China Autos Report Q1 2013

BMI's decision not to follow the China Association of Automobile Manufacturers (CAAM), which revised its forecast for passenger car sales upwards earlier in the year, has paid off, as the market declined 0.3% in September, marking the first decline since January. Tensions with Japan have seen Japanese carmakers reporting massive declines in sales, although other brands such as Hyundai Motor and Kia Motors have been on hand to capitalise. The effects on the overall market are still evident, however, and we stand by our full-year forecast for 8% total vehicle sales growth, compared with CAAM's revision to 11%.

We did make one revision to our forecasts in our last report that we are standing by and that is for commercial vehicle sales, which continue to drag on total industry sales. In September, commercial vehicle sales were down 7.6% to 301,800 units, taking the 9M12 total to 2.82mn units, down 8.82%. Our CV sales forecast stays at 3.828mn units, as there is little to suggest the segment will improve for the remainder of the year. This has also impacted our production forecast, which now reflects a 7.3% contraction in CV output in 2012.

In response to the growing tension over the Senkaku/Diaoyu islands dispute, Toyota announced in late September that it would completely halt production in China and instead choose to run down inventory for some of its models. We had previously warned that the company would face a temporary, but potentially, nasty shock to sales in China, as local consumers turned on Japanese brands. Even then, the violent reaction towards Japanese firms has been remarkable, begging the question of whether a return to normal operations will be possible over the medium term.

In more positive developments, BYD Co and Jiangling Automobile Co have delivered a total of 23 electric vehicles (EVs) to 11 Chinese government agencies. These agencies will use the vehicles for a one year trial and more agencies can be expected to take part. We believe this EV testing is another in a series of recent efforts by the Chinese government to show its seriousness in building up the EV industry, following legislation announced in September. Should the trials conclude successfully, they would complement the upcoming proposed standards. More purchases of EVs by the central government together with greater clarity on the sector's regulations would give automakers greater confidence to increase their investments in EV development.

Chapter - Executive Summary

Chapter - SWOT Analysis

China Autos Industry SWOT

China Political SWOT

China Economic SWOT

China Business Environment SWOT

Chapter - Global Overview

UK Boosts Europe, But Favourites Still Outperform

Table: Passenger Car Sales M

Chapter - Industry Risk/Reward Ratings

Table: Business Environment Ratings – Autos Industry Asia Pacific

Chapter - Asia Regional Overview

Japanese Autos: Outlining The Bear Case Alternatives

Chapter - Macroeconomic Forecast Scenario

Table: China - Economic Activity, -

Chapter - Industry Forecast Scenario

Production And Sales

Table: China Autos Sector - Production And Sales, -

Trade

Table: China Autos Sector – Trade, -

Chapter - Passenger Vehicles

Production And Sales

Table: China Autos Sector - Passenger Cars, -

Chapter - Commercial Vehicles – Forecast and Analysis

Production And Sales

Table: China Autos Sector - Commercial Vehicles, -

Chapter - Motorcycles – Forecast and Analysis

Motorcycles

Table: China Autos Sector – Motorcycles, -

Chapter - Suppliers

Chapter - Company Monitor

Mercedes Takes Knocked-Down Route To Asia

Chapter - Company Profiles

Shanghai GM

Volkswagen

Ford Motor

Daimler

Chapter - Demographic Outlook

Table: China's Population By Age Group, - (')

Table: China's Population By Age Group, - (% of total)

Table: China's Key Population Ratios, -

Table: China's Rural And Urban Population, -

Chapter - BMI Methodology

How We Generate Our Industry Forecasts

Sources

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