China's Auto Market Rebounds, but It's Still Deep in the Woods
It is quite possible that China will overtake the United States this year to become the world's largest automobile market. In the first quarter, China succeeded the US as the “champ” with sales of 400,000 more vehicles than the new Number 2. This news is not as happy as everybody would like.
China Association of Automobile Manufacturers (CAAM) data, released April 9th, show first quarter domestic car sales reaching 2.6788 million units, up 3.88% over the same period last year, a rebound that looks to be primarily due to the recent market stimulation policies. Since December last year, the government has adjusted fuel consumption taxes, exempted road maintenance fees, and reduced purchasing fees for vehicles with displacement below 1.6L, all to encourage the purchase of new cars.
Another promoting factor is that March is the traditional peak season for car buying, and distributors purchased more cars at the end of the quarter to get high bonuses, though pessimistic predictions in December and January meant some car models are out of stock because production lines were stopped and workers furloughed, and assembly factories only began to return to normal production in March.
Still, as Zhu Yiping, assistant secretary-general of CAAM, said, “This year' s domestic first quarter car sales haven’t reached a high year-on-year growth, as it is not easy to have positive growth in both production and marketing after the negative growth of the last three or four quarters.”
The government stated in its "Automobile Industry Adjustment and Stimulus Plan" that the target of "production and sales of motor vehicles in 2009 is over 10 million, with three-year average growth rate reaching 10%." If the sales trend of the first quarter can be maintained, it should not prove too difficult to reach the goal.
The improving figures are encouraging but do not reveal the whole picture. China's auto industry still faces three other serious problems: an uneven spread of models, decreasing profits even with improved production, and a fall in exports. Whether the industry is really rebounding is yet to be seen.
The commercial vehicle market is still hovering near bottom. In the first quarter, though truck sales experienced an 11.22% increase, year-on-year, sales of passenger cars, semi-trailer tractors, incomplete passenger cars, and incomplete trucks continued to decline.
Overall, the economic outlooks for the automotive industry as a whole are not optimistic. According to CAAM, January and February's main business income for carmakers was 320.413 billion yuan, down 9.42%, while profit amounted to 9.879 billion yuan, down 50%.
While the domestic market has rebounded a bit, the international situation still looks grim. First quarter auto exports faced serious challenge. CAAM says the number of vehicles exported was 61,000, 62.06% below first quarter 2008, with the top five exporters showing substantial declines.
China's car firms are eyeing assets of overseas carmakers. It is reported that China's Geely Automobile Holdings is likely to partner a bid with another Chinese company for Ford's Volvo, a Swedish maker of passenger cars. And another Chinese consortium wants to acquire part of the assets of Delphi, an US auto parts maker.
Acquisitions of this sort pose difficulties of their own. In addition to the problem of supplying medical coverage and other welfare contracted to employees of these enterprises, whether the Chinese firms have the management capability necessary to successfully run overseas companies is in doubt. China's Shanghai Automotive Group (SAIC) acquired South Korea's Ssangyong Motor a few years ago, but now Ssangyong Motor is up for bankruptcy protection, and SAIC is being forced to give up control.
Views:0
- Allison Invests in Autotech Ventures to Access to Global Mobility Startups 2022-02-22
- 100 Parts Stores in 10 Countries! FOTON Parts Sales Jumped in Overseas Market 2022-01-10
- Weichai Ranks No. 1 in 2021 China Auto Spare Parts Industry 2021-07-15
- CIMC Teams up with Shaanxi Automobile to Make a Flagship High-end SPV 2021-07-02
- Auto Shanghai 2021 to Showcase Latest Products And Technologies 2021-04-19
- Auto Shanghai 2021 to Open Its Doors 2021-04-18
- Auto Shanghai 2021: ZF is Driving Intelligence for Software-defined Vehicles 2021-04-16
- Auto China 2020 to be Held Between September 26- October 5 in Beijing 2020-09-09
- SINOTRUK Handover the Second Batch of Electric Autonomous Trucks to Tianjin Port 2020-08-20
- Dongfeng 5G + Autonomous Driving Container Trucks Go Into Trial Operation 2020-05-15
Submit Your Requirements, We Are Always At Your Service.
- BYD Stopped the Production of Fuel Vehicles
- Geely Began Test Runs of Green E-methanol Vehicles in Danmark
- 2022 SANY Global Dealer Summit Was Held Successfully Online
- BYD and Shell Partner on EV Charging across China and Europe
- Daimler Truck Significantly Increase Sales, Revenue and Net Profit in 2021
- Scania Year-end Report January-December 2021
- Hyundai Motor and Iveco Group Sign MOU to Explore Future Collaboration
- GAUSSIN Enters China, the Largest Truck Market in the World
- Over 1,200 Hydrogen-powered Vehicles Deployed for the Beijing Winter Olympics
- Chinese New Year Holiday Closure Notice
- China's Truck Exports Grew by 30% YOY to 63490 Units in January-February
- China's New Energy Heavy Trucks Grew Despite an Overall Slump
- Heavy-duty Truck sales in China Fell by 54% to 54,000 units in February
- SINOTRUK Achieves Sales of 27,725 Vehicles in January, 2022
- China’s Domestic Tractor Sales Exceed 40,000 Units in January
- 2021 JAC International Pickup Export Performance
- JAC Achieved a Great Result in 2021
- China's Truck Export in 2021 Reached a 10-year Peak
- Heavy-duty Truck Sales in China Fall 57 Percent on Year in January
- China Recorded Sales of 645000 Tractors in 2021