none

CHINA'S AUTO PRODUCTION SLUMPS

16-10-2015
by 
in 

China’s automobile production sector, once the backbone of its manufacturing industry, has been in steady decline in recent months.

China is the world's biggest auto market by volume, but in the past year the market has been facing headwinds.

Gross auto sales for the first half of 2015 grew at the slowest pace in more than six years.

The industry was hard hit by the July stock market crash, which dented the net worth of many middle class Chinese, the chief target market for domestic Chinese automakers.

In July, the China Association of Automobile Manufacturers was forced to slash its forecast of 2015 vehicle sales growth by more than half, from 7 percent to a mere 3 percent.

The car sales slump created excess inventory at dealerships, which forced factories and assembly plants to cut back.

Earlier this month both the official China and the Caixin/Markit purchasing managers index (PMI) came in below the critical threshold of 50, indicating the industry is in contraction.

And more recently leading aluminium producer Alcoa Inc revised its forecast downward more than four fold.

On its third-quarter earnings call, Alcoa CEO Klaus Kleinfeld cut its estimate for China's 2015 automotive production growth to 1-2 percent, down from its 5-8 percent previous forecast. For heavy-duty trucks and trailers, Alcoa sees a decline of 22-24 percent, down from a more manageable 14-16 percent decline previously thought.

Last month industry forecaster IHS Automotive reduced its full-year sales figures for the Chinese automotive market to 23.4 million vehicles, or a growth of 1.4 percent for 2015, down from 4.4 percent growth it previously forecasted. IHS also forecasts that capacity utilization at plants to fall to 65 percent from 70 percent in 2014 (70 percent is generally believed to be a break-even point).

Last month, China’s largest automaker SAIC Motor Corp. cut its projected sales growth of passenger and commercial vehicles to zero this year.

In a bid to reverse the trend, Beijing recently announced a tax cut on purchases of small cars to boost sales. The 10 percent purchase tax would be cut to 5 percent for cars with displacement of 1.6 liters or smaller. Presently, such vehicles make up the majority of car sales in China’s domestic market.

Related news & editorials

  1. 27.10.2021
    27.10.2021
    by      In
    ‘Buy Australian Now’, the latest campaign from Australian Made is urging all Aussies to support local jobs and economic recovery by backing our local makers and growers as the country begins to open up and prepare for the festive season.
    According to Australian Made Chief Executive, Ben Lazzaro,... Read More
  2. 26.10.2021
    26.10.2021
    by      In
    Work, health and safety are fundamental to our lives and are, more than ever, a central focus for organisations.
    The Hunter region in NSW is well-known for leading the way in industry; this in turn has led to the region becoming champions of WHS.
    The Hunter Safety Awards were born out of desire to... Read More
  3. 19.10.2021
    19.10.2021
    by      In
    There is no doubt that the recent AUKUS agreement between Australia, USA and the UK was a surprise to just about everyone on the planet!
    Taking a closer look into the government’s decision to commit to the AUKUS alliance, much of what has been reported by mainstream media has been inaccurate or... Read More
  4. 18.10.2021
    18.10.2021
    by      In
    Australian Resources and Energy Group AMMA welcomes today’s intervention of the Australian Government seeking to put an end to three months of damaging strikes at Fremantle Port.
    It has been reported the Australian Government has stepped in, utilising its powers under the Fair Work Act to seek an... Read More
Products
Suppliers