BEIJING: Auto sales in China are set to cool in 2011 after surging by a third to a record high in 2010 as rising fuel prices, the removal of subsidies and tighter rules on new car registrations temper demand in the world's largest car market, according to a Reuters report on Monday, Jan 10.
In December alone, automakers in the country shipped 1.3 million sedans, sport utility vehicles and multi-purpose vehicles to dealers, but they still couldn't keep up with demand.
"Small cars were selling like hot cakes in recent weeks as people wanted to take advantage of the incentives before it was too late," said Meng Yi, a Chevrolet dealer based in Shanghai.
"Instead of getting any year-end bargain deals, people were actually paying full price upfront and getting the cars months later as many models were out of stock a while ago."
Beijing issued a massive package of stimulus measures at the height of the global financial crisis in 2009, including tax incentives for cars with engine sizes 1.6 litres or smaller and rebates for farmers who traded in old vehicles for fuel-efficient models.
The incentives were scaled back in 2010 and mostly scrapped this year.
"Monthly sales will most likely fall in the first half because small cars account for 60 percent of the market volume. The impact on the mini vehicle segment can't be ignored now that they've taken away the subsidies," said John Zeng, an analyst with J.D. Power Asia Pacific.
The Beijing city government's recent move to impose quotas on new car registrations and possible similar moves by other big cities to tackle traffic gridlock as well as further hikes in fuel prices will also apply the brakes to the market, industry observers said.
Still, industry insiders say car sales in China will continue to grow for the full year because of rising income levels and the low level of car ownership in small, inland areas. In 2010, a total of 13.8 million passenger cars were sold in China, the China Association of Automobile Manufacturers (CAAM) said on Monday. Overall vehicles, including trucks and buses, came to 18.1 million units during the period, up 32.4 percent, it said. By comparison,, U.S. auto sales rose more than 11 percent in 2010 to nearly 11.6 million vehicles, snapping a four-year slide that had forced two of Detroit's Big Three automakers into government-directed bankruptcies. [ID:nN04134889]
''
''
WINNERS AND LOSERS
Local brands will bear the brunt of policy change, especially the termination of tax incentives, as they dominate the small car segment, analysts say. Mid-size cars, mostly carrying a foreign brand, might get a lift as compact cars are less appealing now without the incentives.
Models which had disappeared from the top ten best sellers' list in 2010, such as Toyota Motor's Camry, could make a come-back next year, analysts say.
Of all the foreign automakers operating in China, General Motors , remains the industry champion with an annual tally of 2.4 million cars and light commercial vehicles.
Close rival Volkswagen , which makes only cars in the country, sold 1.9 million units, including almost 228,000 Audi brand models.
Hyundai Motor and partner Kia Motor moved about 1 million vehicles, as did Japan's Nissan Motor .
Sales of Ford Motor , a relatively late comer to China, jumped 40 percent, the fastest among all foreign automakers.
"Ford seemed to be rather cautious in the past. But it was very aggressive last year and added 100 or so new dealers in the country," said Sheng Ye, associate research director for Ipsos' Greater China region.
Despite making the best-selling F3 model, BYD , backed by U.S. billionaire Warren Buffett, missed its sales target. [ID:nTOE6BI00Q]
Toyota Motor and Honda Motor , hurt by recurring labour disputes at their suppliers, reported a 19 percent and 12.2 percent gain respectively. Massive global recalls also tarnished Toyota's once impeccable reputation for quality and hurt its sales in the country.
With or without tax incentives, China's auto market, will return to a slower but more rational growth pattern sooner or later, as breakneck growth was not sustainable, industry insiders say.
"The market loves explosive sales growth and we love it too, but it's a marathon not a 100-metre race," Hu Maoyuan, chairman of top Chinese automaker and GM's main China partner SAIC Motor Corp told a shareholders meeting late last.
Most analysts and auto executives are expecting industry-wide sales to rise 10-15 percent. ($1=6.629 Yuan)
In December alone, automakers in the country shipped 1.3 million sedans, sport utility vehicles and multi-purpose vehicles to dealers, but they still couldn't keep up with demand.
"Small cars were selling like hot cakes in recent weeks as people wanted to take advantage of the incentives before it was too late," said Meng Yi, a Chevrolet dealer based in Shanghai.
"Instead of getting any year-end bargain deals, people were actually paying full price upfront and getting the cars months later as many models were out of stock a while ago."
Beijing issued a massive package of stimulus measures at the height of the global financial crisis in 2009, including tax incentives for cars with engine sizes 1.6 litres or smaller and rebates for farmers who traded in old vehicles for fuel-efficient models.
The incentives were scaled back in 2010 and mostly scrapped this year.
"Monthly sales will most likely fall in the first half because small cars account for 60 percent of the market volume. The impact on the mini vehicle segment can't be ignored now that they've taken away the subsidies," said John Zeng, an analyst with J.D. Power Asia Pacific.
The Beijing city government's recent move to impose quotas on new car registrations and possible similar moves by other big cities to tackle traffic gridlock as well as further hikes in fuel prices will also apply the brakes to the market, industry observers said.
Still, industry insiders say car sales in China will continue to grow for the full year because of rising income levels and the low level of car ownership in small, inland areas. In 2010, a total of 13.8 million passenger cars were sold in China, the China Association of Automobile Manufacturers (CAAM) said on Monday. Overall vehicles, including trucks and buses, came to 18.1 million units during the period, up 32.4 percent, it said. By comparison,, U.S. auto sales rose more than 11 percent in 2010 to nearly 11.6 million vehicles, snapping a four-year slide that had forced two of Detroit's Big Three automakers into government-directed bankruptcies. [ID:nN04134889]
''
''
WINNERS AND LOSERS
Local brands will bear the brunt of policy change, especially the termination of tax incentives, as they dominate the small car segment, analysts say. Mid-size cars, mostly carrying a foreign brand, might get a lift as compact cars are less appealing now without the incentives.
Models which had disappeared from the top ten best sellers' list in 2010, such as Toyota Motor's Camry, could make a come-back next year, analysts say.
Of all the foreign automakers operating in China, General Motors , remains the industry champion with an annual tally of 2.4 million cars and light commercial vehicles.
Close rival Volkswagen , which makes only cars in the country, sold 1.9 million units, including almost 228,000 Audi brand models.
Hyundai Motor and partner Kia Motor moved about 1 million vehicles, as did Japan's Nissan Motor .
Sales of Ford Motor , a relatively late comer to China, jumped 40 percent, the fastest among all foreign automakers.
"Ford seemed to be rather cautious in the past. But it was very aggressive last year and added 100 or so new dealers in the country," said Sheng Ye, associate research director for Ipsos' Greater China region.
Despite making the best-selling F3 model, BYD , backed by U.S. billionaire Warren Buffett, missed its sales target. [ID:nTOE6BI00Q]
Toyota Motor and Honda Motor , hurt by recurring labour disputes at their suppliers, reported a 19 percent and 12.2 percent gain respectively. Massive global recalls also tarnished Toyota's once impeccable reputation for quality and hurt its sales in the country.
With or without tax incentives, China's auto market, will return to a slower but more rational growth pattern sooner or later, as breakneck growth was not sustainable, industry insiders say.
"The market loves explosive sales growth and we love it too, but it's a marathon not a 100-metre race," Hu Maoyuan, chairman of top Chinese automaker and GM's main China partner SAIC Motor Corp told a shareholders meeting late last.
Most analysts and auto executives are expecting industry-wide sales to rise 10-15 percent. ($1=6.629 Yuan)
No comments:
Post a Comment