Government lockdown measures aimed at containing a surging coronavirus outbreak wreaked havoc on China’s car dealerships in the first half of the year, and stores with mass-market international brands were hit hardest. 

After steadily improving engineering, design, quality, while adding scale, at home, more recently with electrified vehicles, China's major automakers are targeting two key segments long dominated by Japanese brands: China’s gasoline-electric hybrid market and Southeast Asia’s key car markets.

An urgent need to revive economic growth and consumer spending in the wake of the recent wave of coronavirus infections has prompted Beijing to take a big step and fix a long-standing problem that has undermined used-vehicle sales. The State Council, China’s cabinet, on Wednesday set a Aug. 1 deadline for all provincial governments to eliminate restrictions on residents’ purchase of used vehicles from other provinces. 

The end of government-imposed COVID lockdown meaures and a temporary cut in sales taxes on certain light vehicles are designed to restore business and household activity and create momentum for China's slowing economy. But the reality is as long as the central government maintains a zero-tolerance policy to contain the coronavirus, vehicle sales will remain subdued.