Factory utilization drops below 50% in 2020

The utilization rate of China’s light-vehicle assembly plants declined for the third straight year in 2020 as pandemic disruptions, excess supply and falling sales undermined output. 

The average amount of factory capacity used last year fell to 48.5 percent, from 66.6 percent in 2017 – the last year China’s new light-vehicle sales grew, according to a report released this month by the China Passenger Vehicle Alliance, the data unit of the China Automobile Dealers Association. 

Among 122 manufacturers of sedans, crossovers, SUVs, multi-purpose vehicles and minibuses, the report found only 11 operated above 80 percent of production capacity and 10 utilized 60 percent to 80 percent of capacity in 2020. 

The report didn’t disclose capacity utilization ratios for individual light-vehicle makers.

Domestic and foreign automakers have continued to build new assembly plants in China, the world’s largest new-vehicle market, even as sales have declined in recent years.