China dealers receiving more cars than they can sell as economy slows

Article by Anita Panait, on June 11, 2012

Dealers in China are receiving more vehicles from car manufacturers than they could sell as the Chinese economy is moving sluggishly. According to the China Association of Automobile Manufacturers, wholesale deliveries, which include multipurpose vehicles and sports utility vehicles, soared 23 percent year-on-year in May 2012 to 1.28 million units.

The figure even exceeded the 1.2 million average estimate of seven analysts who participated in a Bloomberg survey, marking the third straight month that deliveries beat forecasts. The rise in deliveries to dealers was driven by the recovery of Japanese carmakers Toyota and Honda from the natural disasters in 2011 that affected their supplies.

However, the rise in deliveries could also put more pressure on dealers to offer more discounts and sell vehicles at a loss just to meet the sales quotas set by carmakers. The rise in deliveries could also affect production at factories. According to Kevin Tynan, an automotive analyst at Bloomberg Industries, car makers may have to stop production at their sites if there is a “bottleneck out the retail channel.”

Tynan enumerated two possible actions to remove the bottleneck. First, the Chinese government or the car makers could offer incentives to encourage consumers to buy. Second, auto makers have to plug their production, something which they may not be amenable to. Despite the figures, CAAM and carmakers expressed confidence that demand for vehicles in the country is picking up. Deputy Secretary General Yao Jie said that there are clear signs that the auto industry is becoming more stable.

Topics: china, sales

If you liked the article, share on:


Login or Create new account to add a comment!


We’ve seen quite a lot of intriguing stories in the age of Internet (where the most interesting part was revealed before the story unfolds). Some are from movies and novels...
by - October 26, 2016
Many people have long known that the new 2018 RS5 was being developed by Audi AG. Enthusiasts the world over were excited when a prototype was seen running on the...
by - October 26, 2016
It was only recently when BMW officially debuted the new 2017 5-Series Saloon (G30) online. At that time, this range revealed that it had driving dynamics that was the best...
by - October 26, 2016
Starting early 2017, the new Audi Q7 will be available with the new 2.0-liter TFSI four-cylinder engine that makes it not only faster but also lighter and more efficient than...
by - October 25, 2016
Soon, Fiat Chrysler’s Dodge brand will be ending the production of the Dodge Viper. So practically, the 2017 Dodge Viper will be the last Viper up for grabs. Gerry Wood...
by - October 25, 2016