China Car Market April Sales In Review – sales down month to month but up year on year

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Automakers made greater efforts to clear their stocks at the end of March, and dealers were faced with severe financial strains, which affected deliveries in early April. The second week was still cold as the auto market cooled down after the three day long Qingming Festival and the price of fuel jumped at the gas stations. The third and fourth weeks saw market performance driven up by Shanghai Auto Show and the May Day holiday. Some local automakers and joint ventures halted or reduced production due to the parts shortage caused by the Japanese earthquake. Also, the Central Bank raised interest rates slightly in April.

There are 21 working days in May, one day more than this April and last May, which will be a positive factor to the month’s market results. However, there will always be a one-week cold period after the May Day holiday. Japanese automakers also advanced their summer overhaul and extended the May Day holiday by three to seven days. Therefore, the market performance in the first half of the month won’t be satisfactory. The influence of the Japan earthquake on the Japanese automakers in China is expected to last for three to eight months. The impact in May will be the greatest, which will surely reduce the sales. The global fuel prices reduce recently, and it seems it’s unlikely for Chinese authorities to raise the domestic fuel prices. However, the fuel prices are still at a high level, and some potential consumers are hesitating about vehicle purchase. Therefore, the sales growth of passenger vehicles in May will be lower.

According to a consumer survey undertaken at the Shanghai Auto Show, consumers are becoming less sensitive to auto prices is decreasing because they have felt the CPI rise and the unchanged price level of auto products in the past years. The consumers buying cars below A segment are more attentive to fuel consumption, and those buying cars above A segment have higher requirement for the car’s configurations.

The overly rapid growth of Chinese auto market is close to the tolerance limit of the society. Therefore, the three incentive policies are not extended, and the government takes all kinds of restrictive measures on automobile consumption and usage. It also cancels the 12^th five-year planning for the auto industry, because the auto industry has developed quite ahead of planning and is no more an industry that should be encouraged to develop.