Auto inventory drops
- Source: Global Times
- [01:03 September 10 2010]
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By Chen Xiaomin
As of the end of August, inventories at automakers dropped to 504,100 units, the lowest this year, the China Association of Automobile Manufacturers (CAAM) said Thursday, easing growing worries over auto market saturation since the beginning of the year.
Passenger vehicle inventories came to 332,600 units as of the end of August, down 43,400 units from the beginning of the month, according to the manufacturers association, while commercial vehicle inventories dipped 1,600 units from July.
"The present inventory hasn't reached a level that could spark vigilance and overcapacity will not arise this year or next," said Dong Yang, executive chairman and secretary general of the association.
Output lagged behind sales over the first eight months of the year. China produced 11.49 million units and sold 11.58 million units over the period, according to the association.
The country's auto market in August, which recorded 1.02 million passenger vehicle sales and 303,300 commercial vehicle sales, rebounded after having registered month-on-month sales declines for four months in a row.
"Figures collected by CAAM from six major automaker groups showed that as of July their inventories increased by 29 percent from levels at the beginning of the year. Whereas their sales were up 34 percent over the same period," said Dong.
Dong said the association also surveyed 19 leading automakers in China and found they are well aware of current dealership stock and have been adjusting inventories in line with market demand.
Chen Bin, director of the Department of Industry of the country's top economic planner, told a forum in Tianjin that capacity plans for 2015 by the 30 leading automakers has surpassed 31 million units.
"The (target of) 31 million units is not high enough based on (expected future) demand of 25 million units," said Dong, who has said several times this year that it is normal for capacity to surpass 10 to 15 percent of actual market demand.
China Automotive Technology & Research Center's Director Zhao Hang agreed with Dong stating, China's auto capacity is not excessive. The government-affiliated body, which started releasing monthly auto sales data in April based on inventories at both automakers and dealers, said the average inventory period had fallen to 57 days in August from July's 58 days.
Dong raised the full-year vehicle sales forecast to 17 million, boosting the previous estimate of 16 million last month and 15 million last year.
The association has asserted that as of 2020, technological advancements in the industry will be at a world-class level.
Wednesday, the State Council listed the new energy vehicle sector as one of seven strategic new industries to receive government support.
