Carmakers seeing signs of speedy sales recovery
May-12-2020 By : fcccadmin
Many major Chinese and foreign carmakers are seeing signs of a speedy sales recovery in China, as the world’s biggest auto market bounces back from the coronavirus pandemic. China’s auto sales rose 4.4% year-on-year to 2.07 million vehicles in April, the China Association of Automobile Manufacturers (CAAM) said. April’s growth indicates a recovery in the market after the government released a series of policies to rev up auto consumption. It follows a 43% drop in March and a 79% fall in February. Also in April, sales of new-energy vehicles (NEVs) declined by 26.5% to 72,000. Last month, electric vehicles sales declined 28.6% year-on-year to 51,000 units. In total, 5.76 million vehicles were sold in the first four months of this year, a decline of 31.1% year-on-year. China sold 1.53 million passenger cars in the first four months, down 4.6% year-on-year. Production and business operations of car manufacturers had largely resumed in April and output had returned to a level comparable with the same period last year. The Association had forecast Chinese auto sales were likely to fall more than 10% in the first half of this year and 5% for the whole year, marking a third consecutive year of contraction. Last year, overall sales fell 8.2% to 25.77 million vehicles, the Shanghai Daily reports.
China’s largest private carmaker Geely sold 105,468 vehicles last month, up 2% from the same period last year. Its sales in the first four months totaled 311,495, accounting for 22% of the carmaker’s sales target of 1.41 million. The carmaker, which owns Volvo and stakes in Mercedes-Benz parent Daimler, said the sales recovery had driven its market share up to 7.2% by the end of the first quarter. “We are confident in sales performance in May and the second half of the year as we launch new models and resume deliveries that were affected by the coronavirus,” said Geely President An Conghui. He added that the Chinese market has vast potential in the long run and government policies have laid a solid foundation for recovery. Geely said in March that 2020 may be one of its toughest years yet as pressure from the coronavirus outbreak on production and sales persists. Globally, Geely deliveries in the month totaled 80,828, up 35% from March.
Great Wall Motors also delivered 6,070 vehicles under its high-end SUV marque Wey, almost double the number from March. Its electric cars and pickups saw decent sales as well. The carmaker said it has been exploring digital channels to boost sales during the pandemic. International carmakers are also faring well. Sino-German joint venture FAW-Volkswagen announced that it delivered 165,734 vehicles under the Volkswagen, Audi and Jetta brands, up 9.9% year-on-year. Volvo delivered 14,698 vehicles in April, up 21% year-on-year. The XC60 SUV was its bestseller. The carmaker said its plant in Chengdu, Sichuan province, is working overtime to meet demand. Volvo said its dealerships saw traffic rise 82% year-on-year during the five-day May Day holiday and received over 6,800 orders, more than double last year’s levels.
U.S. carmaker GM’s two joint ventures saw double-digit sales growth in April. SAIC-GM delivered 111,200 vehicles under the Buick, Chevrolet and Cadillac brands, up 13.6% from the same month last year. SAIC-GM-Wuling sold 127,000 vehicles last month, up 13.5% year-on-year. Zhou Xing, the joint venture’s Marketing Director, said the company has been coming up with various measures to promote sales since the outbreak of the pandemic and they have worked well. Ford Motor’s two Chinese ventures have reported year-on-year sales growth for April as well. Changan Ford sold 20,465 vehicles in April, up 38.3% from the same period last year.
German carmaker Volkswagen sees new opportunities abounding in China. “China has always been the engine of Volkswagen’s success, especially now, as the economy in Europe and the U.S. is under great pressure. In the wake of the pandemic, the Chinese auto market is full of new opportunities,” said CEO Herbert Diess. Volkswagen’s China sales in the last weeks of April rebounded to the same level of last year, pushing its China market share up 1.7 percentage points to 21%. In Germany, April sales were down 60% year-on-year, with the rest of Europe down 85%. Sales in North America were down 50%, and down 81% in South America. Volkswagen Group China CEO Stephan Woellenstein called China the global role model for renewing vitality in automotive markets, saying it will stabilize the group’s business while operations in Europe are still slowly coming back. Woellenstein added that people unable to buy a car over the last few months are now eagerly visiting dealers, and many of them are first-time buyers as they want to avoid public transport these days. Wealthy customers are coming back to the market faster than expected, which has brought about sales growth in the first quarter for Volkswagen’s luxury brands Bentley, Audi and Porsche. “Should the current trend continue, we at Volkswagen Group China can be cautiously optimistic and forecast a yearly result that is not so far away from our original plan,” said Woellenstein.
Exports of China-made Ford, Tesla, BMW and other brands to surge
Jan-07-2020 By : fcccadmin
Exports of China-made foreign vehicles will be boosted in coming years as domestic car sales slump and restrictions on overseas firms are loosened, according to a report by the Ministry of Commerce (MOFCOM) and the China Automotive Technology and Research Center. Manufacturers like Ford Motors, GM, BMW and Honda are expected to expand manufacturing in China as Beijing allows foreign firms to have wholly-owned local ventures that will increasingly serve the global market. The traditional “market for technology” strategy, under which China attracted foreign car brands to make vehicles for the local market, is giving way to permitting overseas firms to own factories in China and use the country as a production base for the rest of the world. Car sales in China dropped 5.4% in November, marking a 17th consecutive monthly decline, according to the China Association of Automobile Manufacturers (CAMM).
Despite predictions of a boost to China-made car exports in the future, shipments of finished vehicles in November accounted for just 3.2% of the 2.6 million vehicles manufactured in the country, according to CAAM. Car exports were expected to have dipped by about 5% in 2019, as exports to the United States fell drastically amid the U.S.-China trade war, which has seen car manufacturers like GM and Ford Motors hit with tariffs, the CAAM said in October. “China’s small scale of automobile exports and the low percentage in overall exports are really not in line with China’s position as the world’s largest production base and consumer market,” said the report, as electric vehicle manufacturer.
Tesla delivered 15 Model 3 sedans assembled at its new Shanghai factory to company employees ahead of schedule. Tesla’s Shanghai factory is China’s first wholly foreign-owned car plant. The U.S. car company said it would deliver a second batch of Model 3 sedans from its USD2 billion factory to customers this week. Tesla broke ground on its first overseas plant, Gigafactory 3, early in 2019. It will target the domestic market with its China-made cars, as exports to the U.S. would be hit by tariffs. China is showering Tesla with favors because the government has identified the new energy sector as one of 10 key industries for self-sufficiency and global leadership under its “Made in China 2025” economic blueprint. Tesla plans to cut the starting price for its China-made Model 3 vehicles to CNY299,050 after receiving Chinese subsidies for electric vehicles. The government has also exempted imported Model 3 cars from consumption tax, making it cheaper for local buyers.
Chery Automobile, China’s largest automobile exporter, plans to export 500,000 vehicles in 2025, with a total value of USD5 billion. Chery exported 126,993 vehicles in 2018 and 107,700 units in 2017, according to the company’s annual report. Chery is targeting sales in the U.S. and European markets in the future and already manufactures cars in Algeria and Brazil. In the first half of 2019, China’s new energy vehicle exports increased by 99.3% year-on-year and are expected to become a major driving force for car exports, the South China Morning Post reports.
As sales drop, China aims to further support auto sector
Jan-15-2019 By : fcccadmin
China plans to increase spending in the automotive sector as car sales are plummeting. Ning Jizhe, Vice Chairman of the National Development and Reform Commission (NDRC), told China Central Television (CCTV) that spurring auto sales would be part of the efforts to expand domestic demand, and in turn boost the economy. He did not elaborate on the details, but the verbal support was enough to drive up prices of auto stocks, including those of Geely Automobile Holdings, which had plunged 11.3% after reporting a 44% year-on-year sales decline in December alone. The company missed the full-year sales target for 2018. The economic slowdown and the tit-for-tat U.S.-China trade war have largely dampened Chinese consumers’ buying interest in passenger vehicles last year.
Passenger vehicle sales dropped 5.8% to 22.35 million units in 2018, the China Passenger Car Association (CPCA) said. It was the first time since 1992 that China, the world’s largest auto market, reported a contraction in sales. But even with the enforcement of incentives, the auto market is unlikely to see a growth this year, according to Zhou Ling, Fund Manager with Shanghai Shiva Investment. “Most of the car companies will be targeting flat sales,” he added. Expectations are heightening that Beijing would cut the auto purchase tax to stimulate sales. The last time the central government reduced the tax was in 2015 when the rate was slashed from 10% to 5% for cars with engines of up to 1.6 liters.
Chinese automakers are forecasting conservative sales targets for 2019 in a challenging market, investment bank UBS said. “China’s auto industry faces challenges such as high inventory levels and overall car sales may not be so good in the short term,” said Paul Gong, China Auto Analyst at UBS Investment Research. “Total vehicle sales are expected to begin to pick up after the second quarter of this year.” Gong attributed lackluster sales in 2018 to the macro-economic environment, a falling stock market and weak consumer confidence. “Last year, the fall in sales was beyond our earlier expectations,” Gong said, adding that some factories are likely to close this winter and some dealerships in second-tier and third-tier cities may close after the Spring Festival.
The sales slump has hit China’s manufacturing sector, which contracted last month for the first time in more than two years. “The period of rapid growth in production and sales of cars is over and low growth could become the norm in the automotive market,” Xin Guobin, Vice Minister of Industry and Information Technology said recently.
GM, one of the most popular international carmakers in China, delivered 3.64 million vehicles in the country last year, down 9.9% from 2017. SAIC Motor Co, China’s largest carmaker by sales and a partner of GM and Volkswagen, saw its sales last year edge up 1.75% to 7.05 million. In 2017, it registered a growth rate of 6.8%. Geely was the best-selling Chinese brand last year. Its sales grew 20% from 2017 to 1.5 million last year, but it missed its target by 5%. It did not expect the rise to continue, setting a sales goal of 1.51 million for 2019. Geely said its holding in Daimler remained unchanged, refuting a Bloomberg report that said it had cut its 9.7% stake in the German carmaker by more than half. Chairman Li Shifu said in his New Year address that 2019 would be pivotal for Geely as it might face a dismal period because of weak market conditions.
Tesla breaks ground on Model 3 factory in Shanghai
By : fcccadmin
U.S. electric carmaker Tesla broke ground for its Shanghai plant with Chief Executive Elon Musk announcing a plan to start production of its Model 3 by the end of 2019. The USD5 billion project has taken off very quickly as China is eager to attract new investment projects. Construction began just three months after Tesla secured a land parcel at Lingang, Shanghai, for the Gigafactory 3, its first plant outside the United States. The factory in Shanghai will produce “affordable versions of 3/Y for Greater China,” Musk said, adding that the higher-priced S/X models would still be built in the U.S. Wu Qing, Vice Mayor of Shanghai, said the Tesla factory, the largest foreign direct investment project on record in Shanghai, was progressing on a rapid pace with the local government’s support.
Gigafactory 3 was expected to produce around 3,000 Model 3 vehicles a week in the initial phase, ramping up to 500,000 vehicles per year when it became fully operational, Tesla said in a statement. Tesla’s U.S.-made cars are now subject to a 15% tariff on imports to China after Beijing rolled back an extra 25% tariff it slapped on U.S. car imports for three months from January 1. A Model 3 car now sells for CNY499,000 in China. But a locally-produced Tesla car, with reductions in manufacturing and logistics costs on top of the exempted import tariff, is expected to cost as little as CNY300,000, a level that could attract thousands of Chinese customers.
As the Chinese government gradually removes ownership restrictions on automotive joint ventures, Tesla became the first foreign carmaker to set up a wholly-owned new-energy vehicle (NEV) factory in China. China is the world’s largest auto and NEV market, with Beijing aspiring to become the global NEV leader with technologies that meet the highest international standards by 2025. NEV sales in China jumped 75.6% in the first 10 months of 2018 from a year earlier, hitting 860,000 units.
But Tesla will face competition from local electric car start-ups such as Byton, Nio and Xpeng Motors, the South China Morning Post reports. As Elon Musk was breaking ground on its factory in Shanghai, Byton, headquartered in Nanjing, presented its electric sport utility vehicle (SUV) M-Byte at the CES fair in Las Vegas. The M-Byte has five screens: a 49-inch, edge-to-edge dashboard display, a tablet embedded in the steering wheel and a new 8-inch touch screen in the center console, combined with two more on the headrests for rear-seat passengers. The company is working with “deep integration” apps including navigation and music that will provide individualized recommendations based on one’s calendar schedule and interest preferences stored in the cloud. The model will feature Amazon’s Alexa for overseas markets and Baidu’s voice control for China. Byton is also working with U.S. self-driving start-up Aurora and Baidu on self-driving technology for foreign and local markets, respectively. Deliveries are slated for the end of this year in China.
Meanwhile, Baidu, operator of China’s largest search engine, has entered a partnership deal with California-based autonomous delivery start-up Udelv that will see self-driving vans powered by its software to offer delivery services to American retailers such as Walmart from February. The delivery services will operate alongside robo-taxis from Alphabet’s Waymo, putting China’s champion up against one of its biggest autonomous driving rivals in the U.S. market. Nasdaq-listed Baidu announced the deal with Udelv at a launch event for its latest open self-driving platform – Apollo 3.5 – on the sidelines of the 2019 CES tech fair in Las Vegas.
Geely considering IPO for Volvo Cars
May-15-2018 By : fcccadmin
Zhejiang Geely Holding Group is considering to launch an initial public offering (IPO) for Volvo Cars, the carmaker it bought from Ford in 2010. “We are looking at the possibilities; we haven’t made a final decision on how to proceed yet,” a Geely Spokesperson said. Media reports said that Geely has selected investment banks including Citigroup to advise on an IPO this year. Bloomberg reported that Geely and Volvo have discussed valuing the Swedish automaker in a range of USD16 billion to USD30 billion. It also said the two are planning a dual listing in both Hong Kong and Sweden, and the shares could be sold as early as this fall. But Geely did not confirm the news.
Volvo sold 200,042 cars from January to April this year, up 13.6% year-on-year. In China, its largest market, it sold 39,210 cars, up 22.4%. Geely Automobile, which is also owned by Zhejiang Geely Holding Group, is listed in Hong Kong. Its shares doubled in value over the last 12 months. Geely has been one of the best-selling Chinese passenger carmakers in China. It sold 524,000 cars from January to April, ranking second only to state-owned SAIC Motor, soaring by some 40% year-on-year, according to the China Association of Automobile Manufacturers (CAAM).
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