China Returns To Double Digit Growth
When China reported January sales that were higher than in the US, detractors said: “Yeah, but China was down also.” To be exact, in January, China was down 14.35 percent, while the US had declined 37.1 percent. Old China hands pointed out that the January sales numbers were exceptional, given the fact that there was a complete sales week missing in January, due to the early start of the Chinese New Year, where all of China is shut, closed, guan. Some of the same old China hands prognosticated that due to the same fact, February might be a roaring success. But who listens to old China hands? Okay, folks, listen up:
China vehicle sales surged 25 percent in February, the first gain in four months, Bloomberg reports. Sales of passenger cars, buses and trucks climbed to 827,600, the China Association of Automobile Manufacturers said today in Beijing.
And why would that be?
China has halved retail taxes on small cars and drawn up plans to give out vehicle subsidies in rural areas to revive demand. A $585 billion economic stimulus package is beginning to work.
Also, what the Chinese New Year had taken away in January, it gaveth back in February. Says Bloomberg: “The February sales jump, the biggest in 18 months, was also helped by an earlier Lunar New Year holiday. The weeklong break was in January this year compared with February last year. Snowstorms across much of China also disrupted the market in 2008.”
So it’s a fluke? A dead cat bounce? Not exactly.
March sales will likely be even better than in February, Xiong Chuanlin, vice secretary-general of the CAAM automakers group, told reporters in Beijing. The body is “cautiously optimistic” about full-year sales.
Even GM has received new hope. GM, raised its forecast for China’s market growth this year to a range of between 5 percent and 10 percent from an earlier prediction of less than 3 percent, GM Asia-Pacific President Nick Reilly, said.
India, the world’s second-most populous nation, also had an increase in February auto sales, the first gain in five months, as emerging markets avoid the world of the global recession. Germany reported a China-like 21 percent jump in February as Deutschland goes ga-ga over the “Abwrackprämie” (cash for clunkers). All numbers, especially pre-orders, indicate that in Germany also, growth will continue unabated.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
More by Bertel Schmitt
Comments
Join the conversation
The number one driver for reducing global worker conditions are big box stores (mainly American) that push so hard for savings that producers have to cut corners or lose the sale. Over the long haul the last 15 boom years and the current crisis all play into China's hand; the boom helped them import technology and move from peasant farming to modern industrialization, the profits of which they are now shoveling into buying cheap commodity producers around the world. They have a growing first rate infrastructure, an ambitious work force and are graduating the best educated people in the world. In reality they are already number one. America? Think Britain before the fall of their Empire.