Sales of locally‐produced passenger vehicles during January in China tallied 2.26 million, a 9% gain on the same period of last year, but one that has analysts worried. Light commercial vehicles followed the same pattern of preceding months, with a decrease in January of 12% in year‐over‐year numbers of 320,000 units. Consultancy LMC Automotive says that the main factor in what it says is a weak the January result was de-stocking at dealers.
If growth rates in the Chinese auto economy keep slowing, it means trouble for Ford Motor and General Motors, given their large investments in China and reliance on profits from the world’s largest auto market. U.S. automakers typically book revenue when vehicles are shipped, not sold. GM made $2.1 billion in China during 2014 – out of a $6.5 billion total – with a leading14.8% share.
According to the Chinese Automobile Dealer Association, or CADA, dealer inventory index stood at 1.2 months at the end of January, or 0.23 months higher than in January 2014. At the end of December 2014, this index reached 1.53 months, or 0.53 months higher in y-o-y terms.
LMC says that this means ~200,000 units of reduced inventory in January 2015. Japanese makers have led the ongoing de-stocking process as a way of compensating for the spike in wholesale deliveries last December. The result is a drop in the Japanese brands’ share of the overall Passenger Vehicle market to 12% in January versus 19% in December of last year and 17% in the final quarter of 2014. As well as the Japanese makers, Hyundai‐Kia and GM demonstrated similar falls in market share, albeit to a lesser extent.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
