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2009 China's auto market, "Paul 10" conflict

Fernando Filipe

by Professional editor working for himfr.

"The automobile industry restructuring and revitalization of planning" proposed in 2009 to China's automobile production and sales efforts more than 10 million, three-year average growth rate of 10 percent, it is necessary to achieve this goal is not easy to achieve in 2009 is 10% growth , there still exist a number of variables. In 2008, the national automobile production and sales to 9,323,600, and 9,363,300, compared to the past, increasing production and sales base, it is necessary to achieve 10% for three consecutive years of high growth, the challenge is not small.

Growth turn is a full U-turn or monthly fluctuations?

Ministry of knowledge development and issued written knowledge present that in March, the National Automobile goods produced 1,095,400, 35.59% expansion in flexible chain of bonds (in February than in March), an advance of 5.55%; sales 1,109,800, ring than the 34.10 out of 100 expansion, an advance of 5.01%.

Data in March to the automobile market a shot in the arm: first, sales of more than a quarter of the U.S. market, China has become the world's largest automobile consumer market; Second, a single month to return to one million steps; Third, an increase of the past six months the the highest point.

However, we should in addition observe there are more problems: First, sales expansion exceeded 5% only, and not high; the second, "the world" is only interim, full-year 2009 may be arduous to surpass the United States; the third , since the second half of 2008, an advance of down too, the prevailing expansion turn is a full U-turn or monthly fluctuations? It is arduous to declare now; Fourth, quick expansion in March, the source reasons for of guideline moved ahead, use duty, pay for duty slice, and the fuel duty reorganise, a succession of guidelines for instance automobile surrounding territories acted a job in propping up the market; Fifth, divergences in use structure and apparently, in March sales of 772,400 commuter motor vehicles, up 10.26 out of 100, but sales of economic vehicles was 337,400 yuan, down 5.29%; the sixth, but the advance in automobile goods produced and sales financial gatherings half of the yield are opposing expansion, that there is still the subject of cost manipulate, fiscal critical purpose, the consequence on the actual economic procedure is still deepening.

1-3 months in 2009, automobile output and sales 2,567,600 and 2,678,800, an boost of only 1.91% and 3.88%, decreased from the present inventory, and some forms traded out of the market position, 2009 years to accomplish the aim of 10% is expected to accomplish, but the force is not little and can only be warily optimistic.

In 2008, the nationwide automobile output and sales fallen year-on-year boost of 16.87 and 15.21 percentage points, in which vehicle sales fallen 20 and 16 percentage points down turn in the magnitude of the year, and the first quarter of this year sales development of only 1. 91% and 3.88%, thus, if the warmer automobile market is the key.

Small displacement and the role of motor vehicles can be driven to the countryside long?

As a outcome of the utilisation levy, buy levy slash, little displacement vehicle sales increasing, but furthermore there are two problems: First, what displacement is the "small displacement", the top limit of the little number of emission? Second, little displacement vehicles (even the general notion of little displacement) of the virtual likeness is still warm, the market share was not high.

"The automobile industry restructuring and revitalization of planning" provides that from 2009 January 20 to December 31, and below 1.6 liters of displacement by 5% of passenger vehicle purchase tax levied; At the same time, the next three years, " displacement of 1.5 liters of the following passenger market share above 40%, of which a small displacement below 1.0 liters car market share above 15% "; car for the countryside is the displacement of 1.3 liters for the following cars.

So, what is "small displacement" countrywide motor vehicle is not very distinctly delineated, the development did not conclusive, 1.6 liters, 1.5 liters, 1.3 liters or 1.0 liters? Policy of ambiguity at a forfeit for some enterprises, financial endeavour in R & D indecisive.

One is 1.0 liters and under is the actual type of tiny displacement motor vehicles, if so, this part of the market share types in item very tiny, not very sultry but in addition the future of preferential guidelines to farther can not only cover this part of model.

The first quarter, SAIC-GM-Wuling sales 246,293, up 34.5 out of 100, this expansion was chiefly due to the high use duty, and vehicle pay for duty lessening guideline support to countryside environs, and SAIC-GM-Wuling is supported on micro-off supported financial gathering, is a motor vehicle to the surrounding territories the most direct beneficiaries of the guideline, consequently, SAIC-GM-Wuling, high-growth does not intend that a tiny displacement of the "golden period" on the up.

1-3 months, sales of motor vehicles out the apex 10 brand labels are: F3, Excelle, Yuet move, Jetta, QQ, Santana, Elantra, Xiali, Accord, Corolla, which can be observed, 1.3 or the following small number types actually.

At present, the auto guideline support to countryside environs are chiefly wares and micro-light commuter motor vehicles out; China's auto market is the "golden output" is still 1.6 to 2.4 liters; by the fundamental thought of the consequence of use, 1.3 liters emissions and trade the following motor vehicle types have yet to be upgraded; the consequence of the charge itself is still bigger than the consequence of oil prices. The long time span, small-displacement motor vehicle to the surrounding territories and the hauling effect of these two environs may not have looked frontwards to less than ideal.

The problem is that the current increase mainly by small displacement with the vehicle driven to the countryside, and this is where the worry.

Decline in trade overseas yield descent

In 2008, the national automobile export 684,900, accounting for the domestic automobile production 7.36 percent, an increase of 67.7 percentage points decline; the first quarter of 2009, national automobile export 61,000 yuan, down 62.06 %.

This means that export growth in decline in 2008, based on the year 2009, exports are likely to drop the more serious.

On the one hand, China's auto trade overseas chiefly condensed concurrently in the "Asia" territory, the location stayed at than the migraine itself, narrower; On the other hand, in actual by the exchange rate is subject to the consequence of fiscal critical purpose, the worldwide motor vehicle market shrinking speedily, trade overseas descent exacerbated by the prevailing heading down movement continues.

In addition, although China's auto products cheap, but the quality of word-of-mouth and brand image still needs to be improved, and this is a long-term can be effective. To sum up, the situation was very serious automobile exports.

According to China's Automobile Association statistics, this year, 1-2 months, large-scale automobile enterprises the main business income of 320.413 billion yuan, up 9.42 percent decline, the profit amounted to 9.879 billion yuan, up 50 percent decline.

2008, 19 key enterprises in the automobile industry (group) on the overall decline in profits, while the faster decline in 2009. Decline in profits for many reasons: On the one hand, 2008 is mainly due to rising costs, continued to decline in 2009 that cost control in enterprises is still a large problem; On the other hand, demonstrate the effects of market further intensified, companies may not want to price the market constant pressure to lower prices, but look at the long-term trend will continue; the most fundamental reason is the limited size of enterprise, productivity is not high, lean production is not achieved and the level of precision management is not high.

Policy to support the face wants to be augmented

2009, a positive factor for China's auto market more than the negative factors, the overall terms of the bright spot in the world will continue to be, but is currently facing great challenges, whether the next three years, "Paul 10" the need for policy support was further expanded.

2009, goods produced competence and organisation of even the utmost stages of Toyota's yield is looked frontwards to to have extensively worse, we can observe how serious the circumstances, in the household enterprises are looking at "the expansion of trouble" and the dual demands of external challenges.

Policy support is not protectionism, the state procurement is not inclined to own emblem is "the buy of household goods in a" replica.

First, the motor vehicle should be farther augmented to countryside environs, attention could be bestowed a farther 50 million to support the use of tiny displacement motor vehicles, in spite of of their own brand labels and connection endeavour brand labels, so as to avert conflicts.

Second, the acquisition of levy could be farther decreased underneath 1.3 liters and the vehicle could be advised tax-free; from 1.3 to 1.8 liters could be advised to 3%; from 1.8 to 2.4 liters could be advised down to 5 %. Will be less levy income, but the automotive buyer and other consumer-driven, conspicuously to encourage the function of household demand.

Third, the abolition of travel tax to clean up a further charge of secondary roads to prevent disguised charges.

Fourth, the street to retrieve the lend primary and interest of borrowings after the homeland, to halt the charges.

Fifth, to tempo up the in the household market into line with global oil costs, and to change the prevailing in the household oil charge get higher in global oil costs went up speedily, the in the household oil costs in global oil costs slowly declined down the position quo of the blame.

Sixth, to further intensify in the new energy, new technologies in support of efforts to increase the autonomy of the private car R & D support.

Seventh, automobile exports increased support, the appropriate vehicle to raise the export tax rebate rate, the establishment of a special incentive fund to enhance export services platform.

Eighth, the norms and the endorsement of drive vehicle fiscal development, and advantageous relaxation rate motor vehicle advances and down compensation, at the matching time the stringent organisation of private loan records.

IX, regulate second-hand motor vehicle market, to support new-generation motor vehicle use, pay for employed motor vehicles to extend the guideline to support the new covering can be broadened to 20 million motor vehicles in the environs, but not constricted to redemption of light-weight wares, for instance micro-off.

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