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May vehicle sales cooling down
By Gong Zhengzheng (China Daily)
Updated: 2004-06-16 08:50
Vehicle sales in China continued to cool in May from the previous month, in
contrast to the hot Beijing International Motor Show, which closes today.
Total sales of domestically-made vehicles dropped by 20.43 per cent
month-on-month to 396,200 units in May, statistics from the China Association of
Automobile Manufacturers (CAAM) show.
This is the second consecutive slow down in two months. Sales declined by
8.24 per cent in April from March.
Sales of trucks tumbled by 25.22 per cent to 115,000 units in May, the
biggest decrease among the three main categories of vehicles, according to
statistics.
Sales of passenger cars and buses amounted to 177,700 units and 103,500 units
last month, down 19.27 per cent and 16.55 per cent from April respectively.
"The comedown was mainly generated by the week-long Labour Day holiday, the
government's tightening economic measures and price wars in the domestic car
market," said Zhu Yiping, a spokeswoman for CAAM.
The government controls on fixed asset investment have affected truck sales
heavily, Zhu said.
Price wars between producers and government policies, such as controls on car
loans by banks, are the two biggest factors curbing car sales, said Jia
Xinguang, chief analyst with the China National Automotive Industry Consulting
and Development Corp.
"Price cuts are so frequent that many customers expect further declines and
have postponed buying cars," Jia said.
Earlier this month, Nissan's joint venture with Dongfeng Motor Corp cut
prices of the Bluebird and Sunny sedans by up to 20,000 yuan (US$2,410).
General Motors' joint venture in Shanghai last month slashed prices of the
Buick Regal and Excelle sedans by 20,000-40,000 yuan (US$2,410-4,820).
"The market conditions will possibly be tougher at the end of this year
thanks to China's removal of quota and further tariff cuts on auto imports next
year," Jia said.
The nation will slash tariffs to 30 per cent next year from 34.2-37.6 per
cent this year, in line with its commitments to the World Trade Organization.
The tariffs will be further declined to 25 per cent at the middle of 2006.
"We could not expect the domestic car market to continue to grow at the
explosive rate seen in the past two years," said Miao Wei, president of
Dongfeng.
"Customers have more choices (with more new product launches). It's an
pressing task for manufacturers to study their demands to make them faithful to
our brands."
However, Zhu said vehicle sales are expected to rebound from June.
"Conditions will be better in the second half of this year and our forecasts
on vehicle output for the full year could be exceeded," she said.
CAAM predicted at the beginning of this year that the full-year vehicle
output will reach 5.5 to 5.62 million units, up from 4.44 million units last
year.
Total vehicle output in China increased by 28.09 per cent year-on-year to
2.26 million units during the first five months of this year, statistics show.
Total sales of China-made vehicles reached 2.17 million units between January
and May, up 27.57 per cent from a year ago.
Passenger car sales grew by 37.68 per cent year-on-year to 964,700 units
during the first five months of this year.
First Automotive Works Corp (FAW), China's No 1 automaker, sold 378,900
vehicles during the period, up 14.52 per cent.
Combined sales of the nation's top five automakers - FAW, Dongfeng, Shanghai
Automotive Industry Corp, Chang'an Motor Corp and Beijing Automotive Industry
Holdings Corp - reached 1.42 million units during the period, accounting for
65.17 per cent of total vehicle sales.
The proportion was down from 65.21 per cent in the first four months of
this year.
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