The company’s latest data shows that in August 2013, sales of locally‐made light vehicles reached 1.57 million units, climbing 10.3% on the previous year. Given year‐on‐year growth rates ranging from 8.8% to 9.7% for light vehicles over the previous three months, LMC adds that China’s light vehicle market has been running strongly with consistent improvements recently.

LMC attributes the improvement of light vehicle sales in August to light commercial vehicles, with 0.37 million units sold in August, up by 6.5% year‐on‐year, an improvement on the average growth of 1.4% over the period of May to July.

It adds that the passenger vehicle market has remained on track since May. With 1.19 million units moved in August, the locally‐made passenger vehicle market expanded by 11.5% on a year ago, nearing the average growth rate of 12.0% registered over the previous three months.

LMC notes that these sales results were achieved while in a comparatively neutral environment.

It also says that unlike the fluctuating situation over the previous year, the dealer inventory level has remained quite stable since Q2 2013.

The company adds its view that China’s economy did experience a slowdown in Q2 2013, but fortunately before it was able to impose any obvious impact to car purchasing sentiment, in August the economic situation turned a corner.

LMC Automotive said: ‘With these key neutral factors in mind, we believe that China’s light vehicle market, and particularly the passenger vehicle market, is on course to achieving its potential growth rate at the current stage. Single‐digit growth was once the mainstream perspective to China’s passenger vehicle market for the upcoming years, while more recent regional dynamics are clearly telling a different story.’

‘Inner land provinces, such as Hunan and Hubei, have been consistently increasing their contributions to the overall market growth, with passenger vehicle sales in those areas growing over 20% in the first half of this year. While coastal areas are still the backbone of continuous market growth, passenger vehicle sales in some provinces, such as Jiangsu and Shandong, have managed to achieve year‐on‐year growth of over 10% in the same period.

‘Aided by these two drivers, we believe that the potential market growth for passenger vehicles will fall under the range of 10%‐15% in the near future. This potential growth is, however, exposed to the risk of car purchasing limits implemented in some tier‐2 cities.Over the next 2 months, the market will see a higher growth rate, mainly due to a lower base on the year‐on‐year comparison as a result of the Sino‐Japan island disputes. Wholesales of Japanese OEMs were heavily affected by anti‐Japanese sentiment last September and October, with the year‐on‐year growth rates of the passenger vehicle market in those 2 months achieving only 1.6% and 6.0% respectively.’

LMC concluded: ‘Considering these factors, the balance of risk to our current forecast for the year 2013, particularly with the annual growth of 13.5% for passenger vehicles, is still on the upside.’

China: Light vehicle market on course for potential growth rate, says LMC

LMC Automotive has forecast that China’s light vehicle market, and particularly the passenger vehicle market, is on course to achieving its potential growth rate at the current stage.

The company’s latest data shows that in August 2013, sales of locally‐made light vehicles reached 1.57 million units, climbing 10.3% on the previous year. Given year‐on‐year growth rates ranging from 8.8% to 9.7% for light vehicles over the previous three months, LMC adds that China’s light vehicle market has been running strongly with consistent improvements recently.

LMC attributes the improvement of light vehicle sales in August to light commercial vehicles, with 0.37 million units sold in August, up by 6.5% year‐on‐year, an improvement on the average growth of 1.4% over the period of May to July.

It adds that the passenger vehicle market has remained on track since May. With 1.19 million units moved in August, the locally‐made passenger vehicle market expanded by 11.5% on a year ago, nearing the average growth rate of 12.0% registered over the previous three months.

LMC notes that these sales results were achieved while in a comparatively neutral environment.

It also says that unlike the fluctuating situation over the previous year, the dealer inventory level has remained quite stable since Q2 2013.

The company adds its view that China’s economy did experience a slowdown in Q2 2013, but fortunately before it was able to impose any obvious impact to car purchasing sentiment, in August the economic situation turned a corner.

LMC Automotive said: ‘With these key neutral factors in mind, we believe that China’s light vehicle market, and particularly the passenger vehicle market, is on course to achieving its potential growth rate at the current stage. Single‐digit growth was once the mainstream perspective to China’s passenger vehicle market for the upcoming years, while more recent regional dynamics are clearly telling a different story.’

‘Inner land provinces, such as Hunan and Hubei, have been consistently increasing their contributions to the overall market growth, with passenger vehicle sales in those areas growing over 20% in the first half of this year. While coastal areas are still the backbone of continuous market growth, passenger vehicle sales in some provinces, such as Jiangsu and Shandong, have managed to achieve year‐on‐year growth of over 10% in the same period.

‘Aided by these two drivers, we believe that the potential market growth for passenger vehicles will fall under the range of 10%‐15% in the near future. This potential growth is, however, exposed to the risk of car purchasing limits implemented in some tier‐2 cities.Over the next 2 months, the market will see a higher growth rate, mainly due to a lower base on the year‐on‐year comparison as a result of the Sino‐Japan island disputes. Wholesales of Japanese OEMs were heavily affected by anti‐Japanese sentiment last September and October, with the year‐on‐year growth rates of the passenger vehicle market in those 2 months achieving only 1.6% and 6.0% respectively.’

LMC concluded: ‘Considering these factors, the balance of risk to our current forecast for the year 2013, particularly with the annual growth of 13.5% for passenger vehicles, is still on the upside.’