Chinese Auto Sales Accelerate Historic Collapse, Set For First Annual Decline In 30 Years

Zero Hedge | 12/12/2018 | Staff
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Progress in the United States/China trade war seems to be happening at just the right time.

The automobile industry in China has been crippled, partly as a result of this trade war, partly due to the ongoing domestic economic slowdown in the mainland, and absent major subsidies - which don't appear to be coming - the outlook for the rest of 2018 and 2019 is not promising. The collapse has been historic and according to new data, continued through November.

November - Data - Continuation - Trends - Month

November data confirmed a continuation of the ugly trends that we discussed last month. For instance, passenger vehicle wholesales were down 16.1% on the year, according to the China Association of Automobile Manufacturers. This data includes sedans, SUVs and crossover utility vehicles.

November vehicle wholesales were also down well into the double digits, dropping 13.9% to 2.55 million units year-over-year. Total retail passenger vehicles fell 18% on the year and SUV sales fell 20.6% year-over-year to 854,289 units, according to the Passenger Car Association.

Result - CICC - China - Year - Production

As a result, CICC now expects China's full year production and sales to drop more than 5% year-over-year for 2018. This would be the first annual decline in Chinese car sales in nearly three decades.

They also predicted that inventory levels at dealerships across the country will likely continue to rise as automakers "stuff channels" in hopes of fooling investors that sales are stronger than they are. The sales data for November suggested "much weaker demand in lower end segments and fears [of] competition in the SUV market" according to the CICC note.

Turnaround - Sector - Festival - Beginning - February

They association concluded that a turnaround for the sector is only likely after Spring Festival, which occurs in the beginning of February. CICC found that...
(Excerpt) Read more at: Zero Hedge
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