Coronavirus prompts China's online used car trading firms to cut salaries

Uxin

02/03/2020 12:04

BEIJING, March 2 (Reuters) - Two of China's biggest online
used car trading platforms are putting workers on leave or
cutting staff salaries as the coronavirus epidemic dries up
sales, the companies told Reuters. 
    Uxin Ltd  UXIN.O , the country's largest online used car
trading platform, said in a statement on Monday it was using
both strategies as part of efforts to control its budget and
cash flow.
    The company said it would not lay off staff but expected
business in the first and second quarter to be "affected by
varying degrees".
    Chehaoduo, another online car dealer which secured $1.5
billion in funding from SoftBank's  9984.T  Vision Fund last
year, is cutting staff salaries by different degrees in February
and March, according to an internal email seen by Reuters. 
    Chehaoduo, which operates used car trading website Guazi.com
and new car sales platform Maodou.com, said in a statement to
Reuters it expected the impact of the coronavirus epidemic on
car consumption to be temporary but that it was trying to cut
costs by various methods, such as temporary salary adjustments.
    It added it would increase its activity on livestreaming
platforms to try to boost sales.
    China is bracing for a big hit to its economy, President Xi
Jinping has said, but policymakers have pledged to prevent
large-scale layoffs, telling local governments to help stabilise
jobs by drawing on unemployment insurance and similar funds.
 urn:newsml:reuters.com:*:nL4N2AI1D3  urn:newsml:reuters.com:*:nL4N2AI1D3
    Average daily used car sales plunged by around 70% in the
last week of February compared with a year earlier, preliminary
data from China's Automobile Dealers Association (CADA), the
country's top dealer association, showed on Monday. 
    Last month, in a letter publicly addressed to China's
Banking and Insurance Regulatory Commission, CADA asked banks to
extend loans to dealers and offer more temporary liquidity
support such as credit lines to help dealers who are "facing
extreme liquidity pressure".  urn:newsml:reuters.com:*:nL8N2A65PL

 (Reporting by Yilei Sun and Brenda Goh; Editing by Mark Potter)
 ((Y.Sun@thomsonreuters.com; +86 10 66271262; Reuters Messaging:
y.sun.thomsonreuters.com@reuters.net))