China's auto industry in September continued the brisk market performance started from August. The country's auto sales in the first three quarters totaled more than 13 million units, approaching the annual sales for whole year of 2009, when China overtook the United States to become the world' s largest auto maker and auto market with production and sales hitting 13.79 million and 13.64 million units respectively, according to the China Association of Automobile Manufacturers (CAAM) said in a recent press conference.
In the first nine months, auto sales leapt 35.97 percent year on year to 13.1384 million units, while output soared 36.10 percent to 13.0827 million.
Auto sales increased 17.73 percent month on month in September and 16.89 percent year on year to 1,556,700 units. Output in the month grew 24.69 percent month on month and 16.94 percent year on year to 1,592.900 units.
The following table shows China's September auto sales in detail, based on the CAAM data:
Table 1: China's auto sales in September and in Jan.-Sept. 2010 (in unit) September sales (unit) Change m-o-m (pct) Change y-o-y (pct) Jan-September sales (unit) Change y-o-y (pct) Passenger vehicle 1,211,400 18.89 19.34 9,897,500 36.68 Commercial vehicle 345,300 13.84 9.01 3,240,900 33.85 Total 1,556,700 17.73 16.89 13,138,400 35.97 (Source: CAAM)
Here is another table showing China's September auto output in detail, based on the CAAM data:
Table 2: China's auto output in September and in Jan.-Sept. 2010 (in unit) September output (unit) Change m-o-m (pct) Change y-o-y (pct) Jan-September output (unit) Change y-o-y (pct) Passenger vehicle 1,230,200 26.12 19.89 9,880,300 38.07 Commercial vehicle 362,700 20.05 7.95 3,202,400 30.35 Total 1,592,900 24.69 16.94 13,082,700 36.10 (Source: CAAM)
The following chart shows China's auto output and sales from January to September (in unit):
(Source: CAAM)
Here is another chart showing China's auto sales since 2009 (in units):
(Source: CAAM)
According to CAAM, Chinese automakers' inventory added 35,100 units in the month to 539,200 units, which, however, remained still below the aggregate figures by end-July.
As China's auto market rebounded in recent months, a reasonable gain in auto producers' inventory was seen in September. But Chinese auto manufacturers' overall auto reserves did not revive during the January-September period as the total figure always hovered between 500,000-600,000 units.
By the end of September, Chinese automakers' passenger vehicle inventory rose to 350,800 units, including 213,000 sedans and 96,200 crossovers, while the figure for commercial vehicles stood at 188,400 units.
--Passenger vehicles
China's passenger vehicle market continued to retain robust growth started from last month. The CAAM predicted the country's passenger vehicle sales likely to exceed 13 million units this year.
China's passenger vehicle sales totaled 9.898 million units in the first three quarters of 2010, up 36.68 percent from the same period last year, according to the latest data released by CAAM.
Passenger vehicle output during the nine months surged 38.07 percent to 9.88 million units, the CAAM said.
In September, passenger vehicle sales went up 18.89 percent month on month and 19.34 percent year on year to 1.21 million units, while output up 26.12 percent month on month and 19.89 percent year on year to 1.23 million units.
The following table shows the sales of major sub-type passenger vehicles in September and in the first nine months of 2010:
Sub-type passenger vehicle Sept sales (unit) Change m-o-m (pct) Change y-o-y (pct) Jan-Sept sales (unit) Change y-o-y (pct) Car 850,800 19.71 15.81 6,804,400 30.61 MPV 40,300 19.50 52.54 314,500 88.62 SUV 125,000 6.60 79.89 939,100 110 Crossover 195,300 24.22 5.84 1,839,500 29.24
The following is a table of the output of major sub-type passenger vehicles in September and in the first nine months of 2010:
Sub-type passenger vehicle Sept output (unit) Change m-o-m (pct) Change y-o-y (pct) Jan-Sept output (unit) Change y-o-y (pct) Car 837,200 22.03 13.81 6,799,200 32.38 MPV 42,100 19.75 52.54 319,400 92.22 SUV 126,200 10.85 74.37 946,200 120 Crossover 224,700 60.09 17.94 1,815,500 28.42
The following chart shows China's passenger vehicle sales since 2009 (in unit):
Here is another chart showing China's passenger vehicle output since 2009:
China's homegrown passenger vehicle sales hit 509,300 units in September, representing 42.04 percent of the country's total, up 0.88 percentage points from the previous month.
The passenger vehicle sales of Japanese, German, American, South Korean, and French brands stood at 243,000, 189,100, 131,300, 103,000 and 35,700 units respectively, as is shown in Chart 5:
Homegrown car sales amounted to 240,000 units in September, taking up 28.21 percent of total car sales, up 0.66 percentage points from August. The car sales of Japanese, German, American, South Korean, and French brands each separately reached 194,400, 172,400, 125,800, 82,500 and 35,700 units, as in Chart 6:
During the first three quarters of 2010, homegrown passenger vehicle sales totaled 4.49 million units, accounting for 45.35 percent of China's total. The sales of Japanese, German, American, South Korean, and French-brand passenger vehicles stood at 1.96 million, 1.43 million, 1.01million, 748,200 and 261,000 units respectively, as is shown in Chart 7:
Sales of domestically produced cars alone hit 2.06 million units, or 30.30 percent of China's total, during the first nine months. The car sales of Japanese, German, American, South Korean, and French brands reached 1.57 million, 1.33 million, 962,000, 613,600 and 261,000 units, respectively, as in Chart 8:
Sales of small passenger vehicles with engine size of 1.6 liters or below totaled 823,300 units in September, up 19.91 percent month on month and 17.99 percent year on year.
Sales of such vehicles took up 67.96 percent of China's total passenger vehicle sales in September, up 0.58 percentage points from August but down 0.78 percentage points from September 2009.
In the first nine months of the year, sales of passenger vehicles of 1.6 liters or below accounted for 68.24 percent of total passenger vehicle sales, down 1.48 percentage points from the same period last year.
--Commercial vehicles
China's commercial vehicle sales totaled 3,240,900 units in the first nine months of 2010, up 33.85 percent from the same period last year, according to latest CAAM data.
Commercial vehicle output in the first three quarters jumped 30.35 percent year on year to 3,202,400 units.
September's commercial vehicle sales reached 345,300 units, up 13.84 percent on month and 9.01 percent on year. Output in the same month went up 20.05 percent on month and 7.95 percent on year to 362,700 units.
The following table shows China's output and sales of sub-type commercial vehicles in September, based on the CAAM data:
September output (units) Change m-o-m (pct) Change y-o-y (pct) September sales (units) Change m-o-m (pct) Change y-o-y (pct) Bus 34,400 13.76 17.63 34,800 15.38 20.09 Truck 240,300 21.92 7.30 225,600 13.27 8.80 Semi-trailer 27,400 28.39 0.07 26,500 26.79 -5.73 Incomplete bus 7,324 -0.79 -8.16 7,278 -0.84 -8.13 Incomplete truck 53,300 15.65 12.36 51,100 11.76 15.21
The following is a table showing the output and sales of sub-groups of commercial vehicles in the first nine months of 2010, based on the CAAM data: Jan-September output (units) Change y-o-y (pct) Jan-September sales (units) Change y-o-y (pct) Bus 256,200 32.87 262,200 35.26 Truck 2,090,700 22.85 2,115,100 26.53 Semi-trailer 274,800 110 276,200 100 Incomplete bus 62,800 7.06 62,200 6.29 Incomplete truck 517,900 39.75 525,200 45.56
The following chart shows the commercial vehicle output since 2009: (Source: CAAM)
Here is another chart showing China's commercial vehicle sales since 2009: (Source: CAAM)
--Outlook
The number of motor vehicles in use, including motorcycles, tractors, trucks and cars, has hit 199 million in China, including more than 85 million automobiles, according to a statement released by the Ministry of Public Security on October 7.
The number of motor vehicles in China has been increasing at a speed of more than 20 million per year and the population of drivers grows at a speed of more than 22 million per year, it reads.
Statistics from the Beijing Transportation Research Center (BTRC) revealed that the number of registered cars in Beijing had topped 4.5 million in September, and would possibly exceed 7 million by 2015. Analysts predict that the city's road system will be over-burdened by then, as its full capacity is estimated to be 6.7 million vehicles.
Although the expansion in the auto industry has brought in an industrial boom and played an important role in China' s domestic demand, it has also triggered widespread concerns over the country' s energy capacity, pollution levels and rising traffic pressures.
Some experts and officials have warned that the burgeoning number of vehicles could pose threats to the country' s energy reserves, as China is still highly dependent on oil imports. China's oil dependency reached alarming levels last year with imports accounting for more than 50 percent of consumption. However, that figure rose to 55 percent by the end of August this year.
Experts also believe that auto market's growth should be maintained at around 1.5 times the growth in the country's gross domestic product (GDP), which means China's auto sector growth should rise less than 13.5 percent, since GDP expanded by 9.1 percent in the past year.
Chen Bin, head of industrial coordination at the National Development and Reform Commission, the nation' s economic planning body, said last month at a forum in Tianjin that local governments had been making "blind" efforts to open new factories and expand capacity, which could hamper sustainable development of the national economy. He said local authorities should avoid setting unrealistic output quotas for automakers, and should end preferential land and tax policies for them. He also claimed that the government should strengthen supervision of industrial efficiency data to guide reasonable resource allocation. "China's auto industry is not only facing the tough task of boosting domestic consumption, but also responsible for maintaining sustainable and coordinated economic and social development", Chen said.
However, some other experts hold different viewpoints, asserting that China's automotive industry is not overheated despite its continued fast growth. "In the first three quarters, China's auto industry saw its growth pace returning to rationality, which indicated the industry had entered into a stable, healthy and normal state," said Dong Yang, CAAM vice president.
"The auto industry must maintain a double-digit growth to keep China's economy running in a sustainable way as the government continues its industrial restructuring effort and encourages people to spend money", Dong added.
Analysts forecast that auto sales in the world's second-largest economy will surge 25 percent to 17 million units for the full year, providing a striking contrast to automakers fighting flat or slackening sales in the United States and other mature markets. Moreover, global automakers are still developing massive expansion plans in the country, hoping the booming market will offset sales slumps elsewhere in the world.
Xu Changming, a researcher at the State Information Center, also believes it is unnecessary to worry about the overcapacity. He said the capacity utilization of China's auto industry was roughly 120 percent in 2009. "Modern enterprises, especially privately-owned ones, are sensitive to the market and can make market-oriented plans for production, " he said.
In the meanwhile, China's new energy vehicle industry is developing smoothly.
China's annual production capacity of electric motor vehicles will reach 1 million units by 2020. New energy vehicles are key to the development of China's auto industry, and public transport should also be the top priority for use of new energy vehicles, said Minister of Science and Technology Wan Gang on October 18.
While extolling new energy cars, Wan said promotion of public transportation would also help to ease the problems caused by expanding car ownership in China.
Twenty-five Chinese cities have jointed a pilot program co-sponsored in 2009 by Ministry of Science and Technology, Ministry of Finance, National Development and Reform Commission, and Ministry of Industry and Information, to promote energy-efficient and new-energy vehicles.
The project aimed to replace public transport vehicles with electric vehicles to support the development of electric vehicle industry, and a total 8.5 billion yuan (1.28 billion U.S. dollars) from the capital market has entered the electric car industry since the debut of the project in 2009, said Wan.
Moreover, China is also conducting taxation reform on new energy vehicles.
top legislature has begun reviewing the draft law on vehicle and vessel taxation, which was passed by the State Council on October 12 and is set to replace the current tax law on vehicles and vessels that took effect in 2007.
The draft law sets out provisions for reducing taxes on energy-saving and clean energy-powered vehicles while imposing more taxes on cars with big engines.
Taxes on vehicles with engines smaller than 1.6 liters, which account for 58 percent of Chinese passenger cars, defined as autos with a seating capacity of less than nine passengers, will be reduced slightly or be kept unchanged, Chinese Finance Minister Xie Xuren said in his report.
Taxes on vehicle with engines bigger than 1.6 liters but smaller than 2.5 liters will see a "moderate" increase in taxes while a "relatively large" increase will be imposed on cars with engines larger than 2.5 liters, he said.
Taxes on vessels will remain unchanged while taxes on motorcycles, three-wheel motor vehicles and low-speed trucks mainly used in rural areas will be reduced or remain unchanged, according to the draft law.
The draft law also stipulates that owners of energy-intensive and highly polluting vehicles will have to pay more tax.
In addition, under the current development rate of China's new-energy vehicle industry, the country's battery power demand may exceed 7 billion Wh (Watt-hours) in 2012, far above the country's current output capacity, Wang Zidong, director of the Power Battery Test Center for the National 863 electric vehicle key project, said in a forum held in Shanghai.
According to Wang, the number of hybrid vehicles in use will reach 500,000 units in 2012, including 150,000 plug-in hybrid vehicles. For example, if the power demand for each hybrid vehicle averages 5 kWh, then the total amount will hit 2.5 billion Wh.
Pure electric vehicles are projected to total 100,000 units in 2012, with battery power demand for each unit ranging from 30 kWh to 160 kWh, according to their different size. Since the ratio of large-sized to small-sized vehicles is estimated to be 1:5, the total power demand of pure electric vehicles is calculated to be around 5.6 billion Wh. Thus the aggregate battery power demand of China's auto industry will top 7 billion Wh.
Meanwhile, statistics from the Power Battery Test Center show that, the current aggregate output of China's battery makers is 200 million Wh at the most. And China's upper level of battery power output for vehicle use is estimated to 1.3 billion Wh, far too little to meet the market demand.
Experts say that huge gaps still remain between China and the world advanced level in terms of NI-MH batteries and high-power lithium batteries, but the gap is not that obvious in high-energy lithium power battery technologies.
Currently several battery manufacturers are planning to increase their output capacity to over 1 billion Ah, but there's still long way to go to maintain their quality consistency and extend battery cycle life.
Experts note that China's battery power industry is still at the initial stage of R&D and testing. Huge efforts are still needed to realize mass production and catch up with the development pace of the new-energy vehicle industry.
Furthermore, China has set up 2-billion threshold on new commercial vehicle startups. The total investment in setting up a greenfield commercial vehicle manufacturing project in China shall not be less than 2 billion yuan, including minimum capital fund requirement of 800 million yuan, according to a new regulation issued the Ministry of Industry and Information Technology (MIIT) on its website Monday.
The new rule, effective from January 1, 2011, also stipulates that investment in production facilities of such an enterprise shall not be less than 800 million yuan.
A product R&D department is also a must in opening up a commercial vehicle manufacturing company, with a minimum investment requirement of 500 million yuan and investment in related facilities and equipment of no less than 100 million yuan.
Under the new access rules for commercial vehicle manufacturing, heavy-duty cargo-carrying vehicle manufacturers should also have their own engine production line.
The new rules also set down minimum levels for commercial vehicle production capacity of an aforesaid manufacturer. The minimum annual output capacity of heavy-duty, medium-duty, light-duty cargo-carrying vehicles, large and medium-sized buses, and mini buses is set at 10,000 units, 50,000 units, 100,000 units, 5,000 units, and 50,000 units, respectively.
Moreover, the new rules say that heavy, medium, and light-duty cargo-carrying manufacturers should have the capability to produce operator cabs, chassis, and vehicle bodies, and should be capable of producing at least two of the three major vehicle parts, namely engines, gearboxes, and axles.
According to another set of rules released by MIIT on the same day for low-speed vehicle producers, these companies should meet the same production standards as light-duty cargo-carrying vehicle makers by the end of 2020. Low-speed auto producers that fail to live up to the new standards by then may transfer to the manufacture of three-wheeled vehicles, special vehicles, or auto parts.
Under new production permit regulations, registered capital of a three-wheeled enterprise has to be no less than 50 million yuan, fixed assets associated with three-wheeled vehicle production has to be no less than 80 million yuan, and its lowest production capacity is set at 50,000 units. Furthermore, vehicle output in two years down the road has to be no less than 2,000 units.
As for low-speed cargo-carrying vehicle manufacturers, the minimum registered capital and fixed assets have been set at 80 million yuan and 100 million yuan respectively. The minimum level of output capacity has been set at 5,000 units, and the minimum output volume in two consecutive years at 500 units.
--Major players
The Shanghai Automotive Industry Corporation (SAIC) continued to lead Chinese auto manufacturers in terms of sales both in September and in the first three quarters this year, according to CAAM. The following Chart shows vehicle sales of China's top 10 auto manufacturers in September:
(Source: CAAM)
The ten automakers had combined sales of 1.355 million units, taking up 87 percent of the country's total. All the above ten automakers saw sales growth compared with last month, and ChangAn Auto, Dongfeng Motor, and GAIC posted relatively higher growth rate.
The following Chart shows vehicle sales of China's top 10 auto manufacturers in the first three quarters of 2010:
(Source: CAAM)
The combined sales of the 10 automakers amounted to 11.33 million units, representing 86 percent of the country's total.
The following two charts show the sales of China's top ten commercial vehicle manufacturers in September and January-September period of 2010:
The combined sales of the 10 automakers amounted to 236,900 units, representing 69 percent of the country's total.
The total sales of the top 10 automakers stood at 2,273,700 units, covering 70 percent of the country's total.
Charts 15 and 16 show the sales of China's top 10 passenger vehicle manufacturers in September and in the first nine months of 2010:
The above ten passenger vehicle makers continued to maintain good growth compared to same period of last year. And Shanghai GM continued to register as the rapidest growing passenger vehicle maker.
The ten enterprises realized aggregate sales of 5.71 million passenger vehicles in the first three quarters, representing 58 percent of the total.
The following charts 17 and 18 show the sales figures of China's top 10 carmakers in September and in the first nine months of 2010:
During the first three quarters this year, the above ten carmakers achieved sales of 4.38 million vehicles, covering 64 percent of the country's total.
Charts 19 and 20 show sales of China's top 10 best-selling cars in September and in the first nine months of 2010:
Nissan Teana is the only Japanese brand car edging into the top ten. And the above ten car brands realized total sales of 193,900 units in September, 23 percent of the total.
The above ten car brands registered combined sales of 1.55 million units, 23 percent of the total.
Charts 21 and 22 show the sales figures of China's top five best-selling brands of SUVs in September and in the first nine months of 2010:
In September, sales of the above five SUV brands stood at 52,700 units, 42 percent of the total SUV sold on the market.
The above five SUV makers reached combined sales of 396,000 units, 42 percent of the total.
Chart 23 and 24 show the sales of China's top five best-selling MPVs in September and in the first nine months of 2010:
(Source: CAAM)
