The Truth About Cars » March 2011 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 16 Jul 2014 04:01:57 +0000 en-US hourly 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 (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 » March 2011 China In March 2011: Up 5.36 Percent Sun, 10 Apr 2011 15:10:39 +0000

Beijing’s war on the ICE notwithstanding, auto sales in China rose by 5.36 percent in March. That is the headline from a Sunday afternoon press conference held by the China Association of Automobile Manufacturers (CAAM). More than 60 journalists were poised to report that for the first time any of them could remember, the Chinese market did sink. But it went the other way. Still up.

In March, a total of 1,828,500 vehicles changed hands in China. For the first quarter, sales were 4,983,800 for an increase of 8.08 percent. (And not 4.98 percent, as AFP erroneously reports.) Production for the first quarter stands at 4,895,800 units for an increase of  7.48 percent.

Passenger vehicle sales still run at a healthy clip, up 6.52 percent in March to 1,347,600 units. For the first three quarters, passenger vehicle sales are up 9.07 percent. (All percentages compared to same period in the previous year.)

Dong Yang, executive vice president and secretary-general of the CAAM, blamed the slower growth rates on the oil price hike, the expiration of tax incentives, auto purchase restrictions in cities like Beijing, and lastly the Japanese earthquakes.

In my humble opinion, the market is simply taking a breather after the record 32 percent run-up to more than 18 million units in 2010. There was a pull-forward effect in the sub 1.6 L class, which still dominates the market. This effect needs to be digested. I had expected a slight decline in Q1. The 18 million Chinese market is intact and it looks like 20 million by year’s end.

What may be in need of service is our patent pending TTAC Chinese market sales oracle. In March, GM China’s sales rose only 1.9 percent across all joint ventures, under-performing the market.  But let’s give our oracle a break: For the first quarter, GM China’s sales were up 10 percent, whereas the market rose 9 percent. The oracle is doing alright. A little oil, and it will be fine.

In related news and pursuant to our yesterday’s story on the Chinese license plate roulette, Xinhua reports today that “a total of 491,671 people in Beijing had applied for the monthly lottery of 17,600 license plates for April, which means only one out of 28 will turn out to be winners.” 111,728 new applicants mix in with the luckless from the previous months. If this trend continues, in June your chances of winning a Straight Up in roulette will be better than your odds of winning a license plate in Beijing.




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Germany In March 2011: Steady Now Tue, 05 Apr 2011 20:57:50 +0000

The German new car market grew a nice 11.4 percent in March. For the first quarter of 2011, the German market is up by 13.9 percent. This according to monthly registration statistics, released by Germany’s Kraftfahrtbundesamt. The picture above however says more than the 306 words of this article.

In 2009 (blue line), the cash for clunker or Abwrackprämie drove German sales to heights never seen before. In 2010 (red line), the hangover followed. However, the pull-forward effect in 2009 was only slight, and 2010 sales were only slightly below pre-crisis level. Now, in March 2011, Germany is well above pre-crisis levels. March is a strong sales month in Germany, and the 327,821 units sold bode well for the year.

Brand-wise, you will see a lot of green when you download the detailed statistics. Volkswagen leads as always, its market share stands at 20.3 percent. Buyers of Ford and Opel cars in Germany thankfully do not read the Freep, they have heard nothing of the alleged perception gap and bought Fords and Opels with abandon. Ford sales grew 22.7 percent in March, those of Opel rose 15.8 percent. Opel (8.2 percent) commands a slightly higher share of the German market than Ford with 7.5 percent. Big is still beautiful, Mini stands for minimized sales.

The KBA is keeping track of hybrids and plugins now. 3,807 changed hands in the first quarter. Our TTAC sliderule says this is a share of 0.5 percent . That’s for hybrid and plugins, they don’t break them out separately. All those who think that at prices above $4, people will fuel from the wall socket instead from the pump take note: Even $8 per gallon and higher don’t turn Germans into converts.

All data available as download here.

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As Goes GM, So Goes China. Where Do They Go? Sat, 02 Apr 2011 16:59:09 +0000

In the (OMG) 7 years I have lived and worked in China by now, I have learned not to take the first two months of the year all too seriously. After all, according to the Chinese calendar, the first two months mostly belong to the old year. Chinese New Year  is some time in late January or early February, depending on the inscrutable lunar calendar. The nearly month long festivities mess up sales, and make comparisons pretty much useless. Confucius say: “Only the stupidest of men make predictions based on January sales.”

March is a different matter.  It’s the first “regular” month of the new year. Everybody is waiting for March sales results in China. We’ll have to wait at least a week or so until the CAAM is done tabulating the sales of the 60 to 120 automakers in China (even that number remains shrouded in mystery.) But there is our trusted indicator: GM China.

GM reports “new domestic sales records for the month of March and the first quarter of the year.”  The real numbers are less dramatic than the headline.  In the first quarter of the year (according to the Western calendar),  GM sales in China rose to 685,583 units, up 10.0 percent from a breathtaking first quarter in 2010. Confucius say: “When looking at growth numbers, always look at the prior year period first.”

GM China’s growth rate in March was … wait a minute, GM’s press release abandons the time-pressed journo on that one, banking (not without reason) on the laziness and inability to calculate percentages. Oh, well. Off to the archives. March 2010 sales were 230,048 units. GM China’s March 2011 sales totaled 233,014 units. According to TTAC’s abacus, that’s a growth of a whopping 1.29 percent. No wonder that’s being kept under wraps.

No abacus needed for “GM’s flagship joint venture, Shanghai GM.” According to the press release, it “sold 99,589 vehicles in China in March, an increase of 14.5 percent year on year and a record for the month.”

Moving on to “SAIC-GM-Wuling, GM’s mini-commercial vehicle joint venture,” the release makes us work again. It only discloses “domestic sales of 125,247 vehicles in March.” No percentages. Off to the dusty archives we go. In March 2010, Wuling had sales of 129,489 units. Our abacus calls that a loss of 3.28 percent. No wonder they tried to hide THAT.

GM China’s 2011 March, compared to the March of last year

Mar-10 Mar-11 Growth
GM Overall 230,048 233,014 1.3%
Shanghai GM 86,967 99,589 14.5%
SAIC-GM-Wuling 129,489 125,247 -3.3%
Buick 47,533 55,025 15.8%
Chevrolet 46,139 49,234 6.7%
Cadillac 1413 2,030 43.7%

As goes GM, so goes the Chinese nation. In February, GM was up 5.8 percent, and the overall market was up 4.57 percent.  Looking at the new GM numbers, the overall market might show zero growth, or even a small decline for March.

GM’s losses at Wuling presage losses in the small displacement market, which is dominated by Chinese brands. GM’s gains in the upper segments presage a healthy future for the larger displacement joint venture makes.

In that vein, Toyota just announced (via Reuters) that its sales in China rose 37.4 percent in March to 84,000 units, and 16.3 percent in the first quarter to 208,000 units. Don’t think Toyota is insignificant in the Chinese market. As brands go, Toyota is #3 behind Volkswagen and Hyundai, says J.D. Power in their monthly Executive Summary. Then comes Nissan in #4, followed by Chevrolet and Buick in #5 and #6. Let’s see what the other majors report within the next few days, and we will have a pretty good grip on the market.

If the overall Chinese market comes in with only a tiny gain or a slight loss, undoubtedly the end of the huge Chinese growth will be announced. Confucius say: “Those who get ahead of themselves will stumble in their own footsteps.” Once the pull forward effect that had brought huge gains last November, and December has worked itself out of the market, China will be back in the double digits, albeit low double digits. Keep in mind: 18.06 million last year plus a sedate 15 percent growth would mean nearly 21 million this year.

J.D. Power’s “forecast for this year and the following years remains unchanged as we believe China’s economy will continue to develop and the strong demand in the inland cities will continue.” The Shanghai based firm thinks that “strong momentum will continue and double-digit growth is still expected.”

In a way, that good forecast is not good for China. As J.D. Power’s data show, the Chinese market is highly fractionalized.  20 brands make for 67.3 percent of the passenger vehicle market. Volkswagen, itself spread across two joint ventures, holds the top spot with 12.8 percent.  A large pack of the following field has between 5 and 6 percent market share. 32.7 percent of the market are spread across a huge number of largely unknown automakers. The size of this number is equally unknown.

What China needs is a drastic treatment of six months of double digit losses, which would cause a surrender of the smaller players and will lead to 10 or 15 larger and more competitive players. However, these six months of double digit losses are nowhere near on the horizon.

J.D. Power: China’s leading passenger vehicle brands

Feb Growth YTD Growth YTD Share
1 Volkswagen 102,090 27% 276,137 37% 12.8%
2 Hyundai 53,252 37% 129,430 23% 6.0%
3 Toyota 47,495 -19% 124,286 -5% 5.8%
4 Nissan 45,350 10% 122,702 20% 5.7%
5 Chevrolet 44,122 10% 112,952 25% 5.2%
6 Buick 40,304 46% 110,667 48% 5.1%
7 Honda 41,365 -6% 107,071 4% 5.0%
8 Chery 30,110 -8% 103,575 15% 4.8%
9 BYD 26,521 -22% 78,575 -18% 3.6%
10 Kia 26,139 5% 67,349 11% 3.1%
11 Great Wall 22,373 23% 61,699 47% 2.9%
12 FAW 17,791 4% 57,156 14% 2.7%
13 Suzuki 25,340 4% 56,806 0% 2.6%
14 Ford 19,192 -1% 51,170 5% 2.4%
15 Chana 21,594 31% 47,024 22% 2.2%
16 JAC 16,070 14% 46,117 19% 2.1%
17 Skoda 16,865 45% 42,180 45% 2.0%
18 Geely 15,824 -19% 41,098 -16% 1.9%
19 Citroen 16,043 5% 40,492 0% 1.9%
20 Mazda 12,363 -18% 33,395 -7% 1.6%
Total Passenger Vehicles 813,753 9% 2,153,405 16% 67.3%

J.D. Power: China’s leading commercial vehicle brands

Feb Growth YTD Growth YTD Share
1 Wuling 95,499 -4% 220,011 3% 24.5%
2 Chana 69,408 -24% 160,013 -17% 17.8%
3 Dongfeng 47,363 41% 109,565 60% 12.2%
4 Foton 39,088 24% 81,767 10% 9.1%
5 Jinbei 18,730 27% 38,439 12% 4.3%
6 JAC 16,811 14% 37,795 13% 4.2%
7 Hafei 9,176 -40% 23,617 -33% 2.6%
8 JMC 8,906 39% 23,324 37% 2.6%
9 FAW 12,346 -9% 23,064 -32% 2.6%
10 Great Wall 7,967 35% 19,349 49% 2.2%
Total Commercial Vehicles 395,551 1% 899,480 3% 32.7%

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J.D. Power Predicts Strong March, Sees Production Trouble Ahead Thu, 24 Mar 2011 15:51:57 +0000

J.D. Power sees a strong March in its crystal ball, powered by real-time transaction data of 8,600 retail franchises throughout the United States. However growth is expected to be much more sedate than the 27 percent jump in February.

In its March forecast, J.D. Power expects total light-vehicle sales for March to come in at 1,205,200 units, 9 percent higher than in March 2010. Fleet sales in March are expected to decrease to 213,000 units, “based on the expectations that Japanese manufacturers will reduce fleet sales and channel that volume to the retail market, due to concerns about inventory shortages.”  J.D. Power projects the March SAAR at 12.7 million units. They keep their forecast for total vehicle sales at 13 million units, up 13 percent from 2010.

Power sees near-term production to be impacted by parts shortages caused by the earthquake and tsunami crisis in Japan. “With the uncertainty remaining high about the full extent of the parts supply situation, North American production could be impacted in the weeks to come,” said Jeff Schuster, executive director of global forecasting at J.D. Power. “However, our 2011 production forecast remains at 12.9 million units, as we expect any lost volume would be made up later in the year.”

J.D. Power and Associates U.S. Sales and SAAR Comparisons

March 20111 February 2011 March 2010
New-vehicle retail sales 991,900 units
(12% higher than March 2010)2
785,698 units 849,735 units
Total vehicle sales 1,205,200 units
(9% higher than March 2010)
991,576 units 1,064,072 units
Retail SAAR 10.9 million units 11.1 million units 9.3 million units
Total SAAR 12.7 million units 13.4 million units 11.7 million units
1Figures cited for March 2011 are forecasted based on the first 17 selling days of the month.
The percentage change is adjusted based on the number of selling days (27 days vs. 26 days one year ago).
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