Ares
12th April 2011, 05:56 PM
Two months ago we reported that the recently bailed out Unionized Carmaker, for whom China (where they apparently do not care about falling steering wheels) has become a market more important than even the US, had seen some jarring demand weakness, following a 10% drop in January sales. We now learn that GM was not only the beneficiary of last year's Cash For Clunkers program in the US, but has been the recipient of recent incentives offered in the domestic Chinese market. Alas those are now over, and as Bloomberg reports "China’s passenger-car sales grew in March at a pace that was below forecasts after incentives ended and fuel prices rose, the China Association of Automobile Manufacturers said." That's putting it mildly: for an economy in which a growth rate of 10% is considered stagnating, what happened in March was equivalent to a drubbing: "Dispatches of cars including multipurpose vehicles and sport-utility vehicles to dealerships rose 6.52 percent from a year earlier to 1.3 million units, the association said in a statement today. That pace was about one-tenth of the 63 percent sales increase reported in March of last year." Which brings us to the question of the day: how does one spell "short GM" in Mandarin? Yet the irony of the day award goes to Charlie Munger, who may or may not have been completely "open" with his purchase of BYD shares: BYD sales plunge in March by 41% (Y/Y). Suck it in, Charlie.
More from Bloomberg:
“The overall vehicle sales growth in March was below our expectations,” Zhu Yiping, the association’s statistics head, said at a briefing in Beijing today. March has historically been a peak period for car sales in China following the week-long Chinese New Year holiday that was celebrated this year from Feb. 2 through Feb. 8, according to the association.
General Motors Co. (GM), China’s biggest overseas automaker, posted slower sales growth in the nation for the second month in March as the government reinstated a 10 percent sales tax and phased out subsidies for vehicle trade-ins in rural areas. Last year, overall auto sales surged 32 percent to a record 18.1 million, helping the nation stay the world’s largest vehicle market for the second year.
“Car sales growth may continue to slow for a few more months as customers brought forward purchases to the end of last year,” said Harry Chen, an analyst with Guotai Junan Securities Co. in Shenzhen. “The pace may pick up again in the second half as potential demand is still there.”
A huge miss:
Sales growth in China this year may fall short of the association’s previous estimate for an increase of 10 percent to 15 percent, said Dong Yang, vice chairman of the association.
“I am concerned about whether our growth rate is too low,” Dong said. “Some automakers’ profitability may be undermined this year and some may even face difficulties in their operations.”
Total vehicle sales gained 5.4 percent in March to 1.8 million units, the auto group said. Vehicle sales for the first quarter increased 8.1 percent to 5 million units.
The worst news for GM: Chinese consumers seem to finally realize what is quality and... what isn't.
GM sold 233,014 vehicles in China last month, the Detroit- based company said April 2. Deliveries barely rose from March 2010’s 230,048 and followed a 6 percent increase in February.
Ford Motor Co. (F) boosted sales in China 20 percent to 53,440 units in March. Deliveries of Ford-brand vehicles by Changan Ford Mazda Automobile, the Dearborn, Michigan-based company’s Chinese passenger car unit, totaled 42,157 vehicles in March, the carmaker said April 7.
But the biggest loser? Charlie Munger (despite his "deep" frontrunning acumen.)
BYD Co., the automaker backed by Warren Buffett, reported a 41 percent plunge in March sales.
Suck it in, Charlie.... Suck it in.
http://www.zerohedge.com/article/bad-news-gm-chinas-own-cash-clunkers-program-ends-car-sales-come-far-below-expectations-byd-
More from Bloomberg:
“The overall vehicle sales growth in March was below our expectations,” Zhu Yiping, the association’s statistics head, said at a briefing in Beijing today. March has historically been a peak period for car sales in China following the week-long Chinese New Year holiday that was celebrated this year from Feb. 2 through Feb. 8, according to the association.
General Motors Co. (GM), China’s biggest overseas automaker, posted slower sales growth in the nation for the second month in March as the government reinstated a 10 percent sales tax and phased out subsidies for vehicle trade-ins in rural areas. Last year, overall auto sales surged 32 percent to a record 18.1 million, helping the nation stay the world’s largest vehicle market for the second year.
“Car sales growth may continue to slow for a few more months as customers brought forward purchases to the end of last year,” said Harry Chen, an analyst with Guotai Junan Securities Co. in Shenzhen. “The pace may pick up again in the second half as potential demand is still there.”
A huge miss:
Sales growth in China this year may fall short of the association’s previous estimate for an increase of 10 percent to 15 percent, said Dong Yang, vice chairman of the association.
“I am concerned about whether our growth rate is too low,” Dong said. “Some automakers’ profitability may be undermined this year and some may even face difficulties in their operations.”
Total vehicle sales gained 5.4 percent in March to 1.8 million units, the auto group said. Vehicle sales for the first quarter increased 8.1 percent to 5 million units.
The worst news for GM: Chinese consumers seem to finally realize what is quality and... what isn't.
GM sold 233,014 vehicles in China last month, the Detroit- based company said April 2. Deliveries barely rose from March 2010’s 230,048 and followed a 6 percent increase in February.
Ford Motor Co. (F) boosted sales in China 20 percent to 53,440 units in March. Deliveries of Ford-brand vehicles by Changan Ford Mazda Automobile, the Dearborn, Michigan-based company’s Chinese passenger car unit, totaled 42,157 vehicles in March, the carmaker said April 7.
But the biggest loser? Charlie Munger (despite his "deep" frontrunning acumen.)
BYD Co., the automaker backed by Warren Buffett, reported a 41 percent plunge in March sales.
Suck it in, Charlie.... Suck it in.
http://www.zerohedge.com/article/bad-news-gm-chinas-own-cash-clunkers-program-ends-car-sales-come-far-below-expectations-byd-