PRLog (Press Release) - Sep 04, 2011 - China's total sales actually fell y-o-y for the second consecutive month in May, prompting a revision of BMI's total vehicle sales growth forecast for the full year to 5.2%. According to the China Association of Automobile Manufacturers (CAAM), vehicle sales were down 3.98% in May, to 1.38mn units, following a 0.25% drop in April. There was a rally in June as the passenger car segment returned to positive y-o-y growth. This took total vehicle sales for H111 to 9.3mn units, up 3.4% y-o-y, which justified our downward revision.
Our production outlook has also been revised downwards to meet the slower demand, while supply chain issues relating to the Japanese earthquake and tsunami are also playing a part, despite efforts by other suppliers to fill the gap. In May, output of passenger cars fell 10% compared with April, to 1.041mn units, while commercial vehicle output was also down 18.68% month-on-month to 308,000 units. This leaves production for the five-months to May up by 3.19% y-o-y at 7.779mn units, which is lower than sales in both growth and volume terms. BMI's new production forecast projects growth of just 4%, with total output set to reach 17.774mn units.
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German carmaker Volkswagen (VW) is sticking to its strategy of producing 3mn units per year in China, despite BMI's expectations of slowing sales growth over the next five years compared with previous years. This strategy has most recently seen the company win Government approval to build two new plants in China, which will take VW's total production presence in the country to 11 facilities. The new plants will be complemented by the expansion of two existing factories in Nanjing and Chengdu, which will have their annual output increased to between 300,000 and 350,000 units. All of the additional capacity f raising chickens alls under VW's plan to invest EUR10.6bn (US$1.64mn) in China between 2011 and 2015.
German carmaker BMW has also doubled its initial investment for China as the sales growth of several premium brands in April exceeded their volume brand counterparts. This is in line with BMI's forecast for the premium segment to outperform the overall vehicle market. BMW will now invest EUR1bn (US$1.4bn) in expanding its new plant in Tiexi, Shenyang province. The plant will now have an installed capacity of 200,000 units, which when coupled with an expansion of its Da Dong plant, will result in an annual production capacity of 300,000 units in China. BMI believes that China will be one of the most crucial markets in the global premium segment leadership race, as it was one of the most closely contested in 2010 and offers better growth opportunities than the more developed states of Germany and the US.
Report Table of Contents:
SWOT Analysis - China Auto Industry SWOT - China Political SWOT - China Economic SWOT - China Business Environment SWOT Global Overview - Table: BMI's Core Views For The Automotives Industry - Regional Overview Supplier View Plays Out As Hyundai Mobis Wins US$233mn Japanese Order Business Environment Ratings - Table: Business Environment Ratings -- Auto Industry Asia PacificMacroeconomic Forecast Scenario - China - Economic Activity Industry Forecast Scenario - Production and Sales - Table: China Autos Sector: Historical Data And Forecasts, 2008-2015 - Trade - Table: China Autos Sector: Historical Data And Forecasts, 2008-2015 - Industry DevelopmentsPassenger Vehicles - Forecast & Analysis - Production and Sales - Table: China Autos Sector: bmw M5 specification wcf.fhwa.dot.gov/exit.cfm?link=http://bimoweb.com/blog">goverment technology Historical Data And Forecasts, 2008-2015 - Company Developments - Premium Segment - New EnergyCommercial Vehicles - Forecast & Analysis - Production and Sales - Table: China Autos Sector: Historical Data And Forecasts, 2008-2015 - Company DevelopmentsMotorcycles - Forecast & Analysis - Table: China Autos Sector: Historica android application l Data And Forecasts, 2008-2015 - Company DevelopmentsSuppliers - Analysis - Company Developments Company Monitor - BMI Favourites Feature In Nissan ASEAN Strategy - Stealing A March - The Rising Star - EMs Key To Growth Company Profiles - Shanghai GM - Volkswagen (China) - Ford Motor (China) - Daimler (China)BMI Methodology - How We Generate Our Forecasting Model - Sources
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