CAR sales for the first five months are down a surprisingly modest 9.5 per cent from last year, according to the Motor Traders Association of Hong Kong.
There were 18,100 vehicle sales from January through May, against 20,000 last year for the same period. Not bad, when you consider how miserably the property and stock markets have fared.
But the numbers - inflated by orders dating back to last year - mask deep structural problems that point to depressed sales stretching way out into next year and perhaps beyond.
Discounting of 15-20 per cent and more in the mid-range segment signals plummeting income at one end, and in the luxury market, where discounts tend to lessen the value of the brand, dealers are watching orders drop by up to 50 per cent.
Both segments are being walloped by parallel imports. As the recession deepens across Asia, a booming grey market keeps eating away at Hong Kong's traditional car franchises - undoing business assumptions that have prevailed for years.
The grey market has plunged mid-range dealers into price wars, and the luxury segment has been hit by grey-market dealers who have descended like locusts on the secondary market.
