3 reasons to sell cars in China a temporary event

Edit :Noha Al-Nahas

Direct: China has managed to win some victory over its suffering in the automotive sector, but is this improvement still going on?

China pbadenger car sales recorded in May/The first increase of the year, an increase of 4.9 Percent.

Figures have improved markedly since April/Last April, when sales dropped by 18 After the fall in February/February at the lowest level since 2013.

Size The sales Cars Chinese Sure Orbit 10 years

But nevertheless informed badyzes published by the agency "Bloomberg Oppenon" Not Satisfaction Serious For those numbers, Where he is followed with performances based on 1 2 One month in a row, you will notice that it is the lowest since 2016, Noting that the recovery should last for some time and not always.

One of the explanations of the figures better than those of previous months is that after a drop of about 1 2 Month comparison on an annual basis will look better.

But the most important factor behind this recovery should be Standards Shows New Which was launched last week across a number of Chinese provinces.

Car dealerships are not ready to keep cars for several months that they could no longer sell after changing the use of their inventory, which means that there is more enough cars outside the shops to meet the demand..

In the last month, things seemed to have reached their peak: cars meeting the new criteria were reaching the exhibition halls, while discounts on unsatisfied cars were reaching very high levels..

These significant price reductions are at the origin of the payment 39 Percentage of traders reported losses last year.

But the crisis of the auto industry in China is not over yet and it really needs the auto industry to be realized Recovery In Request ConsumerBut the ability of consumers to spend is under pressure right now.

For example, growth in retail sales is currently weak, after posting the smallest gain ever recorded in April/Nissan and so on 7.2 Percent, and the rate of inflation has reached a high level in about 6 Years are currently recorded 2.7 In May/May and June/June.

As for the inflation of food prices, it suffers in particular 7.7 Percent.

This means that consumers now have less money to save.

And loans Cars What is a traditional tool to support the market is unlikely to offer a lot of help.

The first reason is that the number of vehicles sold by this mode of financing is low compared to the total sales volume, because it reaches a level of 30 AT 40 Market and the general weakness of Chinese credit conditions have also not contributed to this option..

Social finance remains (A broader bank credit index) Which historically follows the growth of car sales falls close.

Without The growth The loans Consumer The The sales Cars Chinese Will suffer

Last week, Chinese steel manufacturers have called for the replacement of this system in the iron ore market, a call for price reduction that shows only the weakness of the market..

The company's shares remain "Bosch iron and steel" The largest Chinese steelmaker and the largest producer of spiral coils used in the manufacture of motor vehicle panels, traded with low odds.

While the trade war and signs of economic weakness continue into the second quarter, the consumer may need more stimulus to break the current stalemate.

The long-term situation is not as optimistic as that of the working-age population, and strict registration rules to avoid congestion seem to indicate that the period of strong growth in car sales in China is over..

And while the expectations of the company "Brighton Water Hough Cooper" Being a sales car in 2030 top 30 In comparison with the level in 2018, This pace is slower than expected for European growth 34 Percent.

The good news for car salespeople in China, is that after the landing, they continued. 1 2 The bad news is over, the bad news is that good times also come from the past.