China In April 2012: So-So For The Month, Still Down For The Year

by Bertel Schmitt

Published: May 10th, 2012

china in april 2012 so so for the month still down for the year

Vehicle sales in China were up a tepid 5.19 percent in April, the China Association of Automobile Manufacturers (CAAM) reports. From January to April, overall auto sales, including passenger cars and commercial vehicles, fell 1.33 percent year-on-year to 6.42 million units. Want better news? No problem!

Many news outlets, such as the Wall Street Journal or Fox News report an April increase of 12.5 percent. Technically correct, but misleading. The 12.5 percent are for passenger vehicles only. Sales of commercial vehicles on the other hand dropped a steep 15 percent in April, resulting in a bottom-line growth of 5.19 percent.

AprilYoYJan-AprilYoYAll vehicles1,624,4005.2%6,417,500-1.3%Passenger1,276,00012.5%5,049,1001.9%Commercial348,400-15.0%1,368,400-11.6%

The numbers show that just counting passenger vehicles would be a big mistake in China, just like it would be foolish to ignore “trucks” in the U.S. One in five motorvehicles sold in China is classified as a “commercial” vehicle. Many of the “commercial” vehicles are multipurpose vehicles, used to haul vegetables during the day and the family after work. If you want to get a feel for the market, you need to look at all vehicles.

The continuous drop in commercial sales in China is disconcerting. In any market, this would point to a worsening business climate. In China, it does that also, and it reflects that the lower brackets of the market are increasingly reluctant to buy. The newly rich still have money, Audi April sales in China for instance were up 44 percent at 34,221 units.

China-branded cars continue to lose market share. January to April, their combined market share dropped to 42.3 percent, down 3.2 points.

In light of the general market, the performance of GM is confusing. Until recently, GM was a good proxy for the Chinese market. Not anymore. Sales of passenger cars in China are up, even more so amongst the joint ventures. In the same month, Shanghai GM’s sales drop 2.2 percent. On the other hand, sales of Wulings explode, while the market for commercial vehicles collapses. Strange.

#April2012 #BertelSchmitt #China #Sales

Bertel Schmitt

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

Recent Comments

Jkross22 Their bet to just buy an existing platform from GM rather than build it from the ground up seems like a smart move. Building an infrastructure for EVs at this point doesn't seem like a wise choice. Perhaps they'll slow walk the development hoping that the tides change over the next 5 years. They'll probably need a longer time horizon than that.
Lou_BC Hard pass
TheEndlessEnigma These cars were bought and hooned. This is a bomb waiting to go off in an owner's driveway.
Kwik_Shift_Pro4X Thankfully I don't have to deal with GDI issues in my Frontier. These cleaners should do well for me if I win.
Theflyersfan Serious answer time...Honda used to stand for excellence in auto engineering. Their first main claim to fame was the CVCC (we don't need a catalytic converter!) engine and it sent from there. Their suspensions, their VTEC engines, slick manual transmissions, even a stowing minivan seat, all theirs. But I think they've been coasting a bit lately. Yes, the Civic Type-R has a powerful small engine, but the Honda of old would have found a way to get more revs out of it and make it feel like an i-VTEC engine of old instead of any old turbo engine that can be found in a multitude of performance small cars. Their 1.5L turbo-4...well...have they ever figured out the oil dilution problems? Very un-Honda-like. Paint issues that still linger. Cheaper feeling interior trim. All things that fly in the face of what Honda once was. The only thing that they seem to have kept have been the sales staff that treat you with utter contempt for daring to walk into their inner sanctum and wanting a deal on something that isn't a bare-bones CR-V. So Honda, beat the rest of your Japanese and Korean rivals, and plug-in hybridize everything. If you want a relatively (in an engineering way) easy way to get ahead of the curve, raise the CAFE score, and have a major point to advertise, and be able to sell to those who can't plug in easily, sell them on something that will get, for example, 35% better mileage, plug in when you get a chance, and drives like a Honda. Bring back some of the engineering skills that Honda once stood for. And then start introducing a portfolio of EVs once people are more comfortable with the idea of plugging in. People seeing that they can easily use an EV for their daily errands with the gas engine never starting will eventually sell them on a future EV because that range anxiety will be lessened. The all EV leap is still a bridge too far, especially as recent sales numbers have shown. Baby steps. That's how you win people over.