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China, vehicle sales jump 45.4% in January

F, GM, TM, NSANY, HMC

China’s passenger vehicle sales in January surged more than 45% from a year earlier, the largest Y-Y growth since April 2010, indicating the sector is shifting gear back into high-speed growth after a 2 yr slowdown.

A total of 1,704,185 cars, sport utility vehicles, multi-purpose vehicles and minivans were delivered in the nation in January, up 45.4% over January last year and a 9.2% increase from the previous month, the China Passenger Car Association said Friday.

“Such high growth was a result of five more working days in January and more than 10 days of a slack market in January last year due to an early Spring Festival,” said Rao Da, secretary-general of the association. “The rebound in the national economy also supported vehicle purchases.”

He added that it would be reasonable to expect a more than 35% M-M fall in sales growth in February, as the approaching week-long Spring Festival Holiday reduces working time this month by 5 days.

However, he pointed out that combined sales in the 1st 2 months of Y 2013 are likely to see growth rise by 25% Y-Y.

“The downturn since the government withdrew stimulus measures at the end of Y 2010 has ended. The passenger vehicle market is returning to high-speed growth,” said Rao.

General Motors NYSE: GM, the largest foreign automaker in China in terms of sales, said last Tuesday that January was the 1st month in which it and its joint ventures sold more than 300,000 vehicles in a single month, an increase of 26% Y-Y.

US automaker Ford Motor Co’s NYSE:F passenger vehicle sales rose 135% to 44,439, also reaching a record high for January

The 3 Japanese automakers, Toyota NYSE: TM, Honda NYSE: HMC and Nissan PINK:NSANY, whose sales were seriously hit by Chinese consumers’ avoiding Japanese products amid rising anger over Tokyo’s illegal “purchase” of China’s Diaoyu Islands, all saw their sales rise around 20% in January after sharp declines for 4 months.

Although dealers’ inventories dipped slightly for four consecutive months, the fast-increasing sales made the China Automobile Dealers Association declare a red alert over an inventory rebound after Spring Festival.

According to the Vehicle Inventory Alert Index the association released this week, in January, the alert index gained 0.9% to 45.26%, warning dealers to pay attention to a growing inventory.

“As automakers all readjusted their sales targets last year amid a market slowdown, the inventory at dealers was eased at the end of Y 2012. However, a sharp reduction in sales in February from January due to fewer working days brings the high risk of inventories accumulating after the holiday,” said Luo Lei, deputy secretary-general of the association.

According to the association’s survey of more than 1,000 automobile dealers covering 50 major vehicle brands across the country, due to the Spring Festival Holiday, most dealers expect business to worsen in February.

“Dealers and automakers should take measures to cope with the sharp drop in vehicle demand after the holiday, in a bid to avoid the inventory rebound,” said Luo.