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China Sees Weak Auto Sales - Analyst Blog

Light vehicle sales in China went up a tad 0.3% to 1.34 million units in November due to an unfavorable year-over-year comparison. Sales were strong in November last year when buyers rushed to showrooms before the end of government tax incentives. Meanwhile, total vehicle sales slid 2.4% from a year earlier to 1.66 million units.

During the first 11 months of the year, passenger car sales inched up 5.3% to 13 million units. However, total vehicle sales, including trucks and buses, increased a tad 2.6% to 16.8 million units.

Auto sales in China surged during 2009 and 2010, driven by subsidies and tax cuts by the government. The incentives were intended to help the industry recover from the global economic meltdown. In 2010, sales soared 32% to 18 million vehicles. Due to the termination of the incentives, sales growth is likely to be the weakest for 2011 in a decade.

SAIC-GM-Wuling, a joint venture operated by General MotorsCo. ( GM ), SAIC Motor Corp and FAW Group, sold 237,130 units. This is a whopping 40% rise from the year-ago level driven by strong demand for mini-vehicles. Meanwhile, SAIC's joint venture with Volkswagen AG ( VLKAY ) sold 100,916 cars during the month, up 1.7 percent on a year-over-year basis.

Sales at Ford Motor Co. ( F ) ebbed 7% to 43,338 vehicles from the prior year. The decline in sales was mainly attributable to a 19% fall in sales to 13,721 vehicles in November by Jiangling Motors Corp., the automaker's commercial-vehicle joint venture in China.

In contrast to China, light vehicle sales in the U.S. escalated 10.6% to seasonally adjusted annual rate (SAAR) of 13.6 million units in November from 12.28 million in the same month of 2010 while total deliveries went up 13.9% from the year-ago level. November was the third straight month when annualized vehicle sales have topped 13 million mark.

The SAAR of 13.6 million units is also the highest sales rate since August 2009 when the U.S. government launched the "Cash for Clunkers" trade-in incentive program. It is also a significant increase from 12.6 million units for the first 10 months of the year. The improvement was attributable to pent-up consumer demand in the country.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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