Could the foretold global recession be hitting Chinese consumers, or is it just a lull before the summer driving season?
CHINA’S passenger car sales rose 10.83 percent in April, the slowest pace over the past five months, the China Association of Automobile Manufacturers (CAAM) said yesterday.
The weaker market demand has re-triggered market speculation of a possible slowdown on the world’s second largest auto market this year that may fail to meet its full year expectation.
Domestic car makers sold a combined 604,900 cars, sport utility vehicles (SUVs), multi-purpose vehicles (MPVs) and minibuses last month, the association said in a statement. Sales in March rose 23.55 percent, the biggest increase in seven months.
“Slow sales growth in April is unusual,” said Li Chunbo, an auto analyst from Citic Securities Co Ltd.
“The purchase desire could be possibly dampened because of people’s lower income from the tamed stock market and real estate sector.”
Car sales rose 7.96 percent to 444,600 units last month while SUV models emerged as a strong boost for the total with an year-on-year growth of 38.12 percent to 39,500 units.
Auto makers delivered 100,000 minibuses during the same period, an increase of 18 percent from a year earlier. MPV sales dropped 1.13 percent.
For the first four months, passenger car sales rose 17.8 percent to 2.46 million, CAAM said in the same auto report, adding the growth was 2.87 percentage points slower than the same period of last year.
Passenger car sales climbed 21.68 percent for past year to 6.29 million, lagging behind the 25.4-percent increase for 2006 from the 2005 level.
CAAM Vice Chairman Dong Yang said earlier that the segment would remain at a double-digit rate to hit 7.3 million units this year.
“The sales growth may be further shrunk to 18 percent this year,” Li said.
FAW Volkswagen ranked first in the top 10 car makers with sales of 47,984 units in April, followed by Shanghai VW and Shanghai GM.
Beijing Hyundai moved up in its position from 12 to 6 last month after launching a revamped Elantra, which sold 11,023 units. The car maker sold a combined 298,300 units, representing 67 percent of the total.
Well, I gotta say that the people around me are feeling poorer with the rapidly rising food and housing costs in this part of the country. Friends have said those exact words, “I feel poorer”.
Even I’ve noticed on a few occasions that 100rmb in the supermarket doesnt buy you what it used to be able to! 100rmb is barely two days worth of groceries now!
Could the slowing of car buying have to do with the credit crunch in China? http://seekingalpha.com/article/70799-chinese-credit-crunch-could-end-commodities-run
MOLTOV,
I think most of the ‘new money’ in common hands these days thats being spent on cars is from investments such as the stock market, or government bonds both of which did very well in the past few years but have slowed down recently!
MOLTOV? Can I call you Ashree? Just kidding…. I think the whole world is slowing down economically (besides the Middle East). I guess a similar parallel is, when people save, they consume less, when there’s less consumption, factories close down or less services are offered, people save more(sort of a self fulfilling prophecy per se)and the economy does worse (Japan was/is a perfect example of this). The United States and China have a symbiotic relationship, before it was Taiwan (I won’t get into the politics), now it’s PRC, although China is a powerhouse, both countries depend on each other. Didn’t the Chinese government also put tighter controls on credit in China as well?
Since the world economic market is so integrated now, it makes sense that we would see some “slowing down” of the auto market - MOST countries (western countries that is) would still drool at the possibility of a DOUBLE DIGIT annual growth in the auto market. Let’s remember that the chinese auto market is STILL GROWING - just not at a runaway pace anymore. Here’s a thought - it seems that this year there was a LOT of new SMALL cars introduced (new QQ2 and QQ5, Geely Panda, GW Peri, BYD F1, Geely CE, the new Chery Faira models and others)…..and most all of these will sell for 50,000rmb OR LESS. Perhaps this is the next thing for the chinese auto industry - affordable cars for a MUCH larger segment of the general population. Interesting statistic (these are 2006 numbers) - for every 1000 people in China, only 24 own cars (in America it’s 700 for every 1000 people, the world average is 120 for every 1000). With the world economy in a “flux” state right now, small cars in China might just become the new “hot” segment of the auto industry. Lower fuel consumption, easier to park, lower in taxes and insurance……let’s give it a year (maybe 2) and see what sales stats will be like for mini/small vs. medium/large cars in China.
Got news for the boys in dark drab green in Beijing…
We’re finally getting the picture here in the U.S. heartland, we don’t need to keep up with the Jones’ anymore. It’s now cool to save money instead of buying that new LCD television (like our parents did). Our consumer cooling here in the U.S. will send clear message to our trading partners that we don’t need to buy everything you make (good and bad quality). FYI; There is over a Billion barrels of oil in North Dakota and twice that much off the coast(s) of: Florida, California, Alaska, Washington and Oregon. Rumor has it there is a large undeclared pool of crude and natural gas under the Eastern slope of Colorado and New Mexico. Bottom line is when the Iranians decide to pull the NUKE trigger the Israeli’s will help them complete their suicide mission. End of problem.