Tough times for Chinese automobile manufacturers continue in April

The official Purchasing Managers' Index for Chinese automobile enterprises fell to under 50 percent last month, Caijing reported on May 3. The figure, which comes from a recent study done by the National Bureau of Statistics' Service Survey Center and the China Federation of Logistics and Purchasing, is over ten percent lower than March's industry result. According to some analyses, the drop in PMI is a sign that automobile sales in the month have failed to meet expectations.

PMI, which compiles data regarding purchasing managers' acquisition of goods and services, is an indicator of the state of manufacturers in a given industry. China's overall PMI for April totaled 53.3 percent, growing .2 percent from 53.1 percent in the previous month. The current PMI figures are already higher than those of last year, indicating that the economy is continuing to grow steadily.

However, several industries, including the automobile industry, have seen their individual PMI figures fall last month. According to China Passenger Car Association (CPCA) General Secretary Rao Da, April's PMI signifies that the tough market automobile manufacturers in China has been facing has yet to come to an end.

CPCA Assistant Secretary Cui Dongshu comments that the PMI increase in March was merely due to seasonal trends, and that the drop last month shows that high sales could not be maintained. Despite slight recovery in sales over the past few months, ever increasing fuel prices have prevented a full turn around in the market. Recent automobile shows throughout the country, including the recently concluded Beijing International Automotive Exhibition, were cited as the only significant factor bringing in new sales. Retail sales of automobiles were expected to have totaled around 940,000 vehicles last month, increasing approximately five percent from last April.

A recent survey on the automobile industry done by Shenyin and Wanguo Securities drew similar conclusions. Less than 20 percent of the participants in the survey believe that the current business climate for the automobile industry is favorable. According to the survey, the decrease in ratio of orders from March is the key reason behind the pessimistic outlook.

In other news, the index for automobile export order last month was over 50 percent. According to statistics gathered by the China Association of Automobile Manufacturers, manufacturers in China exported a total of 72,000 vehicles in March. That amount is 17.7 percent and 14.3 percent higher than respective figures from February and last March, signifying that growth in Chinese automobile exports is remaining stable.