China In July 2012: Puttering Along

China's auto market keeps puttering along. In July, total automobile sales in China rose 8.2 percent to 1.38 million, says the China Association of Automobile Manufacturers (CAAM). For the year, the market has gone basically sideways with a slight 3.6 percent upward bias. The Chinese bubble refuses to burst,  likewise, the market  does not want to go back to its red-hot former glory. Passenger cars are still selling well. 1.12 million were sold in July, up 10.71 percent. Commercial vehicles still are in a slump. 259,200 vans, trucks and buses of all kinds changed hands in July, down 1.63 percent. Reuters notes correctly that commercial units "have been on a steady year-on-year decline almost every month since March 2011." In the industry, this is generally taken as a bad omen for the economy. The weak commercial sales come as a surprise after receiving word from GM about furious 32.7 percent gains at Wuling. Wuling pretty much owns China's light commercial market. Wuling sold 94,178 units in July, while the total commercial segment accounted for 259,200 units.  If the segment is down 1.63 percent and Wuling's lion's share is up by double digits, then either the rest of China's truckmakers must be hurting bigtime.  Or the numbers are off somewhere. Speaking of off numbers, with Norihiko Shirouzu, Reuters has a new man in China. He knows the industry and writes: "CAAM's data reflect sales of vehicles from factories to dealers and thus should not be considered retail sales, but they give an indication of initial demand at the wholesale level.   Industry executives and analysts say some automakers, struggling to meet their sales targets for the year, have been pushing cars to their dealers.  Overall car inventory in the country stood at 2.2 million as of the end of June, rising sharply from 1.3 million at the beginning of the year, Ye Yongming, general manager of General Motor's flagship China car venture, was quoted as saying by local media." That would be less than two months supply, a level considered  desirable in the  U.S. from The Truth About Cars http://www.thetruthaboutcars.com

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