Tough time seen ahead for auto market
Despite a small increase in auto production and sales in the first half of 2012, the market prospects are not so good for the second half of the year, an industry association said Wednesday.
In the first half of 2012, China's production of cars increased 4.08 percent year-on-year to 9.53 million units, and the sales volume rose 2.93 percent year-on-year to 9.60 million units, the China Association of Automobile Manufacturers (CAAM) said at a press conference Wednesday.
However, the data for June showed a month-on-month decline. The production amounted to 1.53 million cars in June, an increase of 9.09 percent year-on-year but 2.37 percent lower compared with May. The nationwide sales volume amounted to 1.58 million units, up 9.86 percent year-on-year but down 1.66 percent month-on-month.
"This is mainly caused by seasonal factors, as sales always decline from April to August and peak in September and October," Jia Xinguang, an independent auto analyst, told the Global Times Wednesday.
"The weak performance was a result of the sluggish economy. Auto manufacturers and dealers that are burdened by large inventories and capital pressure offered promotions, but the unstable prices led consumers to take a wait-and-see attitude," Su Hui, vice president of the auto market division of the China Automobile Dealers Association, told the Global Times Wednesday.
There have been rumors of new stimulus policies for the auto sector, but the only one confirmed so far has been the 6 billion yuan subsidy for energy-saving and new-energy vehicles, which can not boost the whole sector, Su said.
Guangzhou became the fourth city after Beijing, Shanghai and Guiyang to carry out a quota system for auto license plates on June 30. It will issue just 10,000 new license plates per month, or 120,000 annually, less than half the number issued in 2011.
The CAAM analysts expressed concern that more cities would follow suit, which would be a heavy blow for the auto sector, but Su said that "consumers in other traffic-clogged cities may speed up their purchases because of this concern, which would stimulate auto sales in the short run."
However, as the economy is facing downward pressure and without any stimulus policy for the whole sector, the second half will be tough for auto makers and dealers, Su said.
In June, 499,400 domestic brand passenger cars were sold, accounting for 38.89 percent of total sales, down 1.36 percentage points from May and much lower than the highest level of 50.6 percent recorded in February 2010, the CAAM said.
Domestic brands have enhanced their competitiveness, but still lag behind foreign brands, the CAAM said.
The market situation will further worsen for domestic car brands in the next two to three years and about half of them may close, said Dong Yang, secretary-general of the CAAM.
Dong noted that domestic auto firms need to put more efforts into specializing in certain areas and cooperating with each other to pull through.
More domestic brands are expanding into overseas markets and China's auto exports increased 28 percent year-on-year to 487,900 in the first half of 2012.
However, the data for June showed a month-on-month decline. The production amounted to 1.53 million cars in June, an increase of 9.09 percent year-on-year but 2.37 percent lower compared with May. The nationwide sales volume amounted to 1.58 million units, up 9.86 percent year-on-year but down 1.66 percent month-on-month.
"This is mainly caused by seasonal factors, as sales always decline from April to August and peak in September and October," Jia Xinguang, an independent auto analyst, told the Global Times Wednesday.
"The weak performance was a result of the sluggish economy. Auto manufacturers and dealers that are burdened by large inventories and capital pressure offered promotions, but the unstable prices led consumers to take a wait-and-see attitude," Su Hui, vice president of the auto market division of the China Automobile Dealers Association, told the Global Times Wednesday.
There have been rumors of new stimulus policies for the auto sector, but the only one confirmed so far has been the 6 billion yuan subsidy for energy-saving and new-energy vehicles, which can not boost the whole sector, Su said.
Guangzhou became the fourth city after Beijing, Shanghai and Guiyang to carry out a quota system for auto license plates on June 30. It will issue just 10,000 new license plates per month, or 120,000 annually, less than half the number issued in 2011.
The CAAM analysts expressed concern that more cities would follow suit, which would be a heavy blow for the auto sector, but Su said that "consumers in other traffic-clogged cities may speed up their purchases because of this concern, which would stimulate auto sales in the short run."
However, as the economy is facing downward pressure and without any stimulus policy for the whole sector, the second half will be tough for auto makers and dealers, Su said.
In June, 499,400 domestic brand passenger cars were sold, accounting for 38.89 percent of total sales, down 1.36 percentage points from May and much lower than the highest level of 50.6 percent recorded in February 2010, the CAAM said.
Domestic brands have enhanced their competitiveness, but still lag behind foreign brands, the CAAM said.
The market situation will further worsen for domestic car brands in the next two to three years and about half of them may close, said Dong Yang, secretary-general of the CAAM.
Dong noted that domestic auto firms need to put more efforts into specializing in certain areas and cooperating with each other to pull through.
More domestic brands are expanding into overseas markets and China's auto exports increased 28 percent year-on-year to 487,900 in the first half of 2012.
