Sales of imported automobiles in China grow over 21% in April

Statistics from China Automobile Trading show that 88,051 vehicles were imported last month, equivalent to year-on-year growth of 21.9 percent, the National Business Daily reported today. This is the forth month in a row that import growth has exceeded 20 percent. Meanwhile inventories have hit record levels, with dealerships struggling to make new sales.

Wang Cun, head of CATC's marketing and sales division, commented on the Chinese automobile market last month: "Looking at the import market this April, [we see] a noticeable contradiction. On the one hand, import automobile [sales] numbers are still experiencing non-stop growth, while on the other, dealerships are continuing to suffer. The number of promotional offers [they are introducing to] the market is increasing, while [their] profits are continuing to fall. Inventory concentration has already reached its highest amount in a year." Mr. Wang predicts that increasing inventories will lead to import growth slowing down in the latter half of the year.

Passenger automobiles made up 86,074 of all imports last month, with over half of those being SUVs. A total of 372,450 vehicles have been imported from January to April, 21.6 percent more than the 306,200 imported in the first four months of 2011. Passenger automobiles constituted 364,229 of that number.

Although import growth rates have been cooling down this year, they still remain well in the double digits. A lot of this is due to manufacturers introducing several new models to China. BMW, Mercedes-Benz and VW headed up the import sales charts last month, with total sales of 16,100 units, 11,100 units and 6,900 units, respectively. They were followed by Audi and Lexus, who sold 6,800 and 5,200 units respectively. Other than Mercedes-Benz, all of the above manufacturers saw their import sales increase over 20 percent, with Audi's growing a full 86 percent.

However, the high import sales do in no way signify that supply isn't keeping up with demand. On the contrary, dealerships have had to introduce more and more promotional offers in order to keep going, with their profit margins continuing to decrease. According to CATC-conducted studies, the index for promotional sales prices of imported vehicles has fallen from 0.5 in January to -2.94 in April. Average end consumer savings have risen from 37,900 yuan ($5,999) in March to 44,500 yuan ($7,082) last month. Meanwhile, inventories have reached their highest point in a year.

"We've definitely been under a lot of pressure recently," an employee at an import Hyundai dealership remarked. "Judging from our sales performance this year, the slow season [for the automobile market] has come earlier than expected." Mr. Wang lamented that if the economy doesn't recover by the end of the year, dealerships will continue to suffer.