China In April 2010: Finally, The Official Word

Never has there been so much confusion over the closely watched Chinese car sales than this month. A relatively unknown China Automotive Technology and Research Center (CATRC), anointed by a report in Xinhua, had 40 percent growth for April. Then, all kinds of numbers came out. Chinese numerology was in an April disarray. Even TTAC’s in-house sales oracle, GM China became confused. First, GM reported a gain of 50 percent. A week later, the number was revised to 41.1 percent. (Which would indicate a Chinese market growth in the mid 30s.) We recommended caution. The last word on Chinese auto sales has the China Association of Auto Manufactures (CAAM). And the CAAM has spoken.

Today, the usually precise Nikkei [sub] reports from Beijing that China’s new car sales totaled 1.55m vehicles in April, up 34.4 percent year on the year. That according to the CAAM. Gasgoo confirms this number. Our in-house sales oracle also agrees – after GM revised the numbers.

The relative slowdown doesn’t come unexpected, because it’s relative. We are comparing to a higher and higher base as Chinese car sales went through the roof last year. Combined sales in the first four months are 6.17m units, up a whopping 60.51 percent.

Still, the frenzy is definitely cooling off. Dealers are complaining about rising inventories and slowing sales.

The homegrown brands, which rode the wave of small cars, have reason to worry. Their market share decreased 3 percent in April, while joint ventures with foreign makers enjoy strong demand as China is slowly moving back to bigger cars. Everything is getting back to the (Chinese) normal.

The CAAM maintains a 15 million unit target for the year. They say China’s auto market growth is returning to steady from high speed growth. Most likely, they are right and a bit conservative, as usual.