Passenger-vehicle sales in China gained 18 percent last month, beating analysts’ estimates, as deliveries surged at Toyota (7203) Motor Corp. and Ford Motor Co.
Wholesale deliveries of cars, multipurpose and sport utility vehicles climbed to 1.31 million units in February, the state-backed China Association of Automobile Manufacturers said today. That compares with the 1.27 million units median estimate of five analysts surveyed by Bloomberg News.
Toyota to Honda Motor Co. extended their recovery from the anti-Japan protests of 2012, while Ford’s sales rose at their fastest pace in seven months as foreign brands grabbed more share from local marques in the world’s biggest auto market. The nation’s car association has said Chinese cars will see further declines this year because they’re less competitive in terms of quality and service.
“Japanese brands have continued to show growth,” Yankun Hou and Ming Xu, analysts at UBS AG, said in a March 7 report. “We believe the market is too negative over auto demand,” which will be “supported by resilient inland demand,” they wrote.
Total vehicle sales, including buses and trucks, climbed 18 percent to 1.6 million units last month. For the first two months, deliveries climbed 11 percent to 3.75 million units.
Sales at Japanese automakers have been rebounding since September as consumers returned to showrooms after a yearlong slump that began in 2012 because of a geopolitical dispute between Asia’s two biggest economies over the sovereignty of a group of uninhabited islands.
Japan Brands
Toyota and Honda (7267)’s sales in China rose 43 percent and 28 percent, respectively, last month. Nissan Motor Co. also saw gains.
Ford’s sales surged 67 percent to 73,040 units last month. The Detroit-based automaker overtook Toyota as China’s fifth-largest foreign automaker last year, helped by the popularity of the Focus.
General Motors Co. (GM:US), which lost its title as China’s largest foreign automaker to Volkswagen AG in 2013, said deliveries rose 20 percent last month, led by sales of its Wuling and Cadillac vehicles. VW hasn’t reported its February sales for China.
The gains have been at the expense of local Chinese brands, which registered their sixth consecutive monthly decline in market share last month.
Local Chinese brands accounted for 38.4 percent of sales in February, down 4.6 percentage points from a year earlier, according to the association.
‘Huge Challenges’
“China’s homegrown auto industry is currently facing huge challenges despite being in the early stage of development,” Dong Yang, secretary general of CAAM, said at a briefing in Beijing today. “Internally, there are also issues such as weak innovation and competitiveness.”
Industrywide deliveries in China are forecast to increase as much as 10 percent in 2014, slowing from last year’s 14 percent growth as anti-pollution and austerity campaigns spread, according to CAAM.
While China’s motorization has been a boon for foreign automakers — all the major ones saw record sales in the country in 2013 — pressure is building on the government to step in as pollution chokes residents and traffic congestion turns roads into parking lots.
The pledge by Premier Li Keqiang last week to “declare war” on pollution will affect the entire economy and the auto industry along with it, China FAW Group Corp. Chairman Xu Jianyi said yesterday at the National People’s Congress in Beijing.
The pace of cities introducing vehicle restrictions will accelerate from “roughly one city per year” in the past to combat pollution, said Ole Hui, a Hong Kong-based autos analyst with Mizuho Financial Group Inc.
Source: Bloomberg
