China's auto sales growth slows in Q1

CE.cn - In March, China's vehicle production and sales volume is 1.8273 million and 1.8285 million respectively, increasing by 44.99 percent and 44.32 percent than previous month and 5.34 percent and 5.36 percent than the same period of last year.

March is a crucial month, and the production and sales volume is relatively large in this month. But this March there isn't new record high, the growth slows down, and it is the second consecutive month that see year-on-year growth rate lower than 6% since April 2009.

Monthly and quarterly growth rate both dropped greatly; the overall condition was below expectation. There are five main reasons. The first is the termination of preference policies on purchase tax, vehicles going to the countryside and auto replacement. The second is the continuous increase of fuel price. The third is the implementation of anti-congestion and purchase restriction policy in some cities. The fourth is the slack growth of operating vehicle market due to the influence of fuel consumption access policy. The fifth is the impact of Japanese earthquake, the influence of which to China's auto industry will take further observation because of inadequate information transparency and it cannot be underestimated.

The year on year growth rate of all vehicle types declined obviously, crossover passenger vehicle and semi trailer towing vehicle experienced negative growth year on year. In March, the growth of production and sales volume of passenger vehicle and commercial vehicle both dropped sharply than the same period of last year. The production and sales volume of passenger vehicle in March was 1.3834 million and 1.3476 million, going up by 6.45 percent and 6.54 percent, much lower than the same period of last year, which was 72.19 percent and 63.22 percent respectively. Among the passenger vehicle types, except crossover passenger car, which had production and sales volume decreased by 6.79 percent and 9.99 percent, other types all had different degrees of increase, but the growth rate was obviously lower than the same period of last year.

In March, the production and sales volume of commercial vehicle was 0.4439 million and 0.4809 million, increasing by 2.05 percent and 2.25 percent year on year, much lower than the same period of last year, which was 25.99 percent and 38.79 percent. Some vehicle types increased and some decreased, in which passenger bus had an outstanding performance, the production and sales volume of which increased by 16.41 percent and 22.52 percent. Freight car saw slight increase by 4.31 percent and 2.22 percent. The production and sales volume of semi trailer towing vehicle went down by 12.89 percent and 7.95 percent and incomplete passenger vehicle went down by 10.42 percent and 5.02 percent year on year. The production volume of incomplete freight vehicle's declined while the sales volume increased slightly. Similar to passenger vehicle, the year on year increasing rate of all commercial vehicle types was obviously lower than the same period of last year.

The market share of passenger vehicle with 1.6L engine displacement and below was smaller than previous month. In March, the sales volume of 1.6L and below passenger vehicle was 931.8 thousand, increasing by 36.81 percent than February and 7.31 percent year on year. 1.6L and below vehicles accounted for 69.15 percent of total passenger vehicle, going down by 1.27 percent than previous month and up by 0.5 percent year on year. In which sales volume of 1.6L and below car was 647.7 thousand, increasing by 41.67 percent than previous month and 13.12 percent year on year; 1.6L and below car took up 70.72 percent of total cars, decreasing by 1.43 percent than February.

The market share of self-owned brand passenger vehicle continued to decrease. The total sales volume of original brand passenger vehicle was 622.3 thousand in March, increasing by 36.19 month-on-month and 2.02 percent year-on-year; it accounted for 46.18 percent of total passenger vehicle, the percentage declined by 1.06 percent than February and 2.04 percent than the same period of last year. Sales volume of Japanese, German, American, Korean and French brand vehicles was 269.5 thousand, 190.7 thousand, 140.5 thousand, 91.5 thousand and 33.1 thousand respectively, taking up 20 percent, 14.15 percent, 10.43 percent, 6.79 percent and 2.45 percent of total passenger vehicle.

Sales volume of self-owned brand sedan in March was 290.3 thousand, accounting for 31.70 percent of total car sales, which increased by 0.68 percent than February and 0.21 percent year on year.

Vehicle export volume exceeded 60 thousand. According to statistic data from China Association of Automobile Manufacturers, China's vehicle export volume was 63 thousand in March, increasing by 45.26 percent month-on-month and 59.77 percent year on year. In which the export volume of passenger vehicle was 33.4 thousand, increasing by 30.80 percent month-on-month; the export volume of commercial vehicle was 29.6 thousand, increasing by 65.96 percent month-on-month. The above mentioned two vehicle types increased by 68.78 percent and 50.68 percent year on year. From January to March, the total export volume of passenger vehicle and commercial vehicle was 86.2 thousand and 72.1 thousand, increasing by 63.85 percent and 41.24 percent year on year. The order of top five bestselling vehicle manufacturers from January to March is: Chery, Changan, Great Wall, JAC and Dongfeng, which witness export volume of 28.6 thousand, 19.1 thousand, 16 thousand, 14.6 thousand and 13.5 thousand respectively, increasing by 71.93 percent, 45.02 percent, 31.80 percent, 214 percent, and 43.24 percent. These five companies took up 58 percent of total export volume.

According to the processed customs statistics, vehicle import and export in February declined on a month-on-month basis but maintained growth momentum on year-on-year basis. The total import and export value in February was US$7.49 billion, declining by 32.64 percent than January and increasing by 21.51 percent year on year. In which import value was US$4.2 billion, decreasing by 28.53 percent month-on-month and increasing by 34.10 percent year-on-year; export value was US$3.279 billion, decreasing by 37.27 percent month-on-month and increasing by 8.45 percent year-on-year.

Enterprises' economic benefits kept growing. From January to February, the total industrial output of vehicle companies above designated size was RMB712.059 billion Yuan, increasing by 18.87 percent year on year; the total value of vehicles shipped for export was RMB36.714 billion Yuan, increasing by 27.86 percent year on year. During January and February, key vehicle companies (groups) completed total industrial added value of RMB72.8 billion Yuan, increasing by 14.16 percent year-on-year; the total industrial output value was RMB316.514 billion Yuan, increasing by 10.28 percent year on year; the total operating revenue was RMB365.216 billion Yuan, increasing by 17.17 percent year on year.

Statistics shows that in the first quarter, China's vehicle production and sales volume was 4.8958 million and 4.9838 million, increasing by 7.48 percent and 8.08 percent than the same period of last year.

The growth of vehicle production and sales slowed down markedly in the first quarter, representing that the structural adjustment and development mode transformation have achieved notable results. Environment, resource and energy pressure caused by the sharp increase of production and sales in the past two years requested China's vehicle industry to advance structural adjustment and transform development mode urgently.

The growth of China's vehicle production and sales in the first quarter was below expectation, and it is unlikely to achieve previously anticipated growth rate this year. In addition, the increase of economic benefits also declined along with the growth drop of production and sales volume, which is contrary to the industrial expectation.

To China's vehicle industry, if enterprises reinforce the transformation of development mode, it should lead to lower growth rate but higher benefits. However, the current condition shows that the growth slow-down was caused by external factors and had nothing to do with enterprises' own development. Therefore, we suggest the whole industry should calm down, re-examine development plan, pay attention to the transformation of development mode, think high of efficiency, and reduce cost and improve benefits by strengthening management.