China In April 2011: Down!

Bertel Schmitt
by Bertel Schmitt
We’re committed to finding, researching, and recommending the best products. We earn commissions from purchases you make using links in our articles. Learn more here
china in april 2011 down

Our patent pending GM China sales oracle saw it coming: GM China was down in April, therefore, the whole Chinese market had to be down in April. And so it was – by a hair: April new vehicle sales in China were down 0.25 percent, the China Association of Automobile Manufacturers announced at a press conference on Tuesday afternoon. This is the first decline in 27 months.

1.55 million units changed hand is April. 1.14 million units were passenger vehicles. That part of the industry is up 2.79 percent. Only 409,700 commercial vehicles were sold in April, down 7.84 percent.

This trend had also been indicated by our GM China sales oracle: While GM China’s passenger vehicle sales were up, its commercial sales were way down. With half of its volume commercial, GM China has a much higher exposure to the slow selling “breadvans”. This is reflected in the fact that GM China was down 4.6 percent in April, while the total market was down only 0.25 percent.

A lot of people are concerned about the Chinese economy, some even genuinely. They are looking in all the wrong places. They should look at commercial vehicle sales. These are usually regarded as a leading indicator of economic vitality. When truck sales go up, it’s because economic growth goes up. Then, car sales follow as a lagging indicator. The reverse is also true. Trucks are bought when they are needed, and avoided when they are not needed. Commercial sales have been weak for several months now in China. A loss of nearly 8 percent in the commercial department is a cause for concern.

At the press conference, the usual suspects were fingered as responsible for the decline: The cancelled incentives – and of course the supply chain interruptions from Japan. “We still can’t get detailed reports from Japan about the parts disruption, so we need more time to estimate the earthquake’s impact on China’s auto industry, but we did get reports from all Japan car makers about their production suspension in China,” said Secretary General Dong Yang. From what I am hearing, impact of the Japanese parts paralysis on Chinese production had been relatively minor.

In the January-April period, overall auto sales grew 5.95 percent from a year earlier to 6.53 million units, while passenger vehicles sales rose 7.55 percent to 4.99 million units.

4 months into the year, Dong Yang opined that annual growth could be less than the 10 to15 percent previously envisaged.

Bertel Schmitt
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=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

More by Bertel Schmitt

Join the conversation
  • Cmoibenlepro Cmoibenlepro on May 10, 2011

    The lottery system in Beijing do not help slowing sales. When people are not even allowed to purchase cars in the capital, you can't expect people to buy more cars.

    • Charly Charly on May 10, 2011

      They can still purchase them, just not drive them. And it is not the only capitol in which buying the right to drive is a big problem

  • Alluster Alluster on May 10, 2011

    China sales are down for both GM and Toyota in April. GM is down to 203,367 from 213,115 in April 2010 . Toyota is down 23% to 48700 from 63,000 in April 2010. For the first four months, GM is up 8% (888,950), Toyota is up 6% (256,700) and total auto sales in china are up 6%.

  • FreedMike I suppose that in some crowded city like Rome or Tokyo, there's a market for a luxurious pint-size car. I don't think they'll be able to give them away here in the U.S.
  • TMA1 How much did exchange rates affect this decision? The Renegade is imported from Italy. I'm wondering if that's what caused the price to reach within a few hundred of the much bigger Compass. Kind of a no-brainer to pick the larger, more modern vehicle.
  • CEastwood Everytime I see one of these I think there's a dummie who could have bought a real car , but has to say look at me driving this cool thing I can't drive in the rain like an actual motorcycle that I should have bought in the first place ! It's not Batman I see driving these - it's middle age Fatman .
  • SilverCoupe I should be the potential audience for this (current A5 owner, considering an S5 in the future), but I can't say it excites me. I have never liked the vertical bars in the grilles of sporting Mercedes models, for one thing. The interior doesn't speak to me either.I would be more likely to consider a BMW 4 Series, though not the current version with the double Edsel grille. Still, I suppose it would be worth a look when the time comes to replace my current vehicle.
  • Verbal Can we expect this model to help M-B improve on finishing 29th out of 30 brands in CR's recent reliability survey?