(Refiles to make clear annual sales in second par; adds
missing figure in par 19)
* China July car sales gain slowest in 15 months
* India's auto market sizzles, July sales at record high
* China may see Aug car sales growth slip into single
* India growth set to slow on capacity, supply contraints
* China auto executives sanguine on long-term outlook
By Fang Yan and Devidutta Tripathy
BEIJING/NEW DELHI, Aug 9 Car sales in China
rose at their slowest in 15 months in July as the world's
largest auto market cooled further after a roaring 2009, but
Indian sales hit a record high thanks to sound economic
prospects and new models.
China annual sales growth slowed to 13.6 percent last
month, a far cry from the 50 percent-plus growth seen earlier
this year and the 38 percent rise in India auto sales on a year
Car sales growth in China might slip to single-digit
percent rates in August as the traditional summer sales
doldrums set in, and Indian sales were also unlikely to
maintain their growth rates given capacity constraints,
"Auto sales have always been slow in the summer. But an
extraordinary strong 2009 and worries of about the economy are
also to blame," Sheng Ye, associate research director at
industry consultancy Ipsos' Greater China region said in regard
to China sales.
"We might see more traffic at showrooms by autumn, but it
won't be anything close to the packed showrooms and explosive
sales we saw in 2009."
China's Monthly year-on-year car sales growth since Feb
July 2010 June 2010 May 2010 Apr 2010 Mar 2010 Feb 2010
13.6% 19.4% 25.8% 33.2% 63.2% 55.3%
China auto inventory levels, meanwhile, have been on the
rise. Unsold vehicles rose to almost 1.5 million units in the
first seven months, up from just under 1 million units from
January to April, according to data provided by China
Automotive Technology & Research Centre.
A Chinese government think tank had warned earlier in the
month that the country's economy will cool further this quarter
as fiscal pump-priming starts to fade and the restocking cycle
draws to a close. [ID:nTOE673003]
"It took a combination of factors to slow down China's car
market and the economy is one of them," said Lin Huaibin, an
analyst with IHS Automotive.
A total of 946,200 cars, vans and sport utility vehicles
were sold in July, up 13.6 percent year-on-year, but down 9.3
percent from a month earlier, the China Association of
Automobile Manufacturers said on Monday.
Car sales in India jumped 38 percent to a record 158,764
units in July, compared with a 30.8 percent gain in June,
official data showed. [ID:nSGE67804S]
Four new models were launched in the south Asian country
from April, boosting traffic flows at showrooms nationwide,
analysts said. However automakers face capacity constraints, a
possible rise in interest rates and supply bottlenecks as the
festive season draws near, when demand for vehicles peak..
"The two largest carmakers Maruti (MRTI.BO) and Hyundai
(005380.KS) have limited capacities to scale up production and
meet the increased demand," said Jatin Chawla, analyst for
institutional clients of brokerage India Infoline.
He said Tata Motors' (TAMO.BO) Nano, which started
production from its dedicated plant in western Gujarat, would
be a likely beneficiary of the demand as the plant had the
capacity to produce 250,000 cars.
The Society of Indian Automobile Manufacturers had last
month forecast a 12 to 13 percent rise in car sales in 2010/11,
an estimate seen as conservative by analysts.
MARATHON NOT A SPRINT
Many Chinese industry executives, including Hu Maoyuan,
chairman of China's top auto group SAIC Motor Corp (600104.SS),
however, are sanguine about the outlook for the China market.
"China's auto market is just returning to its normal growth
pattern now. Last year's breakneck growth was good but abnormal
and, therefore, cannot last forever," Hu told a shareholders
meeting in July.
"The market will keep growing at a moderate pace in the
coming years. It's a marathon not a 100-metre race, and it's
impossible to run marathon like a sprinter."
Amid the on-going slow-down General Motors [GM.UL] is held
up relatively well, thanks to its broad product portfolio and
aggressive push for new models.
The No. 1 Detroit automaker reported a 22.2 percent sales
gain in China during July, with sales at its flagship car
venture with SAIC jumping 42 percent.
Toyota Motor's (7203.T) China sales climbed just 1 percent
which the company blamed largely on a lack of new models.
Warren Buffett-backed BYD (1211.HK) slashed its 2010 sales
target by 25 percent to 600,000 units after its June auto sales
fell by about a fifth from May. [ID:nTOE67303G]
Ford Motor's (F.N) China car venture, meanwhile, saw its
sales fall 6.3 percent in July from a year ago. [ID:nTOE67303G]
"Traditionally, we would see July sales at about 90 percent
of June, with August just slightly lower than July, before a
September sales bump coming out of the summer season," the U.S.
(Additional reporting by Janaki Krishnan in Mumbai and Michael
Wei and Ken Wills in Beijing; Editing by Lincoln Feast)