Automobile sales in China rose 8.16 percent to 1.79 million in November compared to the same month of the previous year, according to the latest numbers released by the China Association of Automobile Manufacturers (CAAM). Total sales in the first 11 months of 2012 were 17.49 million units with an increase of 4.03 percent year-on-year.
The modest growth was contributed by passenger car and SUV sales, up 6.24and 26.26 percent respectively. Sales of MPVs and microvans in the first 11 months, however, were both slightly down.
Although commercial vehicle sales saw a rise of 5.59 percent in November over the previous month, total sales in the first 11 months declined 6.77 percent year-on-year.
Based on these numbers, CBU believes that total automobile sales in 2012 would be around 19.3 million units, with an annual growth rate of at most 5 percent.
A number of factors dictate that December sales, despite traditional practice of automakers to jack up end-of-year output and wholesale numbers, would remain at the November level.
The number of working days in December is less by two compared to last December. As Chinese New Year will be in early February 2013, Spring Festival holiday sales may not start soon. These will affect both output and market demand in December.
By now manufacturers and dealers have mostly come to terms with the understanding that explosive market growth seen in the past 10 years has come to an end. Moderate single-digit growth would be a fact of life. And considering high dealer inventories and reduced dealer profit so far this year, manufacturers are unable to push up too much production in the remainder of the year or forces inventories to their dealers.
Sales of Japanese brands assembled in China will not recover to even near their previous market-share levels before the Sino-Japanese island disputes. If anything, the potential political and territorial conflict between the two countries would only exacerbate the current situation.
In the commercial vehicle sector, December will not see any increase in demand for trucks, especially heavy-duty trucks and tractor trailers. Total commercial vehicle sales in the whole year are expected to be down around 7-8 percent.