monday that car sales in China fell 12% in March from March 2021, adding that it expected no improvement in April. Despite this, sales of electric vehicles more than doubled in March year on year. However, according to Deutsche Bank analysts, the month of April is shaping up to be very bad, due to stronger than expected disruptions caused by the new wave of Covid-19 in China. DB analysts expect electric vehicle sales to decline in April, or even May as well.
In addition to factory closures, car makers are dealing with rising component and raw material costs, which led Tesla and Nio to recently announce price hikes.