China witnesses the first sales slump in the imported vehicle market in 2015 since the country’s joining the WTO. Chinese imported vehicles volume declines 23.3% form a year earlier to 523,000 units in the first half of the year, while delivery volume of imported cars drop 21.5% from last year to 460,000 units, with sales slide in six consecutive months in the first half of the year.
Except for that some hot-selling vehicles have been put into production in China, the main factors include minimal growth of Chinese domestic economy, the decrease in the general vehicle demand and the weaker influence of new products.
As a result, dealerships are troubled with high inventory of imported vehicles as monthly inventory coefficients stand rather high in the first half of the year. In particular, these of March and April exceeded over 5, while the reasonable range is between 0.8 and 1.2 and the inventory alarm line is 1.5.
On the other hand, the average discount on imported vehicle in June reaches 80,000 CNY, an all-time high preferential margin of 12.1%. The preferential margin of imported cars comes out to be 17.7%, up to 123,000 units in June.
The soaring parallel imported vehicles are considered part of the imported vehicles. Due to its limited scale of around 10% proportion, however, the section has contributed little in the growth of the imported vehicle industry.
Though the sales slump seemed sudden, it has shown signs in domestic production of several hot-selling foreign brand vehicles and the decrease of the overall auto industry demand.
On the one hand, faced with fierce competition but a long period of launching new models, foreign automakers will put as many as its models into domestic production once their productions sell well. On the other hand, since joint ventures have introduced many foreign models into China and Chinese domestic automakers also offer more choice for Chinese consumers, less Chinese consumers are interested in the relatively high-priced imported vehicles.
The change of the consumption concept also serves as part reason. In the past, most Chinese consumers bought vehicles to announce their high social status and imported cars can satisfy their needs. According to a survey that covers 2000 respondents in 6 big cities, only 7% of the respondents hold the old concept of announcing social status, and 37% have the economical consumption concept.
