The Truth About Cars » car sales http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Fri, 18 Apr 2014 14:00:34 +0000 en-US hourly 1 http://wordpress.org/?v=3.8.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » car sales http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Spanish Scrappage Scheme Now In Its Fourth Iteration http://www.thetruthaboutcars.com/2013/10/spanish-scrappage-scheme-now-in-its-fourth-iteration/ http://www.thetruthaboutcars.com/2013/10/spanish-scrappage-scheme-now-in-its-fourth-iteration/#comments Mon, 28 Oct 2013 17:25:46 +0000 http://www.thetruthaboutcars.com/?p=636505 Seat_Leon_III_(front_quarter)

The Spanish government is extending its own version of “Cash for Clunkers” for the fourth time, as Spain tries to boost sagging car sales in the midst of a severe recession.

Buyers will get a 1,000 euro subsidy if they trade in a 7 to 10 year old car for a newer, more fuel efficient one that costs less than 25,000 euro. The $97 million program will last for six months or until the subsidies run out, with the previous three programs helping to move 30,000 cars.

So far, Spain is the only country to initiate such a program – sales were up 29 percent last month, with the program credited for spurring much of the demand.

]]>
http://www.thetruthaboutcars.com/2013/10/spanish-scrappage-scheme-now-in-its-fourth-iteration/feed/ 13
Car Sales: Best July Since 2007, Almost Everybody Up, Truck Sales Yield Big 3 Market Share Gains http://www.thetruthaboutcars.com/2013/08/car-sales-best-july-since-2007-almost-everybody-up-truck-sales-yield-big-3-market-share-gains/ http://www.thetruthaboutcars.com/2013/08/car-sales-best-july-since-2007-almost-everybody-up-truck-sales-yield-big-3-market-share-gains/#comments Fri, 02 Aug 2013 10:00:43 +0000 http://www.thetruthaboutcars.com/?p=497790 2014-Chevy-Silverado

The recovery of the auto industry in the U.S. continues with July sales being the best in seven years, up 14% from last year. Every domestic and foreign based automakers had increased year to year sales, with double digit gains at six companies. Leading the pack were Honda, Toyota and General Motors, with sales up 21, 17 and 16 percent respectively. Ford, Chrysler and Nissan each were up 11%. Subaru, whose North American sales helped parent Fuji Heavy Industries to record earnings, had the best year to year performance, up 43%.

The seasonally adjusted annualized sales rate, SAAR, was just below analysts’ forecast at 15.7 million cars and light trucks. The strong July sales are expected to help total U.S. sales in 2013 to be the best since 2007′s 16.1 million units, analysts forecast 15.5. For the year through July, U.S. sales are up 8% industry wide.

In the actual sales race, the top five were led by GM with 234,071 units sold. Toyota was next with 193,394, just 314 units ahead of Ford. Honda was in fourth place at 141,439, with Chrysler close behind at 140,102.

As the housing and construction industries recover and the shale energy boom continues, pickup sales, Detroit’s bread and butter, have allowed the domestic brands to gain market share. GM’s sales of full size pickups were up 44%. All four brands at GM were up by double digits, with Cadillac and Chevrolet up 17% from 2012, Chevy’s best monthly year to year gain in over a year.

F-series pickups at Ford weren’t up as much as GM’s pickups, 23%, but they still outsold the Silverado and Sierra slightly with 60,449 units sold. Overall, Ford deliveries were up 12% while Ford’s luxury Lincoln volume slid 1%.

Nissan’s luxury brand, Infiniti, was also off, though by a much larger percentage, 33% but that was more than offset by a 17% increase in deliveries at the larger volume Nissan brand.

Chrysler deliveries were up for the 40th straight month, paced by strong Ram pickup sales. All Chrysler brands were up, including Fiat at 2%, except for the Chrysler brand itself, down 4% for the month. Jeep sales are down 4% for the year so far, due to the discontinuation of the Liberty and the slowed introduction of its Cherokee replacement.

Hyundai had a record July with 66,005 units sold and Mazda had it’s best gain in a year and a half, up 29% from 2012, on very strong sales of the CX-5 and CX-9 light trucks and an 18% increase in car sales.

Subaru also had strong sales for July, putting the company within reach of 400K units for the year and keeping it ahead of VW for the month, which was down 3%. VW did have some good news, with the brand’s heavily promoted TDI diesel engines having a big increase in take rate, up to almost 30% across the brand and nearly 40% for the Passat. Strong sales of the Q5 and Q7 SUVs paced sales at VW’s Audi brand, which were up 12%.

Automaker July 2013 July 2012 Pct. chng. 7 month
2013
7 month
2012
Pct. chng.
    BMW division 24,043 21,297 13% 164,474 147,801 11%
    Mini 5,950 5,855 2% 38,306 37,914 1%
    Rolls-Royce 84 79 6% 588 553 6%
BMW Group 30,077 27,231 11% 203,368 186,268 9%
    Chrysler Division 19,978 20,792 –4% 183,817 188,546 –3%
    Dodge 41,986 35,630 18% 360,400 297,208 21%
    Dodge/Ram 74,064 60,028 23% 567,540 464,089 22%
    Fiat 3,783 3,710 2% 25,395 24,416 4%
    Jeep 42,277 41,559 2% 271,682 283,106 –4%
    Ram 32,078 24,398 32% 207,140 166,881 24%
Chrysler Group 140,102 126,089 11% 1,048,434 960,157 9%
    Maybach 4 –100% 28 –100%
    Mercedes-Benz 25,563 21,516 19% 176,996 159,398 11%
    Smart USA 860 780 10% 5,319 5,528 –4%
Daimler AG 26,423 22,300 19% 182,315 164,954 11%
    Ford division 186,161 166,507 12% 1,437,609 1,264,928 14%
    Lincoln 6,919 6,975 –1% 45,207 48,937 –8%
Ford Motor Co. 193,080 173,482 11% 1,482,816 1,313,865 13%
    Buick 16,393 14,391 14% 117,230 104,589 12%
    Cadillac 15,652 13,417 17% 99,331 76,229 30%
    Chevrolet 162,670 138,942 17% 1,177,804 1,100,604 7%
    GMC 39,356 34,487 14% 260,052 235,528 10%
General Motors 234,071 201,237 16% 1,654,417 1,516,950 9%
    Acura 15,150 12,825 18% 92,131 85,761 7%
    Honda Division 126,289 104,119 21% 794,886 732,165 9%
Honda (American) 141,439 116,944 21% 887,017 817,926 8%
    Hyundai division 66,005 62,021 6% 427,015 418,690 2%
    Kia 49,004 48,074 2% 326,355 336,781 –3%
Hyundai Group 115,009 110,095 5% 753,370 755,471 0%
    Jaguar 1,613 1,011 60% 9,411 7,517 25%
    Land Rover 4,050 3,320 22% 27,034 24,311 11%
Jaguar Land Rover 5,663 4,331 31% 36,445 31,828 15%
Maserati 267 208 28% 1,536 1,496 3%
Mazda 24,977 19,300 29% 169,920 163,097 4%
Mitsubishi 5,230 4,194 25% 35,699 37,067 –4%
    Infiniti 7,762 11,619 –33% 59,995 65,996 –9%
    Nissan Division 101,279 86,722 17% 673,755 610,066 10%
Nissan 109,041 98,341 11% 733,750 676,062 9%
Subaru 35,994 25,183 43% 240,591 189,487 27%
Suzuki* 2,266 –100% 5,946 15,260 –61%
    Lexus 23,031 18,235 26% 141,446 126,367 12%
    Scion 6,261 6,904 –9% 41,261 42,025 –2%
    Toyota division 164,102 139,759 17% 1,119,478 1,042,602 7%
    Toyota/Scion 170,363 146,663 16% 1,160,739 1,084,627 7%
Toyota 193,394 164,898 17% 1,302,185 1,210,994 8%
    Audi 13,064 11,707 12% 87,341 76,865 14%
    Bentley 206 172 20% 1,380 1,249 11%
    Lamborghini* 46 43 7% 322 301 7%
    Porsche 3,820 2,803 36% 25,129 19,253 31%
    VW division 35,779 37,014 –3% 242,571 245,739 –1%
Volkswagen 52,915 51,739 2% 356,743 343,407 4%
Volvo Cars NA 5,909 5,717 3% 38,487 40,333 –5%
253 246 3% 1,771 1,717 3%
TOTAL 1,313,844 1,153,801 14% 9,134,810 8,426,339 8%

 

Chart: Automotive News.

]]>
http://www.thetruthaboutcars.com/2013/08/car-sales-best-july-since-2007-almost-everybody-up-truck-sales-yield-big-3-market-share-gains/feed/ 44
The Car Sales Comeback http://www.thetruthaboutcars.com/2013/05/the-car-sales-comeback/ http://www.thetruthaboutcars.com/2013/05/the-car-sales-comeback/#comments Tue, 14 May 2013 12:00:01 +0000 http://www.thetruthaboutcars.com/?p=488362 Click here to view the embedded video.

Happy days are here again!

April new car sales were up 9% from April 2012; which doesn’t sound like all that much until you realize that the winning brands beat losing brands by a near 5 to 1 margin.

As for used cars sales, they are even better. Official stats for the used car market are always hit or miss. But with large dealer networks such as Sonic Automotive, Carmax, Group One, and Asbury Automotive all recording double digit used car sales growth, it’s safe to say that the overall market for late model vehicles remains healthy.

And for all that good fortune, you can thank one overwhelming force in today’s marketplace.

The stock market.

The S&P 500 returned over 13% in 2012, while the NASDAQ Composite returned nearly 16%. As of 2013, both of these broad indices have already offered comparable returns for what amounts to only four and a half months of market activity. The S&P is up 14.5% from January 1st while the NASADAQ has registered a 13.9% gain.

Now the naysayers among you may only consider these returns as a minor sixteen month flash in a sea of chronic unemployment and low GDP growth. Fair enough. That is a fair assessment if we are talking about the broad overall economy.

But the average American is not a frequent buyer when it comes to new or even late model cars. In a land of nearly 200 million licensed drivers and just over 15 million new car buyers a year, there are only so many people who have the means to spend what amounts to $31,356 on average for a new car. Or even half that amount, $15,800, which coincidentally happens to be the average pre-tax and bogus dealer fee price for a four-cylinder 2011 Camry LE with 38,000 miles according to Manheim Auctions.

So never mind those stats. Who is buying those cars?

Older people for the most part. The average age for a new car buyer has increased dramatically from 43 years old in 2007 to 52 years old in 2012. This contrasts with a painful contraction of a nearly 30% decline for 18 to 34 year old buyers, and a 25% decline for the 35 to 44 year old group according to Lacey Plache of Edmunds.com

Late model cars are harder to track. So I will admit my perspective on that side of the market is only limited by the guys I converse with at the auctions every week.

According to a lot of the professional buyers and used car franchise operators at these sales, the young are widely considered to be the ‘gawkers’. While the older folks are coming with spouse, and sometimes even well aged kids of their own, to put a sizable amount of money down on an expensive car.   

And why are older people buying those cars (and trucks)? Not just because they have the money. But because they now have the confidence to take what is often a $30k+ plunge in overall wealth.

Let’s look a bit closer into the recent rear view mirror that are the S&P 500 and the NASDAQ Composite. Specifically, there are three recent facts about these broad investment indices, that reflect a steady change in the confidence level of the older new car buyer. 

  • Both of these broad indices are up substantially from their pre-recession January 2008 numbers (S&P 11%, NASDAQ 29%). A lot of folks who were able to buy and hold throughout this period now have even more money than before the sub-prime mortgage crisis. 
  • From 2009 thru 2012, both indices registered double digit annual growth for the entire time period with the exception all years except for 2011. 
  • That sole losing year only generated a net loss of .003% for the S&P 500 and 1.8% for the NASDAQ Composite. In otherwords, they were very small hiccups in what is now emerging as a five year period where annual market returns are finally becoming steady and healthy again.

Not a lot of people have the means to take that deep breath of patience needed to stomach the volatility that comes with a severe economic crisis. Pensioners rarely have a choice, while those with 401k plans have far better investing flexibility.

But guess who is winning?

Nearly everyone who has invested in domestic stocks, virtually all domestic bond fund investors, the overwhelming majority of dividend focused investors, international indices speculators of varying types. Even those fortunate souls who have the means to invest their free capital into a personal business are finding sustainable gains.

Those who have the money, are now making even more money.

If you make enough money over a long-term period, perhaps enough to erase your gains and secure your return, you may just decide to reward yourself with an expensive car.

This is what now drives sales for new cars and late model vehicles. At least until the job market recovers.

]]>
http://www.thetruthaboutcars.com/2013/05/the-car-sales-comeback/feed/ 51
Analysis: Google Cars Gets Ready To Retail Rumble http://www.thetruthaboutcars.com/2013/03/google-cars-retail-sales-rumble/ http://www.thetruthaboutcars.com/2013/03/google-cars-retail-sales-rumble/#comments Wed, 06 Mar 2013 07:25:38 +0000 http://www.thetruthaboutcars.com/?p=480094

Google’s autonomous car program tends to get the lion’s share of attention when discussing the tech giant’s auto initiatives. But lurking in the background is a more immediate project that has the potential to finally “disrupt” (as Silicon Valley types are so fond of saying) online automotive sales.

The last party to attempt such a feat was TrueCar, an innovative and well-intentioned company that ultimately ran afoul of dealers, regulators and the OEMs. TrueCar was forced to pull itself back from the brink and re-invent itself as a more dealer-friendly company, a process painstakingly documented by Ed and Bertel before I ever appeared on the masthead.

What TrueCar did was distort the information asymmetry that car dealers rely on to make money. TrueCar was able to provide data on everything from dealer invoice to transaction prices and allowed dealers to compete with one another for a sale – a major taboo in the world of car sales.

Now, Google is rolling out a service, the imaginatively named Google Cars, beyond its initial Bay Area test market. Consumers will be able to log onto Google Cars and use the handy one-stop filter box (rather than clicking through various menus and sub-menus to boost a given site’s pageview count) and get inventory, pricing and retailer information for the exact car they’re looking for, down to the color. With 66 percent of dealer website visits arriving from Google, it only makes sense for the tech giant to try and capture some of that value. Under the Google program, users can shop for their cars via the first page of any given Google search. Google will get a minimum of $10 per lead, which is determined by a bidding system. One California Toyota dealer told Automotive News that he was paying $22 per car and $26 per truck or crossover, slightly more than the $20 paid to competing services.

Reviews have been mixed, according to AN. Some dealers like the flexibility of bidding for leads, while others expressed frustration that potential customers can contact dealers anonymously (via disposable phone numbers or email accounts, which expire after a set number of unanswered calls or emails), which they say diminishes the effectiveness of the leads.

Regardless of the potential issues, Google Cars cannot be ignored. Google’s massive size and resources will allow it to be far more aggressive than TrueCar ever was when interacting with dealers and OEMs. Regulators may be a thorn in Google’s side (never underestimate the lobbying power of NADA and other dealer bodies), but again, it has the resources to put up a proper fight against the usually dominant entities.

On a smaller scale, Google Cars is likely to cause a lot of headaches for the established players in the online auto retail spaces. Current juggernauts like Edmunds, Kelley Blue Book, Cars.com and even TrueCar are all threatened by Google Cars, thanks to the strength of the Google brand and most of all, the superior user experience. Once consumers know that they can access a high-quality car shopping tool without ever leaving Google and have the benefit of Craigslist-style anonymity it will be a tough sell for the other sites to get their customers back. About the only criticism levied at Google Cars in this area is the lack of content, like car reviews and automotive news. But Google has never been a content company and they are wise in avoiding this space. Better to aggregate the near-infinite amount of automotive content (aggregation is one of Google’s strengths, after all) that will likely be consumed by dedicated auto enthusiasts rather than consumers. A successful Google Cars could also cause indigestion further down the on-line food chain, at sites that live mostly off selling leads, and who dress-up the lead generation with content, which all too often is not their own.

Aside from the millions it should generate for Google, the car shopping tool is yet another way for them to collect data on consumer purchases. In this case, Google will amass significant personal information relating to what is likely the second largest purchase of one’s life, data that goes beyond whether you like a tan interior or a manual transmission. Google already can sense purchase intent from your browsing data, actively perusing a shopping service would confirm this intent. Yes, it’s ironic considering that Google subscribes to the idea that “information wants to be free“, but there’s a reason behind the internet adage “if you’re not paying for it, you are the product”.

]]>
http://www.thetruthaboutcars.com/2013/03/google-cars-retail-sales-rumble/feed/ 18
AutoNation’s Car Cassandra Warns Of Big Market Crash http://www.thetruthaboutcars.com/2013/02/autonations-car-cassandra-warns-of-big-market-crash/ http://www.thetruthaboutcars.com/2013/02/autonations-car-cassandra-warns-of-big-market-crash/#comments Mon, 11 Feb 2013 15:02:03 +0000 http://www.thetruthaboutcars.com/?p=477178

Automakers look with worry at the tanking European market, but have great hopes for an advancing American. Not so fast, says Mike Jackson, CEO of AutoNation Inc. He sees a day of reckoning follow a few years of good auto sales.

“There is a day of reckoning coming for the U.S. economy and for America,” Jackson said at a J.D. Power conference in Orlando, with Reuters taking notes.

From 2004 to 2007, Jackson warned that automakers must stop producing too many cars, sold with generous consumer incentives and easy credit. In 2009, the U.S. auto market dropped to 28-year low after more than 10 years of sales that had averaged nearly 17 million. Now, he is warning of carpocalypse II.

Jackson said the federal monetary policies of low-interest rates and sharp increases in the balance sheet of the U.S. Federal Reserve are two major stimulus efforts that may come back to haunt American consumers.

Lacey Plache, chief economist for Edmunds.com, agreed with Jackson’s assessment, but like Jackson said it was difficult to peg the timing of the hit to the U.S. economy.

]]>
http://www.thetruthaboutcars.com/2013/02/autonations-car-cassandra-warns-of-big-market-crash/feed/ 30
Germany In September 2012: Brace For Impact http://www.thetruthaboutcars.com/2012/10/germany-in-september-2012-brace-for-impact/ http://www.thetruthaboutcars.com/2012/10/germany-in-september-2012-brace-for-impact/#comments Tue, 02 Oct 2012 12:36:59 +0000 http://www.thetruthaboutcars.com/?p=462450

For most of the year, the German new car market could defy Europe’s eye-popping g-forces. No more. Germany is now officially going down with the rest of them. With 250,082 units sold in September, German new car sales dropped 10.9 percent as compared to September last year.

According to data released by Germany’s Kraftfahrtbundesamt, the German car market has reached its inflection point and is down 1.8 percent for the first nine months of the year. Formerly unaffected Volkswagen is down 20.1 percent. Opel is down 25.6 percent, Ford is down 22.5 percent.

If you want to see worse numbers, look for sales of EVs or hybrids. Out of the 2,358,798 car sold in Germany from January through September, only 2,023 were EVs and 15,771 were hybrids.

With France down 18 percent in September, Spain down 37 percent, and  Italy under water by 25.7 percent, expect at bloodbath for Europe when the ACEA numbers will be released later in the month. Expect to to be only the beginning of a serious European crash. Also expect a return of cash-for-clunkers, which worked quite well in 2009.

]]>
http://www.thetruthaboutcars.com/2012/10/germany-in-september-2012-brace-for-impact/feed/ 6
Pessimistic Predictions For China Worry Western Automakers http://www.thetruthaboutcars.com/2012/03/pessimistic-predictions-for-china-worry-western-automakers/ http://www.thetruthaboutcars.com/2012/03/pessimistic-predictions-for-china-worry-western-automakers/#comments Tue, 20 Mar 2012 13:53:58 +0000 http://www.thetruthaboutcars.com/?p=435653

China has been the engine under record earnings at German automakers such as Volkswagen, Daimler and BMW. China helped GM offset its heavy losses at Opel, and provided more than 2 million cars that earned GM the (some say undeserved) title of world’s largest automaker. All of them have invested heavily into added capacity in China. All of them have reason to be worried.

Gu Xianghua, deputy secretary general of the China Association of Automobile Manufacturers (CAAM) said today that total vehicle deliveries in China may grow less that 5 percent this year. He cited a tepid GDP forecast and rising fuel costs that put a damper on China’s mass motorization.

Experts are very worried by Gu’s prediction that demand for commercial automobiles may drop by as much as 8 percent. Commercial vehicle sales are seen as a leading indicator, dropping commercial sales indicate a dropping economy. Says Gu according to Bloomberg:

“The slowing macro-economy will make it difficult to secure loans for commercial vehicles, restrictions on car ownership such as in Beijing, and car ownership costs such as fuel and parking fees are increasing. All these factors will have an impact on car buying in China.”

Automobile sales were down by nearly six percent in January and February. Gu’s remarks indicate that March might not be much better.

The cooling-off of the Chinese car market so far had the biggest effect on indigenous carmakers that sell to lower income customers. Joint venture makers increased their market share. However, luxury makers are beginning to feel the pinch. Says Bloomberg:

Dealers for high-end car marques such as Mercedes Benz, Audi and BMW are dangling the biggest discounts seen since 2009 as competition intensifies and demand growth weakens.”

 

]]>
http://www.thetruthaboutcars.com/2012/03/pessimistic-predictions-for-china-worry-western-automakers/feed/ 10
Chinese Love Foreign Cars, Want Their Government To Drive Domestic http://www.thetruthaboutcars.com/2012/03/chinese-love-foreign-cars-want-their-government-to-drive-domestic/ http://www.thetruthaboutcars.com/2012/03/chinese-love-foreign-cars-want-their-government-to-drive-domestic/#comments Sat, 10 Mar 2012 16:26:31 +0000 http://www.thetruthaboutcars.com/?p=434484 Western media widely reported (and still reports) that the Chinese government will only allow Chinese cars to be bought by its functionaries.

Not so. The rule exists in draft form only,and has been published to elicit public feedback.However, in a disturbing development, China Daily reports that “nearly 90 percent of respondents in a survey are in favor of China’s domestic independent-brand automobiles for governmental use.” It’s not that 90 percent said so. It’s the ominous fact that it is being published in a government-owned paper.

If the survey is correct, then Chinese citizens want to look down on the car choices of their rulers. The Chinese themselves are widely in favor of foreign cars. 70 percent of all cars bought in China are foreign branded. The appetite for foreign branded cars remains high,as the following tables show.

Here are tables of China’s best selling cars and SUVs as of February 2012, courtesy of the China Assosciation of Automobile Manufaturers CAAM.

As you can see, the top selling car list is populated nearly exclusively by joint venture cars. The only exception: The BYD F3. That is a blatant copy of the Corolla.

On the SUV list, the Haval is said to be inspired by the Toyota 4Runner and the Isuzu Axiom. Tde BYD S6 on the list can be converted into a Lexus RX 350 with a few pieces of chromed plastic.

China Top 20 Passenger Cars, February 2012
Rank Models Makers Deliveries
1 Buick Excelle Shanghai-GM 23,564
2 VW Lavida Shanghai-VW 21,996
3 Chevy Cruze Shanghai-GM 20,662
4 VW Bora FAW-VW 18,377
5 VW Jetta FAW-VW 18,365
6 VW Passat Shanghai-VW 17,906
7 Chevy Sail, 3-box Shanghai-GM 16,629
8 FAW Xiali series FAW 16,566
9 Elantra-Yuedong Beijing-Hyundai 15,315
10 Nissan Tiida Dongfeng-Nissan 15,311
11 Great Wall Voleex C30 Great Wall Motor 15,097
12 Toyota Corolla FAW-Toyota 14,777
13 Hyundai Verna Beijing-Hyundai 14,298
14 BYD F3 BYD 13,492
15 Nissan Sunny Dongfeng-Nissan 13,170
16 Toyota Camry GAC-Toyota 13,072
17 Skoda Octavia Shanghai-VW 13,052
18 Toyota Corolla-Huaguan FAW-Toyota 12,375
19 Chery QQ Chery Auto 11,234
20 Nissan Sylphy Dongfeng-Nissan 10,406
China Top 10 SUVs, February 2012
Rank Models Makers Deliveries
1 VW Tiguan Shanghai-VW 15,487
2 Haval H series Great Wall Motor 14,417
3 Toyota RAV4 FAW-Toyota 10,264
4 BYD S6 BYD 9,834
5 Nissan Qashqai Dongfeng-Nissan 9,399
6 Honda CR-V Dongfeng-Honda 9,056
7 Toyota Highlander GAC-Toyota 7,576
8 Hyundai ix35 Beijing-Hyundai 7,024
9 Audi Q5 FAW-VW 6,716
10 Chery Tiggo Chery Auto 5,984
]]>
http://www.thetruthaboutcars.com/2012/03/chinese-love-foreign-cars-want-their-government-to-drive-domestic/feed/ 6
TTAC Investigates: Why Japanese Suddenly Hate Cars http://www.thetruthaboutcars.com/2011/10/ttac-investigates-why-japanese-suddenly-hate-cars/ http://www.thetruthaboutcars.com/2011/10/ttac-investigates-why-japanese-suddenly-hate-cars/#comments Tue, 04 Oct 2011 14:31:53 +0000 http://www.thetruthaboutcars.com/?p=413431

 

Yesterday brought you news of the tepid Japanese car market that has been down 26 percent for the year. Commenter Alex Nigro DEMANDED the answer to “Are Japanese people still not interested in driving?”

The Nikkei [sub] immediately went on the case and reports today that there is one segment in the industry that is booming: Bicycles. Writes the Nikkei:

“The March 11 earthquake triggered an increase in the number of people who commute to work by bike, and new business are cropping up to accommodate this trend, including high-end park-and-shower services in central Tokyo.”

Two years ago, the Tokyo government started to promote commuting by bicycle. There even was a new word for the two-wheeled salary-man: “Tsuukin-isuto.”  That spurred a mild trend, but not necessarily a craze of Japanese proportions. Did you ever had the pants of an Armani get into the chain?

Then, disaster struck. Millions of Japanese were stranded in downtown Tokyo on March 11 afternoon after the 8.9-magnitude earthquake closed down the sprawling mass transit system. “Suddenly, bikes became a lot more attractive to many people,” says the Nikkei. In a matter of minutes, bicycle stores were empty.

In the aftermath, saving power replaced Buddhism and Shinto as a religion in Japan. Salary-men were urged to ditch their blue suit and tie for “super cool biz” (short sleeves and open collars). Thermostats of the A/C were set to barely bearable, the nation perspired for a noble cause, and the bike race was on.

In short order, bikes turned into big business. Downtown office buildings opened high-tech full-service indoor bicycle parking operations: Racks for the bikes, showers, lockers. The monthly fees are steep: They range from $200 to $300 a month per bike. That approaches Manhattan fees – for a car. But in Tokyo, I get a free shower and don’t have to tip Gonzalez.  I can also buy a bike for the same price.. A really cool bike.

The real craze in Tokyo is not the Roppongi daytraders that switched his Porsche for a Miyata (the bicycle.) The REAL craze in Japan is mamachari.

That’s a Japanese portmanteau of “mama” (mama) and “charinko” (bicycle): It denotes a utility bike with chainguard, fenders, rack, skirt guard, dynamo lights, baskets, and child carriers. It used to be to conveyance of choice of a housewife with two small children and shopping bags. Helmets? Who needs them?

Now, mamachari have been co-opted by the super-cool set. There are weekly mamachari meets, mamachari races, and of course, gobs of mamachari blogs.

If you want to pick up a girl in Tokyo, forget dangling the keys to your 911. The operative phrase is “want to ride side-saddle on my mamachari?”

After a few hundred yards, claim you are out of breath, and  lock the bike to a lamp post in front of a love hotel: “Shower-ga hitsu you desu.” (We need a shower.)

 

]]>
http://www.thetruthaboutcars.com/2011/10/ttac-investigates-why-japanese-suddenly-hate-cars/feed/ 41
What They Really Drive On The Autobahn: Germany’s Top 50 http://www.thetruthaboutcars.com/2011/06/what-they-really-drive-on-the-autobahn-germany%e2%80%99s-top-50/ http://www.thetruthaboutcars.com/2011/06/what-they-really-drive-on-the-autobahn-germany%e2%80%99s-top-50/#comments Thu, 02 Jun 2011 14:14:48 +0000 http://www.thetruthaboutcars.com/?p=397124

According to lore, Germany’s autobahn is teeming with S-Class, Porsches, and the occasional Veyron mixed in. Not so, says Germany’s Über-DMV, the Kraftfahrtbundesamt, in an article about the 50 top selling cars in Germany of 2010. “Upper class and sports cars are not in the Top 50,” say Germany’s keepers of car data. The truth is in the following table.

Germany’s Top 50
Rank Make & model Segment Units 2010 Share Diesel
1 VW GOLF, JETTA Compact Class 251,078 8.6% 35.4%
2 VW POLO Small Cars 96,945 3.3% 18.1%
3 OPEL ASTRA Compact Class 72,685 2.5% 27.7%
4 MERCEDES C-KLASSE Middle Class 71,871 2.5% 55.1%
5 BMW 3ER Middle Class 67,643 2.3% 68.8%
6 VW PASSAT Middle Class 66,496 2.3% 82.6%
7 OPEL CORSA Small Cars 65,304 2.2% 5.0%
8 AUDI A3, S3 Compact Class 63,466 2.2% 45.1%
9 AUDI A4, S4 Middle Class 59,863 2.1% 76.8%
10 BMW 1ER Compact Class 55,353 1.9% 53.9%
11 MERCEDES E-KLASSE Upper Middle Class 54,111 1.9% 73.9%
12 FORD FOCUS Compact Class 53,720 1.8% 36.2%
13 FORD FIESTA Small Cars 51,598 1.8% 10.5%
14 MERCEDES A-KLASSE Compact Class 51,579 1.8% 27.6%
15 SKODA FABIA Small Cars 48,609 1.7% 11.3%
16 BMW 5ER Upper Middle Class 46,014 1.6% 81.9%
17 VW TOURAN Van 45,684 1.6% 63.2%
18 SKODA OCTAVIA Compact Class 42,946 1.5% 54.8%
19 VW TIGUAN SUV 38,687 1.3% 66.6%
20 MERCEDES B-KLASSE Minivan 37,526 1.3% 39.9%
21 VW TRANSPORTER, CARAVELLE Utility 36,691 1.3% 99.4%
22 OPEL MERIVA Minivan 31,741 1.1% 12.5%
23 BMW Mini Small Cars 31,477 1.1% 14.1%
24 HYUNDAI I 30 Compact Class 30,498 1.0% 22.8%
25 AUDI A6, S6 Upper Middle Class 30,079 1.0% 88.3%
26 VW CADDY Utility 30,005 1.0% 68.0%
27 SMART FORTWO Mini 29,065 1.0% 14.9%
28 OPEL INSIGNIA Middle Class 28,208 1.0% 76.6%
29 RENAULT MEGANE Compact Class 27,465 0.9% 40.6%
30 BMW X1 SUV 26,634 0.9% 82.9%
31 NISSAN QASHQAI Minivan 24,148 0.8% 33.8%
32 PEUGEOT 207 Small Cars 23,994 0.8% 18.8%
33 FIAT PANDA Mini 23,638 0.8% 5.5%
34 SEAT IBIZA, CORDOBA Small Cars 23,570 0.8% 11.8%
35 AUDI A5, S5 Middle Class 23,415 0.8% 54.6%
36 RENAULT CLIO Small Cars 23,333 0.8% 5.3%
37 AUDI Q5 SUV 23,148 0.8% 85.9%
38 RENAULT SCENIC Minivan 22,677 0.8% 53.9%
39 TOYOTA YARIS Small Cars 20,811 0.7% 5.0%
40 OPEL ZAFIRA Van 20,750 0.7% 37.7%
41 FORD MONDEO Middle Class 20,304 0.7% 76.3%
42 RENAULT TWINGO Mini 19,648 0.7% 1.9%
43 SEAT ALTEA, TOLEDO, LEON Minivan 18,668 0.6% 24.8%
44 FIAT 500 Mini 17,707 0.6% 5.0%
45 NISSAN MICRA Small Cars 17,689 0.6% 1.5%
46 DACIA SANDERO Compact Class 16,835 0.6% 7.7%
47 HYUNDAI I 10 Mini 16,703 0.6% 0.1%
48 CITROEN C3 Small Cars 16,619 0.6% 19.0%
49 SKODA SUPERB Middle Class 15,450 0.5% 73.3%
50 PEUGEOT 308 Compact Class 15,376 0.5% 51.7%
Total Top 50 2,047,524 70.2% 42.3%
All registrations 2010 2,916,260 100.0% 41.9%

25 cars made up half of Germany’s  sales last year. The Top 50 account for 66 percent. 42 percent burn oil. Electric cars? Hybrids? Do you see any?

 

]]>
http://www.thetruthaboutcars.com/2011/06/what-they-really-drive-on-the-autobahn-germany%e2%80%99s-top-50/feed/ 39
China’s Car Market: Bust Or Boom? http://www.thetruthaboutcars.com/2011/03/china%e2%80%99s-car-market-bust-or-boom/ http://www.thetruthaboutcars.com/2011/03/china%e2%80%99s-car-market-bust-or-boom/#comments Sat, 12 Mar 2011 13:40:16 +0000 http://www.thetruthaboutcars.com/?p=387047

Many pronounced the end of China’s torrid growth of car sales after they slowed to just 4.57 percent in February. Xing Huang, chairman of state-owned auto parts maker China Auto Parts & Accessories Corp (CAPAC), thinks otherwise. He expects the Chinese auto market to grow at the same speed in 2011 as in the year before, says Reuters. That would  be 32 percent.

CAPAC President Kangren Chen points at 150 million motorcycle owners in China who want to own cars. That actually is a good indicator. Once people have money, they change from 2 wheels to 4.

In the meantime, the car market in Beijing is in total disarray. As reported before, only 2,000 of the 20,000 license plates awarded in the lottery have been converted into car sales. The used car market has collapsed, because license plates are no transferable. A lot of people in Beijing expect the rules to change the soon the city can backpedal without a huge loss of face.

]]>
http://www.thetruthaboutcars.com/2011/03/china%e2%80%99s-car-market-bust-or-boom/feed/ 10
Hilfe! Huge Car Shortages In Deutschland! http://www.thetruthaboutcars.com/2010/10/hilfe-huge-car-shortages-in-deutschland/ http://www.thetruthaboutcars.com/2010/10/hilfe-huge-car-shortages-in-deutschland/#comments Sun, 17 Oct 2010 14:49:30 +0000 http://www.thetruthaboutcars.com/?p=369126

How things change. A few months ago, German dealers complained that the sky is falling, and that it’s the end of the car business as we know it – just because German cars sales had crashed from their Abwrackprämien-induced unnatural highs. Now, German car dealers have new reason to be worried: More buyers than cars! Rationing! Come back next year!

Automobilwoche [sub] finds car shortages wherever they look. “Export successes are nice for the automaker,“ says a large VW dealer, “but my customers have to wait longer and longer for their cars, which endangers sales.” Implied criticism: Those bastards send their cars to China instead to their German dealers. What’s more, dealers are worried that they can’t reach their targets and will be cheated out of their year end bonus – not because they don’t sell enough cars, because the automaker can’t deliver.

The problem is rampant industry-wide. One item must be made clear before we look: The preponderance of made-in-Europe cars are made-to-order. You pick a car with all the details you want, they’ll make it for you. Takes about 4 weeks when everything goes normal. Currently, things don’t go normal.

  • Alain Uyttenhoven, head of Toyota Germany confirms that “there can be shortages with niche products that are not made in Europe, such as Land Cruiser, HiLux or HiAce. In the past months, our supply situation was not optimal.”
  • If you order a Daimler now, they promise you delivery by the end of the year, unless for „a few exceptions, such as SLS AMG, CL and CLS,” says a Daimler spokestress.
  • Over at BMW in Munich, „delivery times for models made in the US (X3/X5/X6) reach into the new year.“ If you order one now, you may get it in February 2011, if you are lucky. Want a new 5-Series? Some of them won’t be available until next year.
  • Ford has supply problems with cars with bigger bore diesel engines, for instance with the Mondeo, the S-Max or the Galaxy. The Thailand-made Ranger comes with a long wait.
  • Renault has problems with the Koleos: 4 months wait. All other cars can be had within 8 to 12 weeks, if you order now.
  • Delivery times at Volkswagen: Between 6 and 12 weeks, some models longer.
  • The only brand that has abundant cars: Opel. Opel sales boss Imelda Labbé told Automobilwoche: “All ordered cars will be delivered this year.”
]]>
http://www.thetruthaboutcars.com/2010/10/hilfe-huge-car-shortages-in-deutschland/feed/ 3
Chinese Car Sales: 17m This Year, 40m in 2020, 75m in 2030 http://www.thetruthaboutcars.com/2010/10/chinese-car-sales-17m-this-year-40m-in-2020-75m-in-2030/ http://www.thetruthaboutcars.com/2010/10/chinese-car-sales-17m-this-year-40m-in-2020-75m-in-2030/#comments Mon, 11 Oct 2010 18:01:59 +0000 http://www.thetruthaboutcars.com/?p=368226

We are still waiting for the September sales numbers for China (at least we were spared the usual CATRC drama of faux numbers – maybe because there was a one week holiday?) But here comes something interesting (or shocking, depending on who’s side you’re on.) Auto sales in China could hit 17 million units this year, up from 13.6 million in 2009, Chinese state media said today, citing the China Association for Auto Manufacturers (CAAM.) And that was the harmless part.

According to a Xinhua news report, brought to us by India’s Economic Times, because the Xinhua report can’t be found, the CAAM expects a rise of 25 percent to 17m units when the year is over.  Xinhua also adds that sales of 17 million would equal the highest yearly figure ever reached in the United States. Rub it in boys, rub it in.

The CAAM is not known for wild projections. Actually, their guesses are usually on the conservative side. Like any good executive, they only make projections they already know they can and will reach.

They don’t have official numbers for September yet, but “last month sales are expected to be up by nearly 40 per cent over September 2009.” In that case, you bet they will.

Now, the Chinese government even has a formula for car growth: “The growth in the auto sector should be maintained at about one and a half times the growth in gross domestic product,” said Xu Changming, an official in charge of resource development at the State Information Center. Now consider that China gets sweaty palms if GDP growth is below 10 percent, and you’ll know how many cars they will sell. At the barest minimum.

With the help of Chinese sources we had already predicted in May that sales could rise by 25 percent to 17m. We are pleased to read that Xinhua now follows the math we had published in July: Even if the number of cars manufactured in China in the future does not increase by more than 10 per cent per year, total sales should surpass 40 million units annually before 2020 and could attain 75 million by 2030, Xinhua said.

Update: Automotive News [sub]  reports that GM’s  sales increased 15 percent in China in September. GM and its Chinese joint ventures sold 208,353 units last month. Ford’s China deliveries rose 26 percent in September to 50,970 units. While the Ford number is insignificant, the GM number isn’t. GM usually is a good indicator for the Chinese market. 15 percent for GM, and “nearly 40 percent” for the whole market is a serious divergence. Something must be off – again.

Update 2: More numbers are coming in from Reuters.

Industry monster SAIC, which runs joint ventures with GM and VW sold a total of 324,831 vehicles last month, up 23 percent. In September, SAIC’s JV with GM sold 100,825 units, up 41 percent. Sales at its JV with VW are up 36 percent to 95,869 units. (That’s not all of VW China, FAW has the other half.) What ruined GM’s data was Wuling. The maker of millions of delivery vans that made GM’s China numbers look good so far, suddenly reported flat sales, 101,290 units in September ‘10, versus 101,000 units a year earlier. That explains it the 15 percent overall number.

Over at state-owned Dongfeng, sales are up 22.3 percent from a year ago to 180,162 units sold  in September. Dongfeng has JVs with Honda, Nissan, and PSA.

These numbers point to a good month, and make the 17m target very credible. China expects a rush in new cars in the last few months of the year. People don’t know whether the tax incentives for small cars will still be there next year, so people will buy this year instead of next.

]]>
http://www.thetruthaboutcars.com/2010/10/chinese-car-sales-17m-this-year-40m-in-2020-75m-in-2030/feed/ 11
Germany In May 2010: Car-Nage http://www.thetruthaboutcars.com/2010/06/germany-in-may-2010-car-nage/ http://www.thetruthaboutcars.com/2010/06/germany-in-may-2010-car-nage/#comments Thu, 03 Jun 2010 18:31:26 +0000 http://www.thetruthaboutcars.com/?p=358012

Remember carmageddon? It is not forgotten in Germany. As a matter of fact, Germany’s biggest carmageddon happened last month, in May. While champagne corks popped in the U.S., propelled by a 19 percent plus in May, the Germans are crying into their beers. According to numbers released by the German Kraftfahrt-Bundesamt (KBA,) the new car market collapsed by heart attack inducing 35.1 percent in May. That’s not the worst part of the story.

The really bad part is that sales in May were 9.3 percent below the same month in the dark days of 2008. The graph above tells the story. Germany had averted carmageddon in 2009 by pumping massive amounts of Abwrackprämien (cash for clunkers) money into the market. Result: See red line above. In 2009, the German market jumped well over normal levels.

With the money missing, the market is going into serious withdrawal. See green line for 2010. Except for March, new car sales have been below 2008 levels for each month of the current year. The traditionally active spring selling season collapsed.

Have a look at January. When January 2009 sales disintegrated (red line) it spooked the German government into laying on the cash for clunker program. You see it working. Then sales dropped as the money was withdrawn. Many cars are built to order in Germany, there were waits for delivery. The amphetamines, prescribed in Berlin, took a while to work themselves out of the system. With the market drug-free, we are now below crisis levels. Will there be Abrwackprämie, the Sequel? Only people on real drugs think so.

There is no end in sight. The headlines will get worse through June/July. By the end of the year, the numbers will have caught up with the new reality. So far, this is worse than the most pessimistic pundits projected.

In the first five months of the year of 2010, Germans bought 1.179,532 cars. That’s 450.000 less than in the same period of the prior year.

Small cars, the darlings of the Abwrackprämien high, are nearly unsalable. That segment shrunk by more than half. The formerly eschewed upper classes and SUVs enjoy a come-back from near extinction and are the only segments with growth.

As far as brands go, Mercedes-Benz is he only winner of the May slugfest. Daimler grew by 6 percent, mostly due to the brisk sales of the new E-Class. Ashen faces in Munich: BMW lost nearly 15 percent. The so-called volume manufacturer were seen lining up at the drugstores of Rüsselsheim, Cologne, and Wolfsburg, from where antacid shortages are reported. Opel lost 51.5 percent, Ford gave up 45.9 percent, VW said good-bye to 34.1 percent of 2099 May sales.

The import brands didn’t fare better, some worse. The few gains are by boutique brands on such a low level, that it could well be numerical flukes.

Bad omen: Lancia, which is supposed to be merged with the Chrysler and Dodge brands, is at the bottom of the list in May, with only 133 cars sold. Lada sold more (178.)

As far as the German market goes, I never subscribed to the pull forward theory. There was nothing to pull forward. Owners of clunkers usually don’t buy new. They buy used, a younger clunker. The thinking was that by luring that usually new-adverse segment into buying new, the missing new car buyers could be replaced. They still are missing. As Germany gets older, they might never be back. What’s back is the used car market. Solidly (+13,4 percent) up again in May.

If you want to cry for Germany, or watch with glee the belated carpet bombing of the German market, then you may download the data in all their ugliness here. In German, but the numbers need no translating. They are abgrundtief schrecklich (abysmally appalling.)

]]>
http://www.thetruthaboutcars.com/2010/06/germany-in-may-2010-car-nage/feed/ 12
Car Execs Predict: 41m Cars Per Year In China 2015 http://www.thetruthaboutcars.com/2010/04/car-execs-predict-41m-cars-per-year-in-china-2015/ http://www.thetruthaboutcars.com/2010/04/car-execs-predict-41m-cars-per-year-in-china-2015/#comments Mon, 19 Apr 2010 16:11:02 +0000 http://www.thetruthaboutcars.com/?p=353183

Whenever yours  truly sings the long-term praise of the booming Chinese auto market, it elicits loud protests: “Can’t be! Bubble market! The environment! (Our gasoline.)”

The people who make and sell cars for a living have a different opinion. The AlixPartners consultancy asked  50 senior executives from both foreign and domestic players in China’s automobile industry how much they think the Chinese car market will grow between now and 2015. Guess what their answer is?

The 50 executives expect “steady growth of the Chinese auto market in the future, with a projected average sales growth of 20 percent per annum between now and 2015”, said John Hoffecker, managing director of AlixPartners.

20 percent ain’t much? Don’t forget the magic of compound interest.

If the 50 guys are right on, it will be 16m cars this year, 24m cars in 2012, 41m cars in 2015.

Can’t be! Communist propaganda! Lies! Bubble market! The environment! Our gasoline! Let them ride bicycles!

]]>
http://www.thetruthaboutcars.com/2010/04/car-execs-predict-41m-cars-per-year-in-china-2015/feed/ 18
Three Guys Discuss The Chinese Car Bubble Theory http://www.thetruthaboutcars.com/2010/04/three-guys-discuss-the-chinese-car-bubble-theory/ http://www.thetruthaboutcars.com/2010/04/three-guys-discuss-the-chinese-car-bubble-theory/#comments Sun, 11 Apr 2010 14:27:35 +0000 http://www.thetruthaboutcars.com/?p=352066

Chinese dually. Picture courtesy transportfool.com

I spent an interesting Saturday with two old friends of mine. They had never met before. One, American, CFO of an insurance company, had been in the finance and banking business all his professional life. The other, born Chinese, naturalized American. Was one of the top mortgage writers in the Silicon Valley before the dotcom crash. Came back to China and heads a Chinese/American bank. The two got along splendidly.

Of course, we talked about money and cars. Recently, there was a discussion on TTAC on how the bursting of the Chinese real estate bubble would destroy the car market just like it had in the USA. I eagerly set out to pick their brains.

Quite oddly, the first one to throw water on the bubble theory was my friend, the staid CFO of the staid insurance company. He thoroughly debunked the myth that the American car bubble of 2000 was created by people who had come into money by flipping homes instead of burgers. He had one number right off the top of his head. “Each year, about a million homes change hands. Sometimes more, sometimes less. Even assuming they were all flippers, they didn’t buy 17 cars per home and year.” Instead, he said, it was easy credit that had driven up the sales of cars before it drove up prices of homes.

Need some cars to go with it? Picture courtesy newhomessection.com

Did the wealth effect, the feeling that you suddenly sat on a three  million home that you had bought for $500,000 (with $100,000 down,) did that urge you to fill up that three car garage to its limit? No, said my friend, the staid CFO. Housing prices were relatively flat through the 90s while car sales increased. Car sales peaked in 2000, just when home sales started to skyrocket. Real estate taxes rose right with it, and those three cars turned into a liability. Car sales eased.

“Easy credit did cause the car and housing bubble. The credit crunch burst both bubbles. But the housing bubble was not the cause of the car bubble,” said my bean counting friend. If you look at the charts which I linked in this paragraph, you see that while doing it off the top of his head, he was right. The car boom in the U.S. preceded the real estate boom. Both crashed when the easy money was gone, or, as my beancounting friend put it, “when the hedge funds said to sell everything that’s not listed on the NYSE.”

He then went into a long monolog about high yield asset-backed-securities and credit derivatives that were en vogue with hedge funds. He did that much to the fascination of my Chinese friend, but I lost him.

About 60 skyscrapers in Beijing are vacant. Picture courtesy springcreekacq.com

When the discussion came to the Chinese real estate bubble, my Chinese banker friend emphatically acknowledged that China is in a huge one. Mostly in the tier one cities, but getting into the tier 2 cities also. He said that it is an absolute insanity. People buy homes and apartments, and keep them empty. Vacancy rates in tier one cities are sometimes higher than 30 percent. About 60 skyscrapers in Beijing are vacant. He congratulated me on my choice of renting, and suggested I should move, because rents are actually coming down. Caused by the oversupply of unsold properties, held for speculative purposes.

When they are poor, they take the bus or the train... Picture courtesy concierge.com

When they are poor, they take the bus or the train... Picture courtesy concierge.com

Coming to cars, my Chinese banker friend emphatically denied that easy money has anything to do with the skyrocketing car purchases in China. “That’s an American fantasy. Chinese don’t finance their cars. They pay with cash.” He told me how forays of his bank into the automotive financing field had failed, to the utter disbelief of his American partners.

The official party line is that “less than 20 percent of Chinese car purchases are financed.” My Chinese banker friend figures it might be less than 10 percent. “The number of financed cars is actually going down. Chinese don’t borrow to buy a car. When they are poor, they take the bus or the train. When they earn more, they buy a car.” He said that that Chinese increasingly earn more. About 25 percent of China’s 1.3b to 1.5b people are considered “middle class.”

… when they earn more, they buy a car. Picture courtesy popsci.com

Then, my Chinese fried mentioned the high savings rate of the Chinese, and that many of them don’t know where to stash their money. That got the fascination of my bean counting friend. They both bemoaned the lack of high yielding safe investments. When they started discussing yield curves, instead of the curves I am interested in, I lost them again.

We went for dinner, all three of us agreeing that in China, the boom in cars has nothing to do with the boom in real estate, that the two are much more disconnected than they ever were in the U.S., that the Chinese real estate market will go boom unless the government will intervene (very likely, as it is often state owned enterprises that are driving the prices up and are building the empty towers,) and that the car boom in China will last until the motorization has reached Western standards. In a country where cars aren’t financed, tight or easy money has little impact on car buying.

A level of motorization according to Western standards  is about 600m cars away. So even if the Chinese would – horrors of horrors – buy 50m cars a year, instead of the 15-17m this year, China would have 12 years until the beginnings of a market saturation.

I asked both whether I should buy oil futures. They both shrugged, and we had the best Beijing duck in town.

]]>
http://www.thetruthaboutcars.com/2010/04/three-guys-discuss-the-chinese-car-bubble-theory/feed/ 30
China in January: Up 115 Percent. Or 126 Percent http://www.thetruthaboutcars.com/2010/02/china-in-january-up-115-percent-or-126-percent/ http://www.thetruthaboutcars.com/2010/02/china-in-january-up-115-percent-or-126-percent/#comments Tue, 09 Feb 2010 17:53:36 +0000 http://www.thetruthaboutcars.com/?p=344819

]]>
China’s passenger car sales in January skyrocketed an unbelievable 115.5 percent from a year earlier, China’s official scorekeeper, the China Association of Automobile Manufacturers said today. A total of 1.32m passenger cars were sold last month in China, compared with 610,600 units a year earlier. In December 2009, 1.1m units changed hands, Reuters reports. The January number is even more surprising as the China Passenger Car Association had originally figured that China’s passenger car sales rose 84 per cent in January. We compared the Reuters story with Xinhua, the official word on China, and Xinhua also says: “Passenger car sales were up 113.21 percent to 1.32 million units last month.”

Overall vehicle sales, including buses and trucks as well as cars, were even more amazing: A total of 1.66m units in January, up 126.3 percent from 735,500 units a year earlier. Keeping passenger vehicles and commercial vehicles apart is a frustrating exercise in China. Minivans for instance, and of course pickups, count as commercial vehicles.

“Demand remains strong in January as many people want to get a new car for themselves and for their loved ones before the Chinese New Year,” said Zhang Xin, an analyst with Guotai Junan Securities. Chinese New Year, which officially starts on Feb. 14 this year and lasts a week, but unofficially lasts the whole month of February, is the biggest shopping season in China.

Number were slightly distorted. January 2009 had showed a decline of 7.76 percent because of the slowing economy, and because the begin of Chinese New Year fell into January last year.

By way of comparison, U.S. light vehicle sales (cars and trucks) totaled 698,990 in January  – that’s less than half of China’s vehicle sales in the same period.  In terms of “passenger vehicles,”  Americans bought 397,131 in January. The Chinese bought more than three times as many.

2009 auto sales in China were up 45 percent. China blew by the United States and became the world’s largest car market by a wide margin.  Analysts predicted more sedate growth rates of 10 to 15 percent in 2010, if only because of the higher comparative base in 2009. Chen Hong, president of SAIC, sees bigger gains, due largely to pent-up demand in smaller cities where cars are no longer a luxury item as wealth grows. Most of China’s automakers share his optimism and invest for a growth between 20 and 30 percent in 2010.


]]>
http://www.thetruthaboutcars.com/2010/02/china-in-january-up-115-percent-or-126-percent/feed/ 6
The China Syndrome: 50 Million Cars A Year? http://www.thetruthaboutcars.com/2010/02/the-china-syndrome-50-million-cars-a-year/ http://www.thetruthaboutcars.com/2010/02/the-china-syndrome-50-million-cars-a-year/#comments Fri, 05 Feb 2010 10:50:10 +0000 http://www.thetruthaboutcars.com/?p=344293

Yesterday, we reported that China wants to be a market of 20m cars in 2012. We didn’t predict that, just reporting the news, ma’am.

A hue and cry ensued:  “Can’t be!”

Commentator ohsnapback, who’s forte is lawyering, a much more complex field than economics, prognosticated an immediate burst of the Chinese bubble, with a mega tonnage of more than 100 times of our housing bubble.  The argument was promptly defused. After all, China doesn’t borrow money. They lend it. Mostly to the U.S.

Then, commentator ra_pro rolled out the really big ordnance: “As I said many times previously: Demography is Chinese destiny as it is Japan’s.” If people would only stop prattling on about demographics, and would check their data first.

Kindly compare age distribution Japan 2020 with age distribution China 2020.

For a real shock, compare age distribution Japan 2050 with age distribution China 2050.

For added spice, factor in that the last Chinese census (it was taken in 2000 and never really finished) is considered as deeply flawed.

Conservative estimates say that around 200m people are living off the books in China, more than the whole population of Japan.

A huge chunk of children have not been reported at all, wrote Daniel M. Goodkind of the U.S. Census Bureau. A correct count of births is the lifeblood of demographic projections. If you miss more than a quarter of the children born in any given year, your projections will be off by 25 percent for generations to come.

Not to worry: If China has something in abundance, then it’s people.

The population bomb turning out as a dud, the sustainability squadron was launched: “There isn’t enough space, water, air or oil to sustain Chinese expansion of 20 million cars per year for a very long time,” quoth ra_pro.

Funny, when Americans bought 17m cars a year, where were the people who said “there isn’t enough space, water, air or oil to sustain expansion of 17 million cars per year for a very long time?” Actually, that number still is a wet dream in Detroit and DC. Our own Ed Niedermeyer pointed out in the New York Times: only if the “salad days of 2000″ are bested, the tax payer will ever have a chance to get his or her money back from GM. Dream on.

Now, for the really scary part. There are more than 800 cars per thousand people in the U.S., more cars than people with drivers’ licenses. In China, there are only some 76 cars per thousand in China. In most developed countries, the number is between 500 and 600 per thousand.

“They’ll never get there,” I hear someone say. “The poor farmers will ride bicycles and oxcarts forever.”

Not so fast.

In Poland 20 years ago, a car was something for the powerful party elite. Today (actually, by end of 2008) there are 420 cars per thousand in Poland.

So for when will we grant China the same standard of living (or at least driving) as the people in Poland? Many Chinese would object at this point. I have to go to Poland on occasion – not that I’m looking forward to it – and last time I was there, the mayor of a good sized town complained that they didn’t have the money to light the Christmas tree on central square. The local KTV in any Chinese village is an orgy of neon all year round.

420 cars per thousand, in China that comes out to a total of 550m cars on the road, if the 1.3b population is correct. Or 630m cars, if the more likely 1.5b population is right. Let’s stick with 1.3b pop and 550m cars, in order to avoid even more anxiety.

How many cars do Chinese have to buy to get to the level of Poland in a reasonable amount of time? Let’s ignore popular wisdom that Chinese cars fall apart the minute you drive them off the lot, and let’s assume a really low scrapping rate. To make calculation easy, let’s call it 500m more cars needed.

(Don’t hyperventilate. That’s only twice the number of cars on the road than in the U.S. and the U.S. has only 1/5th or so of the population of China.)

So how much time do we give China to reach the same standard of living (or driving) as Poland in 2008? 10 years? (Many Chinese would loudly object.) That’s 50m cars per year. Yes, 50,000,000.

You think that’s impossible? Ok, then let’s give the Chinese 20 years to catch up with Poland. (Many Chinese would take to the streets at this point, something the Chinese government really would not appreciate.) That’s 25m cars per year.

Still impossible?

Hint 1: Beijing, a city of 17m people, already has 4m cars. 240 cars per thousand. Poland had 265 cars per thousand in 2000. Shanghai has so many cars that the city has to limit growth by auctioning off license plates. People want to drive so badly, that they pay more for a plate in Shanghai than for some new cars. By the way: The population of Beijing and Shanghai, added together, roughly equals the population of Poland.

Hint 2: A gallon of gas of dubious quality costs $4.45 in Beijing. Using the ever so popular purchasing power conversion, it would feel more like $8. (The junior secretary, who gave me the 8 RMB/liter rate, makes $300 a month – I’m no slave driver, it’s the going rate.) And nevertheless, they are buying cars like there is no tomorrow. An unsaturated market does that.

But what about the gasoline? Ecogeek.com, a publication definitely beyond suspicion of promoting worldwide wastage, recently pointed out: “The president of China’s Innovation Center for Energy and Transportation has said that Chinese officials are drafting new mileage standards that would require an 18 percent improvement in fuel economy by 2015. New cars in China already average about 35.8 mpg and under the new rules, would be required to get 42.2 mpg by 2015. The new U.S. standards require an average mgp of 35.5 by 2016.”

]]>
http://www.thetruthaboutcars.com/2010/02/the-china-syndrome-50-million-cars-a-year/feed/ 26
Sales Analysis Eye Candy: Market Segment Trends Charts http://www.thetruthaboutcars.com/2010/01/sales-analysis-eye-candy-market-segment-trends-charts/ http://www.thetruthaboutcars.com/2010/01/sales-analysis-eye-candy-market-segment-trends-charts/#comments Thu, 21 Jan 2010 18:54:25 +0000 http://www.thetruthaboutcars.com/?p=342586

]]>
http://www.thetruthaboutcars.com/2010/01/sales-analysis-eye-candy-market-segment-trends-charts/feed/ 11
Next Year’s Car Sales Will Be A Dud Again. Say The Japanese http://www.thetruthaboutcars.com/2009/12/next-year%e2%80%99s-car-sales-will-be-a-dud-again-say-the-japanese/ http://www.thetruthaboutcars.com/2009/12/next-year%e2%80%99s-car-sales-will-be-a-dud-again-say-the-japanese/#comments Fri, 18 Dec 2009 12:21:29 +0000 http://www.thetruthaboutcars.com/?p=339587 Just a few more turns and we’ll open her up. Picture courtesy etftrends.com

Come 2010, U.S. customers will storm the few remaining dealerships. GM will go public with a healthy pop that makes the taxpayer rich. The good old times will be back. The Japanese don’t think so.

The head of Japan’s auto-making lobby fears that the U.S. market will remain weak and will not reach total sales of 11mi vehicles next year, says Reuters. That and the strong Yen doesn’t bode too well for the Japanese car industry.

U.S. auto sales are expected to end with an annual sales rate of about 10.5 million units, the lowest level since the early 1980s. Led by the notorious CAR thinktank, Many are hoping, praying, and wishfully thinking that there will be at least a little blip next year. To, say, 11m to 12m units, or thereabouts. To which Japan, always with a keen eye on the U.S. market, says: “What have you been smoking?”

“I expect the U.S. market would be slightly better than this year, but there are fears that it won’t reach 11 million,” Satoshi Aoki, chairman of Honda and of the Japan Automobile Manufacturers Association (JAMA) said at a news conference.

Oh well. If all else fails, we’ll wait until the mystical 2012. Everything will be better in 2012.

]]>
http://www.thetruthaboutcars.com/2009/12/next-year%e2%80%99s-car-sales-will-be-a-dud-again-say-the-japanese/feed/ 34
Japanese Car Market Roaring Back To Life http://www.thetruthaboutcars.com/2009/12/japanese-car-market-roaring-back-to-life/ http://www.thetruthaboutcars.com/2009/12/japanese-car-market-roaring-back-to-life/#comments Tue, 01 Dec 2009 13:15:13 +0000 http://www.thetruthaboutcars.com/?p=337450 Wowowowo! Pictule courtesy pinktentacle.com

You have to hand it to the Japanese. They have their numbers down pat. Which country knows on December 1 how many cars they have sold in all of November? Japan does. And guess what: Sales of new cars and trucks in Japan rose 36 percent year on year to 293,410 units in November, says the Nikkei [sub], quoting numbers released by the Japan Automobile Dealers Association. And guess what again: This is the fourth straight month that Japanese car sales have been increasing. Hold on, there is more …

The numbers are even more jaw-drop-inducing when trucks are excluded: Sales of trucks fell 10.7 percent to 9,253 units in November.

In November, Nipponese passenger car sales jumped a whopping 43.8 percent to 268,450 units. 117,929 were standard-size models, up 45.5 percent, and 150,521 were compact vehicles, up 42.7 percent. Looks like the Japanese have refound their long lost love with the o-tomobiru.

]]>
http://www.thetruthaboutcars.com/2009/12/japanese-car-market-roaring-back-to-life/feed/ 14
China’s Car Sales Down in October—To 80 Percent Growth http://www.thetruthaboutcars.com/2009/11/china%e2%80%99s-car-sales-down-in-october-%e2%80%93-to-80-percent-growth/ http://www.thetruthaboutcars.com/2009/11/china%e2%80%99s-car-sales-down-in-october-%e2%80%93-to-80-percent-growth/#comments Sat, 07 Nov 2009 18:19:16 +0000 http://www.thetruthaboutcars.com/?p=334424 Where are we going to put them? Picture courtesy laobserved.com

So used has the MSM become to China’s red hot car growth, that Reuters headlines the October sales report “Chinese car sales dip in October, but still robust.” China’s passenger vehicle sales clocked-in a year-on-year growth of 79.6 percent in October. In September, the growth was 83.62 percent, which serves as the reason for Reuter’s slight concern.

During the first 10 months of the year, Chinese passenger vehicle sales surged 52.4 percent over the same period last year to 8.08 million units, said Rao Da, secretary-general of the China Passenger Car Association, to China Daily. He’s less concerned than Reuters: “We are optimistic that the November figures would surpass that of October as sales normally peak toward the end of the year.” With the new data under their belt, the industry association expects “full-year automobile sales to touch 13.5 million with a year-on-year growth rate of 44 percent.” Stating the obvious, Rao said this would make China the world’s largest automobile market for the whole year.”

And in the next: If the government will continue its stimulus package for the automobile industry, the growth rate for the 2010 could reach 25 percent, Rao figures. That would mean more than 16m units in China for 2010, a number the US reached in its heydays. The Ministry of Industry and Information Technology said the government is considering extending the favorable tax policies into the next year.

]]>
http://www.thetruthaboutcars.com/2009/11/china%e2%80%99s-car-sales-down-in-october-%e2%80%93-to-80-percent-growth/feed/ 11
GM: China Will Lead The World For A Long Time http://www.thetruthaboutcars.com/2009/10/gm-china-will-lead-the-world-for-a-long-time/ http://www.thetruthaboutcars.com/2009/10/gm-china-will-lead-the-world-for-a-long-time/#comments Thu, 29 Oct 2009 05:42:36 +0000 http://www.thetruthaboutcars.com/?p=333448 We’ll whip your butt. Picture courtesy miquelmartin.org

China will lead the U.S. as the world’s biggest auto market for a “long time,” (if not forever.) This assessment doesn’t come from the Chinese propaganda machine. Nick Reilly, GM’s head of international operations, thinks China is too far ahead of the U.S. and demand will grow next year, Bloomberg reports.

Reilly sees  vehicle demand in China increase to more than 13 million units next year from about 12.5 million in 2009. “I don’t see the U.S. being anywhere near that,” Reilly said.

China’s car sales have risen more than 35 percent for six straight months, including a 90 percent jump in August.  GM doubled its September sales in China to 181,148 vehicles. GM sold 1.29 million units in the first nine months of this year, more than its tally for all of 2008.

Meanwhile, in response to public concerns about the rapidly growing Chinese auto output, China’s  Ministry of Industry and Information Technology (MIIT) said that the country’s car industry is not overheating, Gasgoo reports.

In view of China’s a large population, China’s total auto output is really not very high, said Zhang Xiangmu, director of MIIT’s equipment manufacturing industries division. “In terms of total vehicles produced and sold, China’s figure is not too high compared to the United States, Europe and Japan.”

He added that this year’s growth in sales can be attributed to the tax cuts for buying low-emission vehicles. The government’s stimulus measures to promote auto sales in rural areas also play an important role.

The tax cuts are scheduled to expire by end of December, but are highly expected to be extended to next year. The MIIT statement is an indicator in that direction.

]]> http://www.thetruthaboutcars.com/2009/10/gm-china-will-lead-the-world-for-a-long-time/feed/ 10