China's Sales Growth Slows. TTAC Sales Oracle Right Again
Approximately 1 million passenger cars (including MPVs, SUVs, and Minivans) changed hands in China in May, up 23.2 percent from a year earlier, the lowest rate during the past 13 months. That according to the China Passenger Car Association, as reported in China Daily. This is not yet the total vehicle count, which should be reported by the CAAM a few days later. The passenger car number usually is within a few points of the CAAM number. Is that good or bad?
As the picture on the left shows, the red-hot sales growth in China is slowing down. As we said before, it has to. We are comparing with near pornographic sales growth in the previous year. Anything more would be blowing up circuit breakers. Also, we note that again, TTAC’s patent-pending China sales forecast model has been vindicated. Despite GM’s attempts to throw us a curve ball. We calculated GM’s growth at 25 percent, and TTAC’s Growth-O-Meter (“GM minus a few”) is once more right on the money: It had said “China in the low 20s.”
Rao Da, secretary-general of the China Passenger Car Association, predicts that June will most likely be a repeat of May. He was quick to blame “the week-long production stoppage in Honda’s parts plant that ate into sales figures.” Come on …
Hu Maoyuan, chairman of China’s biggest automaker SAIC Group, cut his prediction for whole-year sales to 15.5 million units, with sales growth of 12.6 percent. Other analysts still stick with 20 to 25 percent growth this year, which would translate into 16 to 17m units for the year.
China’s automakers will boost their production capacity by 5 million units in total this year, bringing domestic auto production for the whole year close to 20 million units. That would be a 75 to 85 percent capacity utilization, quite healthy for China. Can’t say that for the folks in the video.
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.
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it's not just the cars; the person on the bike at 2:00 is a complete idiot
The licensing laws in China are very lax, where driver testing can be 'hurried along' by providing 'appropriate funds' to the tester. People who drive just a few days can get a full license. Chinese licenses are not recognised in some countries as being equivalent quality to their own for very good reasons. I have seen fully licensed Chinese drivers be confused by intersection give way rules. They would drive out into the intersection (and into the path of oncoming cars) and then decide where they wanted to go. Scary.