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Overall recovery of automobile market
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19:12, May 11, 2009

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After International Labor Day, Wang Dunming, vice minister of DYK sales department felt very relaxed. The total sells of DYK in April were more than 17,500, increasing 78% compared to the same period last year.

Even more exciting, by the end of April, DYK received nearly 8000 orders from dealers. But due to capacity limitations of car production, DYK only had 2000 automobiles on hand. "I have never seen such a big gap in orders and production for many years", Wang Dunming said.

The fast sale of DYK's automobile models was just a part of the vibrant domestic automobile market in April. Reporters learned from domestic automobile enterprises that there were six out of the top ten cars manufactures whose monthly sales exceeded the previous month. Among which, the monthly sales of Shanghai Volkswagen, FAW Volkswagen, Shanghai General Motors were more than 50,000.

Comprehensive recovery

The monthly sales were 1,153,100, an increase of 24.97% compared to the same period last year, a 3.91% increase compared to the previous month. According to the latest released statistics from China Automobile Manufacturers Association on May 8, following the records last month, China's auto sales in April set a new record again. Among which, sales of passenger cars were 831,000, an increase of 37.37% compared to the same period last year; commercial car sales were 322,100, up 1.38% compared to the same period last year. In the first four months this year, China's car sales were 3,831,900, an increase of 9.43% compared to the same period of previous year.

The automobile market continued to recover in April. This not only helped China to remain the World's largest auto market for four consecutive months, but also let monthly domestic car sales increase, reversing the downward trend since last July.

There were a few significant changes in the domestic automobile market in April that excited the auto enterprises. First was the obvious growth in the sale of cars with more than a 1.6 liter discharge that do not enjoy the half purchase tax concessions. Cai Bing, vice president in charge of sales for Shanghai GM told reporters; "In April, the monthly car sales for Shanghai GM was 55,246, which is the highest monthly sale record since 2008."

Second is the further reduced decline of commercial cars. Total sales from January to April were 1,005,200, falling 3.86% compared to the same period last year. Tong Dongcheng, vice president of Dongfeng Automobile Company told reporters, "Since April, the domestic commercial car sales have exceeded production and storage has begun to reduce. Although the sale of tractors mainly servicing interregional transportation obviously declined compared to the same period last year, it still went up sharply compared to the previous month."

Industry analysts generally believe that if we admitted that the recovery of the automobile market in the first two months was mainly driven by favorable policies with record high sales in March owed to seasonal cycles and dealers quarterly assessments, then the domestic auto market maintaining such prosperity in April could fully prove that the domestic auto market is beginning to recover from the downturn.


Compared to other industries which have adjusted because of the national revitalization plan, the reason that the automobile industry was able to take the lead in recovery can mainly come down to the four points. Firstly, different from some developed nations like Europe, US and Japan, China's automobiles especially family cars, are in a fast development period. In the meantime, China is in the early stages of urbanization. These two factors gave rise to the existence of rigidity in demand in China's auto market.

Secondly, among the top ten industries revitalization restructuring plans, the "Automobile industry reconstruction and revitalization planning" was not only first to publish but gave the industry the most comprehensive support. Zhang Xiangmu, minister of information industry and industrial equipment said," the purchase tax for passenger cars under 1.6 liter reduced 50%, the reduction is expected to be 15 billion yuan; five billion yuan of financial subsidies to cars sent to countryside; 1 billion yuan subsidy for promoting the update of old cars; a total of 10 billion yuan investment for the enterprise technological progress and technology transformation." The above aid policies boosted the confidence of the entire industry as well as greatly strengthening consumer's confidence. Along with the issue of the implementation detail of cars being sent to the countryside, the startup of the rural market is just around the corner.

Thirdly, China's automobile industry relies less on the international market. In 2008, China's accumulative car export (including complete sets of parts) was 644, 000, only accounting for 6.7% of domestic car sales. Although influenced by the international financial crisis, the monthly export capacity continued to decline since last August, the export impact on the automobile industry was far more less than other industries.

Fourthly, since the fourth quarter of last year, domestic automobile enterprises have begun to actively conduct structural adjustment, as a preparation for "winter". The main measures include the adjustment of product structure, with a focus on energy saving and environmental protection; the adjustment of technical structure, with a focus on being innovation-driven; the adjustment of market structure, moving the emphasis to the secondary and tertiary market. The above measures, also effectively promote industry recovery as a whole.

By People's Daily Online

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