Mainland carmakers record sales rebound
Mainland car sales returned to positive growth last month after a slight contraction in May, preliminary data shows.
Carmakers' wholesale shipments of passenger cars rose 5.5 per cent from a year earlier to 1.105 million units, according to unofficial figures published yesterday by the Shanghai-based China Passenger Car Association (CPCA).
While still far below the double-digit stimulus-driven growth seen in the past two years, the modest increase seen last month represents a rebound from May, when sales dipped for the first time in two years, contracting 0.11 per cent on an annual basis.
Moreover, the 5.5 per cent growth comes as the car industry continues to struggle with supply chain disruptions stemming from the March 11 earthquake and tsunami in Japan. That has compounded the effect of weak demand that has prevailed since the January 1 expiration of tax rebates and other government incentives for car buyers.
Official car sales figures are typically published a few days later by the China Association of Automobile Manufacturers (CAAM), but the preliminary CPCA figures have had an average margin-of-error of less than 0.5 per cent over the past 12 months.
In the first six months, mainland passenger car sales grew at a tepid 6.2 per cent pace, rising to 7.13 million units from 6.72 million a year earlier. That represents a dramatic slowdown from last year's 33.2 per cent growth and a stunning 52.9 per cent increase in 2009 - two years where sales were kick-started by government incentives to buy new cars.
Sales in the first half of this year grew even at a slower pace than the 7.3 per cent growth rate in 2008, when the financial crisis broke out. That suggests the stimulus measures of 2009-10 may indeed have simply 'brought forward' future sales rather than created genuine new demand, as analysts including JD Power & Associates have argued.
A host of car-buying incentives, including tax cuts, subsidies and rebates, were phased out at the beginning of the year, but the impact of those measures being repealed has been felt unevenly in the market.
Producers of commercial vehicles such as medium to heavy duty trucks have been hard hit, as have manufacturers of popular microvans.
Domestic brands such as Chery and BYD have also seen a disproportionate impact on sales with the end of stimulus measures. Home-grown brands' share of overall passenger car sales declined to 45.4 per cent in the first five months of the year, down from 47.9 per cent a year ago, according to CAAM data.