Summary data from the China Association of Automobile Manufacturers (CAAM) show that sales of vehicles have risen in May on the back of demand for passenger vehicles.
IHS Automotive perspective | |
Significance | Passenger vehicle sales in China continue to prop up the total vehicle market in China, and the government's drive for urbanisation across the interior of China is set to keep up the momentum in demand for passenger vehicles. |
Implications | Although growth rates of vehicle sales are slowing compared with previous months, the market is still seeing stronger growth rates in the passenger vehicle segment than the overall market. |
Outlook | Chinese passenger vehicle brands are going to see growing pressure to be the main volume sellers in China's interior regions and lower-tier cities; however, international brands such as those of North American, South Korean and German automakers are reporting higher overall sales. |
Total vehicle sales in China saw single-digit growth during May, while sales in the first five months increased by a double-digit growth rate. In May, total vehicle production rose 13.5% year-on-year (y/y) to 1,780,500, while sales rose by 9.8% y/y to 1,761,500 units, summary data from the China Association of Automobile Manufacturers (CAAM) show.
On a year-to-date (ytd) basis, vehicle production in January–May increased 13.5% y/y to 9,077,200 units, while sales in the first five months were up 12.6% y/y to 9,028,100 units.
Passenger vehicles, which under CAAM's definitions include sedans, sport utility vehicles (SUVs), multi-purpose vehicles (MPVs), minivans, and minibuses, saw total production increase 11.9% y/y to 1,419,700 units in May, while sales were up 9% y/y, with 1,396,900 units sold. In January–May, a total of 7,301,600 units were produced, a 15.2% y/y increase, while sales were up 14.7% y/y, with 7,261,600 units. Within this segment, SUV sales rose by more than 40%, the CAAM states. Commercial vehicles are also seeing growth but the volumes remain far lower than the passenger vehicle segment. In May, a total of 360,800 commercial vehicles were produced, up 20.4% y/y, while sales were up 12.4% y/y, with 364,600 units sold. On a ytd basis, a total of 1,775,600 units were produced, up 7.1%, while sales were up 4.5%, with 1,766,500 units sold.
Outlook and implications
Passenger vehicles continue to dominate China's vehicle market. Sales of passenger vehicles in May hit 1.39 million, accounting for 79.3% of total vehicle sales. On a ytd basis, passenger vehicle sales, as defined by CAAM, accounted for 80.43% of the market. Demand for passenger vehicles is keeping the Chinese vehicle market in positive territory. The government's push to develop urban centres in the vast interior regions of China is giving rise to consumer-led demand for passenger cars, which, in turn, is propelling overall sales of vehicles in China and maintaining growth in the market.
Overall, manufacturers of passenger vehicles have reported strong sales in May. Ford reported a rise of 45% y/y, while General Motors (GM) reported growth of 9.4% (see China: 5 June 2013: Ford's sales jump 45% y/y in China during May, GM, Volvo, Toyota, Nissan report growth). However, Japanese automakers Toyota and Nissan reported seeing slow growth in the market. In addition to the sales growth of North American automakers, German and South Korean brands also saw positive sales in China during May (see China: 7 June 2013: Mercedes, Audi , SAIC, Hyundai, Kia report China sales growth in May). Despite Japanese automakers such as Toyota and Nissan reporting growth, albeit slow, Mazda's sales continue to drop in China (see China: 4 June 2013: Toyota's China sales rise marginally in May, Mazda sales drop 11.6%).