China’s monthly passenger-vehicle deliveries fell the most in more than seven years after an earlier-than-usual Lunar New Year holiday season deprived dealers of a week’s worth of sales.
Deliveries of passenger automobiles, including multipurpose and sport-utility vehicles, dropped 24 percent from a year earlier to 1.16 million units last month, the China Association of Automobile Manufacturers said yesterday in a statement. Sales were projected to drop 18 percent, according to the median of a Bloomberg News survey of five analysts who predicted declines ranging from 8.5 percent to 30 percent.
The slump follows Chinese government estimates that holiday sales at the nation’s main retailers and restaurants rose at their slowest pace since the 2009 financial crisis, adding to signs the world’s second-largest economy is cooling. Carmakers from General Motors Co. to Ford Motor Co. are counting on a rebound in February as they rely on China, the world’s biggest auto market, to help drive earnings this year.
“Even though the actual holiday was five working days, some dealerships took the opportunity to close their stores for a longer time,” said Ran Fei, an analyst with Great Wall Securities Co. in Shenzhen. “The numbers are disappointing.”
Worst Drop in Years
January’s drop was steeper than the previous record set almost seven years ago, when February sales declined 23 percent because the holidays occurred in January the preceding year, according to CAAM data stretching back to 2005. The auto group has forecast deliveries will rise 9.5 percent this year. The Lunar New Year -- also observed in South Korea, Singapore, Malaysia and Vietnam -- typically falls in early February.
German and U.S. carmakers gained 1.7 percentage points and 1.5 percentage points, respectively, in market share last month at the expense of Chinese and Japanese brands, according to CAAM’s statement yesterday. Volkswagen’s Passat sedan was the top-selling sedan model in January, ahead of GM’s Buick Excelle, Chevrolet Cruze and Sail, according to CAAM.
Consumer demand may be slowing. Holiday retail sales on the Chinese mainland grew 16 percent to 470 billion yuan ($75 billion), or 3 percentage points below last year’s increase, according to preliminary government data released by the Ministry of Commerce.
Growth in total auto sales, including those of commercial vehicles, will probably accelerate to 8 percent this year after slowing to 2.5 percent in 2011, according to CAAM. Deliveries last year slowed from 32 percent in 2010 after the government withdrew a two-year package of tax breaks and rebates that helped the country overtake the U.S.
Slower Than U.S.
Vehicle sales growth in China last year lagged behind the U.S. for the first time in at least 14 years, according to figures from the Chinese industry group and U.S. researcher Autodata Corp.
Total vehicle sales fell 26 percent to 1.39 million units last month, according to CAAM. Sport-utility vehicle sales declined 12 percent to 126,300 units, while minivans -- used to ferry goods and people -- slid 24 percent to 200,300 units. Commercial vehicles, a category that includes buses and trucks, tumbled 37 percent to 229,200 units.
“The January numbers aren’t pretty, but they’re still normal” because of the fewer working days, Dong Yang, deputy head of CAAM, said at a briefing in Beijing yesterday. “We haven’t yet spotted anything special or abnormal.”
Some analysts agreed with Yang in saying that concerns over the January figures may be premature.
“Demand is still there and consumers in the smaller, less developed cities will still have a growing need for cars,” said Chen Liang, an analyst with Huatai Securities Co. in Nanjing. “These numbers don’t change my outlook for the year.”
GM, the world’s largest automaker, this week reported its first drop in China sales in six months, with deliveries declining 8 percent to 246,654 units. Chevrolet-brand sales fell 20 percent to 54,399 units, while deliveries of Wuling vehicles -- commonly used for transporting both people and merchandise -- dropped 14 percent to 106,573.
Ford’s China sales fell 42 percent last month to 30,976 vehicles, the company said.
Luxury carmakers Bayerische Motoren Werke AG and Volkswagen AG’s Audi posted higher sales, bucking the industrywide decline.
BMW sales in China rose about 30 percent to 25,000 vehicles, said Mathias Schmidt, a spokesman for the Munich-based company, citing preliminary figures. Audi deliveries gained 23 percent to 27,206 vehicles, the company said in a statement.
“Prior to the Chinese New Year, Chinese consumers who are looking to enhance their prestige and status symbol have chosen high-end luxury brands,” Namrita Chow, Shanghai-based analyst at IHS Automotive said.
China’s Passenger Car Association, which competes with CAAM in providing automotive statistics, said this week it expects sales to rise 30 percent in February after falling 16.5 percent last month because of the holiday distortion.
“Car demand is stable,” said Great Wall’s Ran. “There’s no indication of any changes on that front.”