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.
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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