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With first quarter in the negative, sluggish second expected

As expected, China’s automobile output and sales in the first quarter of 2012 declined compared with the same period in 2011.

According to the latest statistics released by China Association of Automobile Manufacturers (CAAM) and China Passenger Car Association (CPCA), China made 4.78 million automobiles in January-March, down 1.8 percent year-on-year. Sales were down 3.4 percent, to a total of 4.79 million.

Passenger vehicle sales were down 1.25 percent to a total of 3.77 million and commercial vehicle sales were down 10.6 percent, to a total of 1.02 million.

Daily average sales of passenger vehicles in the first 10 days of April were down about 20 percent compared to the first 10 days in March, according to analysts with CPCA. The recent rise in gasoline price and fewer number of work days in April will affect market demand. The effective number of work days in April will be 19, one day less than last April and four days less than in March. Even with a predicted rise in sales before the May Day holidays, said CPCA secretary-general Rao Da, “PV sales in April are expected to decline by as much as 15 percent from March.”

Looking back on the monthly sales performance of the automobile market since 2005, March has been consistently the 2nd highest month after December. Monthly sales were consistently on a declining trend from April through July, except for the unusual year in 2009, before picking up again starting in August.

This means that despite the coming of spring, China’s auto market in the 2nd quarter of 2012 may continue to face sluggish demand. CPCA analyst Cui Dongshu warns that if the automotive sector lacks policy support from the government, “the current manufacturing structure sustained by joint venture profit may very well collapse.”

But the harsh fact is that the central government can no longer pump in another ¥4 trillion ($635 billion), like it did in 2009 and 2010, in propping up the automotive industry.

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