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Chinese passenger car sales growth of 10.9% year-on-year in June, the lowest in 14 months, suggests BMI's expectation of a slowdown in the rapid growth of previous years is playing out. Data from the China Automotive Technology & Research Centre (CATRC) show that sales were a shadow of the 34% and 25% rises recorded in April and May respectively. The numbers also revealed that several carmakers underestimated the cooling growth in the market and missed their sales targets for H110. Moreover, we expect sales in H210 will be impacted by the government's contradictory policy of offering incentives on car purchases while also implementing monetary tightening measures. Bank lending, for one, will be restricted in the coming months, owing to the fact that 45% of the government's CNY7.5bn loan quota for 2010 was already used up by April.
Opportunities come in the form of China's green car strategy, with the ministry of finance unveiling its pilot subsidy programme, which has been rolled out in five major cities. Despite the government's efforts to encourage the production and use of 'clean energy' vehicles, in line with BMI's view that government support in the alternative fuel segment will gather momentum globally, the establishment of an incentive programme has been a long time coming and should provide more certainty for companies to plan around. More importantly in BMI's view, the government will also fund the construction of charging stations and battery swapping networks in the five cities, which are all headquarter cities of the country's major carmakers.
Nevertheless, China stays in second place in BMI's Business Environment Ratings for the autos sector in Asia Pacific with a score of 67.7 out of a possible 100. The market's highest scores are still for its production and sales growth potential, based on BMI's forecasts up to 2014, although we do expect a slowdown in growth. However, even though a low level of vehicle ownership can look tempting in terms of possible growth, the low score for country structure (caused by the large gap that exists between wealthy towns and poorer rural areas) acts as a clear restriction on potential penetration. In terms of China's macroeconomic environment, a healthy long-term political and economic outlook ensures strong scores for Country Risk.
Carmakers are still attracted by the country's potential and growing global significance. VW has announced plans to open a new production plant in China in 2013, as part of its goal to become the world's leading carmaker by 2018. VW has another incentive to succeed in China, namely its battle with US rival General Motors Company for market leadership. VW took the top two positions in 2009 through its Shanghai VW and FAW-VW JVs, ahead of Shanghai GM. However, GM is equally keen to gain some ground in China and plans to launch 25 new or revamped models by the end of 2011.
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Original Source: China Autos Market
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Chinese passenger car sales growth of 10.9% year-on-year in June, the lowest in 14 months, suggests BMI's expectation of a slowdown in the rapid growth of previous years is playing out. Data from the China Automotive Technology & Research Centre (CATRC) show that sales were a shadow of the 34% and 25% rises recorded in April and May respectively. The numbers also revealed that several carmakers underestimated the cooling growth in the market and missed their sales targets for H110. Moreover, we expect sales in H210 will be impacted by the government's contradictory policy of offering incentives on car purchases while also implementing monetary tightening measures. Bank lending, for one, will be restricted in the coming months, owing to the fact that 45% of the government's CNY7.5bn loan quota for 2010 was already used up by April.
Opportunities come in the form of China's green car strategy, with the ministry of finance unveiling its pilot subsidy programme, which has been rolled out in five major cities. Despite the government's efforts to encourage the production and use of 'clean energy' vehicles, in line with BMI's view that government support in the alternative fuel segment will gather momentum globally, the establishment of an incentive programme has been a long time coming and should provide more certainty for companies to plan around. More importantly in BMI's view, the government will also fund the construction of charging stations and battery swapping networks in the five cities, which are all headquarter cities of the country's major carmakers.
Nevertheless, China stays in second place in BMI's Business Environment Ratings for the autos sector in Asia Pacific with a score of 67.7 out of a possible 100. The market's highest scores are still for its production and sales growth potential, based on BMI's forecasts up to 2014, although we do expect a slowdown in growth. However, even though a low level of vehicle ownership can look tempting in terms of possible growth, the low score for country structure (caused by the large gap that exists between wealthy towns and poorer rural areas) acts as a clear restriction on potential penetration. In terms of China's macroeconomic environment, a healthy long-term political and economic outlook ensures strong scores for Country Risk.
Carmakers are still attracted by the country's potential and growing global significance. VW has announced plans to open a new production plant in China in 2013, as part of its goal to become the world's leading carmaker by 2018. VW has another incentive to succeed in China, namely its battle with US rival General Motors Company for market leadership. VW took the top two positions in 2009 through its Shanghai VW and FAW-VW JVs, ahead of Shanghai GM. However, GM is equally keen to gain some ground in China and plans to launch 25 new or revamped models by the end of 2011.
About Us
ReportsandReports comprises an online library of 10,000 reports, in-depth market research studies of over 5000 micro markets, and 25 industry specific websites. Our client list boasts almost all well-known publishers of such reports across the globe. We as a third-party reseller of market research reports employ a number of marketing tools, such as press releases, email-marketing and effective search-engine optimization techniques to drive revenues for our clients. We also provide 24/7 online and offline support service to our customers.
Contact:
Ms. Sunita
7557 Rambler road,
Suite 727, Dallas, TX 75231
Tel: +1-888-989-8004
http://reportsandreports.blogspot.com/
http://reportsandreports.proarticles.co.uk/
http://reportsnreports.wordpress.com/
Original Source: China Autos Market
Buy Now : Market Research Report
