As nearly the entire country of China remains on lockdown - and the country's auto industry, which was already mired in recession prior to the coronavirus fiasco, gets thrashed even further - some Chinese cities are doing what governments do best: inefficiently throwing money they don't have at their problems.
The Chinese city of Foshan is the first in what we guess is going to be a long line of cities to start subsidizing car purchases, according to a Bloomberg report out Monday.
Consumers who trade in old models are going to be given 3,000 yuan (about $430 USD) of subsidies. Buyers of new vehicles without trade ins will be entitled to 2,000 yuan.
The move comes after President Xi Jinping has urged local officials to help boost auto sales.
Recall, we wrote just days ago that auto sales in China were crushed in January, declining 20.2% on a year over year basis, according to the government-backed China Association of Automobile Manufacturers. The country sold 1.94 million vehicles, according to the CAAM.
The decline is attributable, obviously, to the coronavirus outbreak in the country, combined with the lunar new year falling in late January, as opposed to early February, this year.
And, unfortunately, there is literally no reason for optimism in February, as it was the end of January and early February when China was placed essentially on a full lockdown due to the outbreak of the virus.
In fact, we just wrote a couple weeks ago that auto industry executives are admitting that the virus could "wreak havoc" on sales and production for the first quarter, according to the Asia Times. Automakers across the country have been forced to cancel sales targets and offer subsidies to hold over dealers during the outbreak.
The coronavirus has now killed over 1,700 people (if you are to believe the CCP's likely understated numbers) and more than 70,000 people are now confirmed to be infected in China. 780 million people in China are now living under travel restrictions.