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Customer LoginsSame-Day Analysis: Chinese vehicle sales increase 11.79% y/y to 2.2 mil. in October
Production and sales of vehicles in China have risen considerably in October, on the back of stronger growth in the passenger vehicle (PV) market, as well as growth in the commercial vehicle (CV) segment, summary data from the Chinese Association of Automobile Manufacturers (CAAM) show.
A total of 2,188,700 vehicles were produced in China in October, marking an increase of 15.54% compared with sales in September, and a rise of 7.06% compared with October 2014. Sales also increased in October, with total volume wholesale deliveries hitting 2,221,600 units, up 9.72% month on month (m/m) and 11.79% year on year (y/y).
Light-vehicle engine types in China in 2015.
© IHS Automotive
Passenger vehicle (PV) production and sales both rose in China during October, although sales in the segment grew at a faster rate. A total of 1,899,700 PVs were produced in October, up 17.21% m/m and 8.06% y/y, while a total of 1,936,900 PVs were sold in the month, up 10.6% m/m and 11.79% y/y. Please note that the CAAM defines PVs as including sedans, sport utility vehicles (SUVs), multi-purpose vehicles (MPVs), and minibuses.
China's commercial vehicle (CV) production and sales were also positive in the month, with total production of the segment hitting 289,000 units, up 5.64% m/m and 0.91% y/y, while sales were 284,700 units, up 4.06% m/m and 2.29% y/y.
On a year to date (YTD) basis, a total of 19,280,300 vehicles were produced in China in October, marking an increase of 0.02% y/y. Total market sales were 19,278,100 units in the first 10 months, up 1.51% y/y.
The PV market dominates the vehicle market in China, with a total of 16,506,000 units produced in the first 10 months of the year, up 2.20% y/y, while a total of 16,484,700 vehicles were sold, up 3.89% y/y.
The CV market, however, continues to witness declining sales on a YTD basis, with a total of 2,774,300 units produced in China in January-October, down 11.25% y/y, and a total 2,793,400 units were sold, down 10.58% y/y.
Passenger vehicle market
The PV market witnessed a sudden growth in sales in China during October, with sales jumping 10.6% over the volume in September, hitting 1,936,900 units, up 13.34% y/y. However, the PV market is going through a transformation as the mainstay sedan segment begins to witness a steady decline in growth, while the SUV market has grown at very strong double-digit rates.
In October, a total of 1,054,400 sedans were sold in China, up 10.8% m/m and 0.20% y/y. However, SUV sales in October hit over half-a-million units at 622,000 units, up 9.8% m/m and 60.56% y/y.
The MPV segment's sales hit 192,800 units in China during October, up 19.56% m/m and 4.63% y/y, while sales of minibuses hit 67,600 units, down 5.81% m/m and 20.7% y/y.
On a YTD basis, a total of 16,484,700 PVs were sold in China in October, up 3.89% y/y. The sedan segment had total sales of 9,249,700 units in the first 10 months of the year, down 7.9% y/y, while the SUV segment had sales of 4,706,200 units, up 48.37% y/y. The MPV segment sales hit 1,615,700 units in January-October, up 7.78% y/y, while the minibus segment had sales of 913,000 units, down 20.88% y/y.
Outlook and implications
Chinese light-vehicle engine types in 2020.
© IHS Automotive
The PV market continues to be the main segment of the vehicle industry in China, accounting for over 87% of total sales in October, while on a YTD basis the segment accounted for 85.5% of the total market. The government's new policy to strengthen sales in the PV segment by offering a 50% drop in the new vehicle purchase tax for vehicles with engines of 1.6 litres and smaller has provided a significant lift in October. The government's aim to target the PV segment with its 'quick fix' remedy, therefore, has helped lift the overall vehicle market, considered a pillar industry in China.
The new policy, which centres on strengthening sales of vehicles fitted with engines of 1.6 litres displacement and less has certainly lifted sales prospects for the PV segment in China. This new policy also indicates the overall growing trend in China for vehicles to be fitted with smaller displacement engines, coupled with turbochargers.
IHS Automotive's Light Vehicle Engine Forecast data highlight the sales growth rates forecasted for SUVs fitted with engines of 1.6 litres displacement and less. In 2015, the data indicate that SUVs with engines of 1.6 litres and less account for around 46.31% of the total SUV market in China. However, in 2016 this rises to 46.3% and significantly thereafter. By 2020, the volume of small-engine SUVs will account for over 59% of the total number of SUVs produced in China, our forecasts show.
Indeed, small-engine vehicle sales are growing across the light-vehicle market in China. In 2015, the volume of vehicles fitted with small engines (1.6 litres and less) accounts for around 63.08% of the total Chinese light-vehicle market. However, by 2020, vehicles with small engines will account for 68.8% of the light vehicle market in China, our engine forecasts show.
Within the light-vehicle market this year, the 1.6-litre engine currently accounts for around 21% of the overall market, with 1.5-litre accounting for 23%. Larger engines account for 37% of the market collectively. By 2020, the percentage of vehicles in the light-vehicle market fitted with larger engines will drop, while the proportion of smaller-engine vehicles will increase, our forecasts show.