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Jan auto sales robust, 1Q forcast optimistic

By Cai Muyuan (chinadaily.com.cn)
Updated: 2010-02-25 15:59

China's vehicle production and sales continued their strong momentum in January. Sales growth is expected to top 15 percent this year, with rapid increases in the first half and a slowdown in the second, according to Shanghai Securities News.

Domestic auto production reached 1.61 million units in January, an increase of 5.04 percent from December and up 143 percent year-on-year, while auto sales reached 1.66 million units, an increase of 16.83 percent from December and up 124 percent from the same month last year, according to the China Association of Automobile Manufacturers (CAAM).

The robust sales can be attributed to several factors, according to the newspaper.

First, some domestic carmakers delayed the confirmation of their December sales. Data showed that 110,000 more units were produced than sold in December when most manufacturers could not finish their orders. So the sales of those cars were not confirmed until January. That would explain January's sales figures being 50,000 units higher than the production numbers.

Second, car dealers replenished stock by about 50,000 units in January, which also contributed to the sales, according to the newspaper.

Third, the time ahead of Spring Festival is usually considered a good selling season for vehicles. Under such circumstances, at least 150,000 units in January sales were "abnormal," the newspaper said.

Most car models saw sales growth from December, except for large- and mid-sized buses. January sales increased by 20 percent for multi-purpose vehicles, light buses, heavy trucks and mini trucks. Sales for all car models were up about 80 percent year-on-year because of a sluggish market in January 2009.

As sales picked up in February last year, the year-on-year increase in sales will slow down in February, according to the newspaper.

March sales, usually among the best of the year, are expected to rise significantly from last year, and profits should rise more than 100 percent year-on-year in the first quarter, predicted the newspaper.

The export of entire cars, parts and components is still on the road to recovery. In January, China exported 37,700 vehicles, up 105 percent year-on-year and down 24 percent from the previous month. In December, the export of auto parts, components and body amounted to $1.67 billion, up 16 percent from the previous month and up 30 percent from the same month of last year. The export of tires for automobiles and motorcycles amounted to $713 million in December, an increase of 12 percent and 52 percent year-on-year.

According to the statistics released by CAAM on the 17 key auto enterprises, which account for 50 percent of the industry, the income of these enterprises in 2009 reached 1.51 trillion yuan, up 30 percent year-on-year, while their total profits hit 1.17 trillion yuan, an increase of 82 percent year-on-year. The industry added value hit 308 billion yuan, a 36 percent surge in one year.