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The market continues to fall and car companies are pushing for inventory

Translation 10:12:56AM Jun 13, 2019 Source:Daily economic news

SMM News: the car market in May continued to cool, a number of car sales fell sharply.

Car sales reached 1.913 million in May, down 16.4% from a year earlier, compared with 10.266 million in the first five months of this year, down 13.0% from a year earlier, according to data released by the China Association of Automobile Manufacturers on June 12. Of these, passenger car sales in May were 1.561 million, down 17.4 per cent from a year earlier, compared with 8.399 million in the previous month, down 15.2 per cent from a year earlier.

It is worth noting that new energy vehicles, which have been surging in sales, have also begun to brake. In May, sales of new energy vehicles were 104000, up just 1.8 per cent from a year earlier. In the first five months of this year, new energy vehicle sales were 464000, up 41.5 per cent from a year earlier. Previously, the average monthly sales of new energy vehicles had roughly doubled.

Sales of a number of car companies have fallen by more than double digits

Judging from the sales performance in May, sales of a number of car companies fell sharply.

Changan Group sales fell 34.7% in May, SAIC Group (24.740,0.000.00%) sales fell by more than 15%, Dongfeng Group sales also fell by more than 10%, Geely Automobile fell nearly 30%, while Great Wall Motor (8.810,0.000.00%) stopped rising and fell, and sales fell by double digits in May.

In the first five months of this year, the top 10 companies in terms of car sales were SAIC, Dongfeng, FAW, BAIC, GAC, Changan, Geely, Great Wall, brilliance and Chery, according to data released by the CAAC. Compared with the same period last year, sales of Great Wall and brilliance increased slightly, while other enterprises showed a downward trend, led by Changan and SAIC. From January to May, the above 10 enterprises sold a total of 9.152 million vehicles, accounting for 89.2 per cent of the total car sales.

Independent brands were most affected by the impact of the car market. In the first five months of this year, Chinese brand passenger car sales totaled 3.335 million, down 23.4 percent from the same period last year, accounting for 39.7 percent of the total passenger car sales, and the share was 4.2 percentage points lower than the same period last year. On the other hand, German, Japanese, American, Korean and legal systems sold 1.955 million, 1.786 million, 805000, 386000 and 61000 passenger vehicles, accounting for 23.3, 21.3, 9.6, 4.7 and 0.7 per cent, respectively. Compared with the same period last year, Japanese brand passenger car sales increased slightly, other foreign brands showed a decline, legal system fell by more than 60%.

The overall performance of Japanese cars is still good, especially the Honda Department maintained double-digit growth compared with the same period last year. Dongfeng Honda's sales rose 40.9 per cent year-on-year in May and 25.3 per cent year-on-year in the previous five months. GAC Honda's sales rose 25.1 per cent year-on-year in May and 18.3 per cent year-on-year in the previous five months. The Toyota system also continued to grow, but not by much. Sales at Nissan, Mitsubishi and Mazda fell.

CAA believes that from the completion of production and marketing data in May, the overall downward trend of production and marketing in the industry has not been effectively alleviated. On the one hand, the momentum of consumption has not been effectively improved, on the other hand, production enterprises take the initiative to slow down the pace of production and marketing, reducing the pressure on the end market. Affected by the downward pressure of the macro-economy and the early implementation of the sixth emission standards in some areas, automobile production and marketing is still in low operation. In the second half of the year, with the continuous increase of models in line with the sixth National Standard, as well as the continuous effectiveness of a series of policy measures such as tax reduction and fee reduction, in particular, in early June, the National Development and Reform Commission, the Ministry of Ecological Environment, and the Ministry of Commerce jointly promulgated the implementation Plan for promoting the Renewal and upgrading of key Consumer goods (2019-2020), which brought about a relatively positive role for the passenger car market. Production and sales of new energy vehicles will also continue to maintain rapid growth.

Loss of inventory leads to disarray of selling prices

As a result of the downturn in the car market and the imminent implementation of the sixth National Standard in some areas, dealers are stepping up efforts to clean up inventories. Data released by the Federation showed that factory inventory fell by 69000 units in May, while channel inventory fell by 84000 units. The large decline in channel inventory is mainly due to the implementation of the sixth country in the face of the regional emergency policy, manufacturers timely ease the pressure on dealers to purchase goods, to achieve accelerated inventory digestion of the general mobilization. Retail performance improved in May as a result of increased inventory liquidation, with its narrow passenger car retail 1.582 million units down 12.5 per cent from a year earlier, but up 4.8 per cent from April, the strongest month-on-month performance ever.

The dealer composite inventory coefficient was 1.65 in May, up 4 per cent from a year earlier, but down 18 per cent from a month earlier, according to a survey released by the China Automobile Circulation Association. The China Automobile Circulation Association says provinces, which account for nearly 2/3 of the country's sales, will implement the national six emission standards ahead of schedule on July 1, and these areas will be cleared in May. On the other hand, the inventory coefficient of the areas without the implementation of the sixth standard is much higher than that in these areas where the sixth standard is implemented in advance. Some dealers in the areas that are about to implement the sixth standard will "transfer goods" to other areas by means of preferential promotion, which further increases the inventory in the areas where the sixth standard has not been implemented. In addition, due to the increased pressure to clear the warehouse, dealers are also more cautious to enter the car.

"due to the slow progress of the implementation of the sixth National Standards, the short time to clear the inventory and the heavy task, the dealers have made great efforts to clean up the inventory. Due to the market downturn, coupled with the impact of the current market country, five countries and six switching, each brand promotion means are various, each brand propaganda skill is different, produces certain trouble to the end consumer's consumption judgment and consumption decision-making, some potential consumers become more cautious. " Cui Dongshu, secretary-general of the Federation, said this would further trigger price instability caused by local Guofu's radical policies, which would not be conducive to a rise in sales in the car market in June.

At present, the local and central governments have issued some policies to stimulate the car market one after another. From June this year to 2020, Shenzhen will increase the index of increment of ordinary cars by 40, 000 a year, while Guangzhou will increase the quota of increment of 100000 small and medium-sized buses. In addition, the "implementation Plan for promoting the Renewal and upgrading of key Consumer goods and the smooth Recycling of Resources (2019-2020)" issued by the three ministries has adjusted the automobile consumption policy, requiring all localities not to impose traffic restrictions or purchase restrictions on new energy vehicles, and those that have been implemented should be abolished.

Key Words:  Cars  sales 

The market continues to fall and car companies are pushing for inventory

Translation 10:12:56AM Jun 13, 2019 Source:Daily economic news

SMM News: the car market in May continued to cool, a number of car sales fell sharply.

Car sales reached 1.913 million in May, down 16.4% from a year earlier, compared with 10.266 million in the first five months of this year, down 13.0% from a year earlier, according to data released by the China Association of Automobile Manufacturers on June 12. Of these, passenger car sales in May were 1.561 million, down 17.4 per cent from a year earlier, compared with 8.399 million in the previous month, down 15.2 per cent from a year earlier.

It is worth noting that new energy vehicles, which have been surging in sales, have also begun to brake. In May, sales of new energy vehicles were 104000, up just 1.8 per cent from a year earlier. In the first five months of this year, new energy vehicle sales were 464000, up 41.5 per cent from a year earlier. Previously, the average monthly sales of new energy vehicles had roughly doubled.

Sales of a number of car companies have fallen by more than double digits

Judging from the sales performance in May, sales of a number of car companies fell sharply.

Changan Group sales fell 34.7% in May, SAIC Group (24.740,0.000.00%) sales fell by more than 15%, Dongfeng Group sales also fell by more than 10%, Geely Automobile fell nearly 30%, while Great Wall Motor (8.810,0.000.00%) stopped rising and fell, and sales fell by double digits in May.

In the first five months of this year, the top 10 companies in terms of car sales were SAIC, Dongfeng, FAW, BAIC, GAC, Changan, Geely, Great Wall, brilliance and Chery, according to data released by the CAAC. Compared with the same period last year, sales of Great Wall and brilliance increased slightly, while other enterprises showed a downward trend, led by Changan and SAIC. From January to May, the above 10 enterprises sold a total of 9.152 million vehicles, accounting for 89.2 per cent of the total car sales.

Independent brands were most affected by the impact of the car market. In the first five months of this year, Chinese brand passenger car sales totaled 3.335 million, down 23.4 percent from the same period last year, accounting for 39.7 percent of the total passenger car sales, and the share was 4.2 percentage points lower than the same period last year. On the other hand, German, Japanese, American, Korean and legal systems sold 1.955 million, 1.786 million, 805000, 386000 and 61000 passenger vehicles, accounting for 23.3, 21.3, 9.6, 4.7 and 0.7 per cent, respectively. Compared with the same period last year, Japanese brand passenger car sales increased slightly, other foreign brands showed a decline, legal system fell by more than 60%.

The overall performance of Japanese cars is still good, especially the Honda Department maintained double-digit growth compared with the same period last year. Dongfeng Honda's sales rose 40.9 per cent year-on-year in May and 25.3 per cent year-on-year in the previous five months. GAC Honda's sales rose 25.1 per cent year-on-year in May and 18.3 per cent year-on-year in the previous five months. The Toyota system also continued to grow, but not by much. Sales at Nissan, Mitsubishi and Mazda fell.

CAA believes that from the completion of production and marketing data in May, the overall downward trend of production and marketing in the industry has not been effectively alleviated. On the one hand, the momentum of consumption has not been effectively improved, on the other hand, production enterprises take the initiative to slow down the pace of production and marketing, reducing the pressure on the end market. Affected by the downward pressure of the macro-economy and the early implementation of the sixth emission standards in some areas, automobile production and marketing is still in low operation. In the second half of the year, with the continuous increase of models in line with the sixth National Standard, as well as the continuous effectiveness of a series of policy measures such as tax reduction and fee reduction, in particular, in early June, the National Development and Reform Commission, the Ministry of Ecological Environment, and the Ministry of Commerce jointly promulgated the implementation Plan for promoting the Renewal and upgrading of key Consumer goods (2019-2020), which brought about a relatively positive role for the passenger car market. Production and sales of new energy vehicles will also continue to maintain rapid growth.

Loss of inventory leads to disarray of selling prices

As a result of the downturn in the car market and the imminent implementation of the sixth National Standard in some areas, dealers are stepping up efforts to clean up inventories. Data released by the Federation showed that factory inventory fell by 69000 units in May, while channel inventory fell by 84000 units. The large decline in channel inventory is mainly due to the implementation of the sixth country in the face of the regional emergency policy, manufacturers timely ease the pressure on dealers to purchase goods, to achieve accelerated inventory digestion of the general mobilization. Retail performance improved in May as a result of increased inventory liquidation, with its narrow passenger car retail 1.582 million units down 12.5 per cent from a year earlier, but up 4.8 per cent from April, the strongest month-on-month performance ever.

The dealer composite inventory coefficient was 1.65 in May, up 4 per cent from a year earlier, but down 18 per cent from a month earlier, according to a survey released by the China Automobile Circulation Association. The China Automobile Circulation Association says provinces, which account for nearly 2/3 of the country's sales, will implement the national six emission standards ahead of schedule on July 1, and these areas will be cleared in May. On the other hand, the inventory coefficient of the areas without the implementation of the sixth standard is much higher than that in these areas where the sixth standard is implemented in advance. Some dealers in the areas that are about to implement the sixth standard will "transfer goods" to other areas by means of preferential promotion, which further increases the inventory in the areas where the sixth standard has not been implemented. In addition, due to the increased pressure to clear the warehouse, dealers are also more cautious to enter the car.

"due to the slow progress of the implementation of the sixth National Standards, the short time to clear the inventory and the heavy task, the dealers have made great efforts to clean up the inventory. Due to the market downturn, coupled with the impact of the current market country, five countries and six switching, each brand promotion means are various, each brand propaganda skill is different, produces certain trouble to the end consumer's consumption judgment and consumption decision-making, some potential consumers become more cautious. " Cui Dongshu, secretary-general of the Federation, said this would further trigger price instability caused by local Guofu's radical policies, which would not be conducive to a rise in sales in the car market in June.

At present, the local and central governments have issued some policies to stimulate the car market one after another. From June this year to 2020, Shenzhen will increase the index of increment of ordinary cars by 40, 000 a year, while Guangzhou will increase the quota of increment of 100000 small and medium-sized buses. In addition, the "implementation Plan for promoting the Renewal and upgrading of key Consumer goods and the smooth Recycling of Resources (2019-2020)" issued by the three ministries has adjusted the automobile consumption policy, requiring all localities not to impose traffic restrictions or purchase restrictions on new energy vehicles, and those that have been implemented should be abolished.

Key Words:  Cars  sales