What's new

China Auto Sales Growth Lags U.S. For First Time in 14 Years

Roybot

BANNED
Dec 14, 2010
20,064
-2
44,859
Country
India
Location
Australia
Jan. 12 (Bloomberg) -- China’s auto sales slowed last year, trailing growth in the U.S. for the first time in at least 14 years, after the government ended stimulus measures and as the nation’s economic expansion showed signs of easing.

Total vehicle sales, which include cars, trucks and buses, rose 2.5 percent to 18.5 million, according to data released by the China Association of Automobile Manufacturers today, compared with the 3 percent median estimate of five analysts surveyed by Bloomberg. The country remained the world’s biggest vehicle market for a third straight year, with demand projected to grow about 8 percent this year, the industry group said.

Delivery growth slowed from the 32 percent rate in 2010, after China withdrew a two-year package of tax breaks and rebates that helped the country overtake the U.S. Higher interest rates and restrictions on new vehicles in Beijing also deterred purchases, adding to supply disruptions that sent Honda Motor Co. to its first sales decline in the country.

“China’s auto sales growth won’t reach anywhere near the past couple of years as it scales back to a more sustainable pace,” said Jenny Gu, an analyst at industry researcher LMC Automotive in Shanghai. “The past few years were boosted by government incentives.”

Passenger-car deliveries rose 5.2 percent to 14.5 million, slowing from the 33 percent growth in 2010, according to data from the automakers association. Commercial vehicle sales, a category that includes buses and trucks, fell 6.3 percent to 4.03 million units.

Congestion, Pollution

Traffic congestion and worsening pollution prompted Beijing’s municipal government to impose a quota on new vehicles last year and distribute license plates through a monthly lottery.

More cities are expected to introduce measures limiting vehicle purchases and driving, Shi Jianhua, deputy secretary general of the industry group, said at a briefing in Beijing. A slowdown in fixed-asset investment may undermine demand for commercial vehicles, he said.

Local automakers saw the biggest drop in sales last year, the association said in today’s statement. Among domestic manufacturers, Chongqing Changan Automobile Co., BYD Co., and Chery Automobile Co. reported sales declines.

China vs U.S.

Sales growth in China outpaced the U.S. every year before 2011, according to data from the association stretching back to 1998. U.S. light-vehicle sales climbed 10 percent, or almost 1.19 million, to 12.8 million in 2011, according to researcher Autodata Corp. U.S. deliveries may rise about 5.6 percent this year to 13.5 million, the average estimate of 10 analysts surveyed by Bloomberg.

The rebound in U.S. auto demand is a reversal from 2009, when industry sales plunged to the lowest in more than a quarter century, pushing General Motors Co. and Auburn Hills, Michigan- based Chrysler into bankruptcy along with dozens of their suppliers.

Toyota Motor Corp., Asia’s largest carmaker, said last week that China sales rose last year at the slowest pace since at least 2004, increasing 4 percent to 883,000 vehicles. Tokyo- based Honda reported its first annual sales decline in China this week, with deliveries falling 4.5 percent in 2011 to 617,764, as Japan’s strongest earthquake in March and flooding in Thailand disrupted production.

Production Overcapacity

Last month, China said it will end a seven-year policy to encourage foreign investment in the automotive manufacturing industry on Jan. 30 to allow for “healthy development.” The announcement comes two weeks after the country said it would impose anti-dumping duties on some vehicles imported from the U.S. after failing to block a U.S. tariff on Chinese tires.

Overcapacity in China’s automaking industry emerged in 2011 and will probably worsen every year through 2015, Mizuho Securities Asia Ltd. said in a Dec. 30 report. Auto production capacity in the country will probably rise 15 percent in 2012 and 20 percent in 2013, outpacing the estimated 4 percent annual increase in demand, according to the report.

China Auto Sales Growth Lags U.S. For First Time in 14 Years - Businessweek

From 32% growth down to 2.5% thats quite the slowdown :cheesy:
 
it shows how government policies can work in China,very effective.in Beijing,the biggest car market in China,you have to get a number through lottery like system to be able to buy a car,a lucky draw and you might never be lucky to get the number,haha,and even you are lucky enough to get that permission number,one day in each week you can not drive,based on the last digit of your number plate,mine is 6,so I can't drive on every wednsday.
 
This means the Chinese auto market is starting to get saturated.

Because China is so populated, therefore we can't have the same per capita of car like US.
 
it shows how government policies can work in China,very effective.in Beijing,the biggest car market in China,you have to get a number through lottery like system to be able to buy a car,a lucky draw and you might never be lucky to get the number,haha,and even you are lucky enough to get that permission number,one day in each week you can not drive,based on the last digit of your number plate,mine is 6,so I can't drive on every wednsday.

So you are saying that the slowdown is because the Communist party of China is not allowing people to buy cars?:undecided:
 
most city dwellers in China can afford a car,but the roads can never keep up with the crazy increase of cars,that's why the government put a lot of restriction on car comsuption.Beijing has many restrictions on cars,but still Beijing has 4.5 million cars,Beijing is becoming the city having most cars in the world and traffic is the scourage of the city.

---------- Post added at 10:20 AM ---------- Previous post was at 10:19 AM ----------

So you are saying that the slowdown is because the Communist party of China is not allowing people to buy cars?:undecided:

yes,and it is not uncommon as you think,in Hongkong and Singapore they do the same,it has nothing to do with communism.sometimes you have to do something to save the city.

---------- Post added at 10:23 AM ---------- Previous post was at 10:20 AM ----------

no one like this,I rarely drive in Beijing,I can never beat the traffic.
0473F3DF.jpg
 
北京机动车数量下月达500万辆 限购少增61.7万-搜狐新闻

the number of cars is reaching 5 million in Beijing next month,policy restrictions slowed down the increase of cars by 617,000.

this new policy really worked i guess.
 
yes,and it is not uncommon as you think,in Hongkong and Singapore they do the same,it has nothing to do with communism.sometimes you have to do something to save the city.


I find it hard to believe that the Chinese authorities would take such a drastic step to bring down the growth from 32% to 2.5%. How come there is no mention of this so called ban on buying vehicles?
 
not totally banning,but you have to apply to take a draw to get a permission number first to buy a car,I already have a car so i m very happy with this new policy,it helps to ease the traffic problems.many developed countries did this before,China is not the only one.you dont know this part of the story shows you should take western media with a pinch of salt all the time.
 
So you are saying that the slowdown is because the Communist party of China is not allowing people to buy cars?:undecided:

It is local governement's decision. For instance, Beijing government spend a lot of money subsidizing public transportations and build subways like crazy. (Metro fare in Beijing $0.30). In turn, it has quota on personal car ownership so buying new cars in Beijing is more and more difficult. As to my city, which is so called "China's Destroit", you can buy as many as you can afford.

The market also saturates. 10 years ago, only rich people own cars now pretty much everyone I know owns cars. My brother didn't own ca ar 10 years ago and now he has two. My father passed the driving test and it took us some efforts to convince him driving in his age will make him a road killer so he gave up. :P

Giving these two factors it is not surprising that the growth stablized.
 
not totally banning,but you have to apply to take a draw to get a permission number first to buy a car,I already have a car so i m very happy with this new policy,it helps to ease the traffic problems.many developed countries did this before,China is not the only one.

Odd, I was just reading how the Chinese government has decided to reduce vehicle tax by about 85%. One hand you say the government is discouraging people from buying car, and then they give incentives like reduced tax, pretty strange thing to do?
 
Want a new car in Beijing? Sorry, there's just too much traffic.

China banned all car sales in Beijing from Dec. 24 until its new lottery system comes up with the names of the 20,000 applicants who will have the right to buy license plates this month.

By Peter Ford, Staff Writer / January 5, 2011

Beijing

Li Wen’s Citroen car showroom was silent and deserted Wednesday, save for clumps of bored salesmen in red and blue anoraks with nothing to do.

In Pictures: China's huge traffic jam



Two weeks earlier, Mr. Li recalls, “it was packed. We were open till 3 in the morning, there were 200 people in here, and all customers could do was say whether they wanted a car or not. It took 10 minutes to sell a car that night. There was no bargaining.”

Since then, Li has not sold a single vehicle at any of the four dealerships he runs. Like every other automobile dealer in Beijing, he knows he won’t see another client for another three weeks, thanks to drastic new government rules designed to get a grip on the city’s increasingly appalling traffic.


In 2009, China overtook the US to become the world's largest consumer of cars and it's still growing rapidly. The number of cars on Beijing’s roads has nearly doubled in the past five years, making driving in the city center at almost any hour a nightmare.

The government banned all car sales in the capital from Dec. 24 until its new lottery system comes up with the names of the 20,000 lucky applicants who will have the right to buy license plates this month.

One hundred thousand wannabe car owners have so far put their names in the drawing, to be announced on Jan. 26.

The lottery system will authorize the purchase of 240,000 cars this year. Another 160,000 are expected to be bought by customers who have their existing cars destroyed, or who sell their vehicles to used car dealers – they will be allowed to keep their plates and will be exempt from the lottery.

“All in all we expect car sales in Beijing to drop this year by 50 percent from 2010,” when sales totaled about 850,000, says Li.

Announcing the new rules last month, the deputy head of Beijing’s municipal government, Zhou Zhengyu, acknowledged that “traffic management has not been able to keep pace” with the rising number of private cars on the roads, and that “rush hour traffic jams have become a major problem in certain areas.”

Even some would-be car buyers with only a slim chance of winning the lottery say they agree with the restrictions.

“The government should have done this 10 years ago,” says Wang Xinyan, a sales clerk, as her husband filled out the form to enter this month’s lottery at a government office. “It’s a bit late now, and it’s hard to say what the impact will be.”

Li, who accepts that his dealerships have contributed to there being “way too many cars in Beijing”, hopes that the new license plate limitations “will give the government two or three years to improve public transport.” The discomfort of traveling on Beijing’s slow and overcrowded buses, and its still skeletal metro network, has encouraged many to drive their cars to work despite the congestion they contribute to and suffer from.

The new regulations also increase parking fees in Beijing, and ban cars with out-of-city plates from driving in the city at rush hours. That rule is not aimed at visiting drivers, who are scarcely a problem; it is designed to stop Beijingers trying to get around the restrictions by buying their cars and plates in neighboring provinces, where there are no limits on vehicle sales.
 
Odd, I was just reading how the Chinese government has decided to reduce vehicle tax by about 85%. One hand you say the government is discouraging people from buying car, and then they give incentives like reduced tax, pretty strange thing to do?

Two different things, tax reduction is from central government. Whether to encourage car sales or not is each city's business.
 
you dont know nothing about China,I live here.so when commenting about China,do your homework first,dont make yourself look very ignorant.

---------- Post added at 10:43 AM ---------- Previous post was at 10:41 AM ----------

Beijing is the biggest car market in China,one tenth of the nation's private car sale market.
 
Two different things, tax reduction is from central government. Whether to encourage car sales or not is each city's business.

But it says the tax cut is to tackle the slowdown in sales. So it all seems counterproductive? I mean if they wanted to improve the growth rate why not just direct the city governments to allow people to buy cars.
 
Then should China use this time to further upgrade and expand its road-bridge infrastructure for future traffic?
 

Users Who Are Viewing This Thread (Total: 2, Members: 0, Guests: 2)


Pakistan Defence Latest Posts

Back
Top Bottom