Learning from the influence of COVID-19: an empirical study in the Chinese automotive industry

Purpose This paper aims to discuss the market performance and response trend of China’s listed automobile companies and their major suppliers in response to the COVID-19 epidemic. Design/methodology/approach The paper analyzes the data of 20 automobile manufacturers listed in Shanghai and Shenzhen and their main suppliers. Furthermore, the event study method is used to measure and test the abnormal returns (AR) of the company during the event window period and an attempt is made to use case study methodology to further improve the validity of the empirical results. Findings The results show that: (1) the stock prices of listed automobile companies in China were adversely affected by the pandemic. (2) Major suppliers to China’s listed automobile companies have been resilient to the pandemic. (3) In the long run, the impact of the pandemic on the auto industry is stabilizing. The authors believe that the reasons for the above conclusion may come from respectively: (1) temporary investor panic and downward economy. (2) Information differences and risk aversion among investors and supplier enterprise’s extensive customer network. (3) Good market information and direction in China. Originality/value This paper discusses the relevant theories of automobile supply chain and finance field under the epidemic situation and explains the heterogeneity of automobile supply chain stock market from a new perspective of stock market. Finally, the corresponding suggestions put forward by different subjects such as investors, government and automobile enterprises are conducive to the effective operation of China’s automobile supply chain and the stable operation of the stock market, and also provide reference for other countries.