Auto sales in China have weakened driven by a territorial
dispute, sluggish economy and stringent government policy on
vehicle registration. According to China Association of Automobile
Manufacturers (CAAM), sales of passenger vehicles fell 1.8% year
over year to 1.62 million units in the country in September.
Sales of Japanese automakers plunged during the month triggered by
the conflict between Beijing and Tokyo over a group of uninhabited
islands in the East China Sea that led buyers to avoid purchasing
Among the major Japanese automakers,
Toyota Motor Corp.
) sales plummeted 48.9% to 44,100 units;
Nissan Motor Co.
) sales tumbled 35.3% to 76,066 units;
Honda Motor Co.
) sales nosedived 40.5% to 33,931 units. Among others, Mazda Motor
Corp. sales dipped 35%, Mitsubishi Motors Corp. sales went down 63%
and Suzuki Motor Corp. sales declined 43% in the month.
Among the major foreign automakers,
General Motors Company
) sales went up a meager 1.7% to 244,266 vehicles. GM operates
joint ventures with China's FAW Group and SAIC Motor Corp.
Ford Motor Co.
) posted impressive sales growth in September. Ford sales surged
35% to 59,570 vehicles while Volkswagen's luxury unit Audi sales
went up 20.5% to 35,512 vehicles during the month.
Auto sales in China had grown at a double-digit pace since 1999,
except in 2008 when the global economic crisis crept in. In 2009,
China overtook the U.S. as the biggest auto market in the world by
sales volumes when the Beijing government introduced a stimulus
package, including tax incentives for small cars with engine sizes
of 1.6 litres or smaller.
However, the incentives were scrapped last year and the Beijing
government imposed quotas on new car registrations in order to
control the traffic congestions. As a result, new car deliveries
plummeted 56% to 403,500 units in 2011.
Nevertheless, China's automotive industry outlook is promising in
2012. According to CAAM, passenger car sales in 2012 is expected to
grow by 9% in the country, which is much higher than 2011 (2.5%).
FORD MOTOR CO (F): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
HONDA MOTOR (HMC): Free Stock Analysis Report
NISSAN ADR (NSANY): Free Stock Analysis Report
TOYOTA MOTOR CP (TM): Free Stock Analysis
(VLKAY): ETF Research Reports
To read this article on Zacks.com click here.