BEIJING, May 14 /PRNewswire-Asia/ -- On April 19, 2009, Mr. Yao Jingyuan, Chief Economist of the National Bureau of Statistics of China delivered the "China Automotive Industry Climate Index" at the Summit Forum 2009 of the 13th Shanghai International Automobile Industry Exhibition.

The "China Automotive Industry Climate Index" was developed jointly by the China Economic Climate Monitor Center of the National Bureau of Statistics of China and Sinotrust, the largest automotive marketing solutions provider in China. The climate index that is based on the data of the production & sales, employment, cost, price, economic benefits, etc. of China auto industry and is supported by auto-related entrepreneurs and dealer managers with their insight into the auto market and business conditions reflects the operation and fluctuation situations of the auto market in China and forecasts the future market trend. With the aim of becoming the "weatherglass" of China's auto sector, the China Automotive Industry Climate Index provides strong support for the government's national macroeconomic control over the auto market and the creation of production and sales plans by automakers.

Monitor Results of China Automobile Industry Climate in the First Quarter of 2009

1. The Comprehensive China Automotive Industry Climate Index was 98.4

Having undergone the 2002 "blow-out," and 2005 "bottom-low," China's automobile industry was experiencing a quarter-on-quarter decrease. The 2009 first-quarter Comprehensive China Automotive Industry Climate Index was 98.4 (2001: 100, a year-on-year drop of 3.3 and a month-on-month drop of 0.7). Overall, the auto industry witnessed a quarter-on-quarter decline, but a turn for the better has taken place.

2. The Pre-warning Index of China's Automobile Industry was 83.3

The Pre-warning Index of China's Automobile Industry is a key index reflecting the climate of operating conditions of the auto industry. Beginning from 2008 second quarter, the pre-warning index has kept decreasing on a quarterly basis to 83.3 in 2009 first quarter, down 26.7 from 2008 first quarter and 3.4 from 2008 fourth quarter.

According to interval classification of pre-warning index, the 2009 first quarter index has fallen from the "green light zone" to the critical line between "green light zone" and "blue light zone." In light of the significantly increased sales volumes in March, the chance to go deeper into the "blue light zone" decreased.

3. The Entrepreneur Expectation Index of China's Automobile Industry was 125.0

The Entrepreneur Expectation Index is compiled basing on automakers' judgment on the existing development situation of the sector and their expectation for the performance. The 2009 first quarter index was 125.0, larger than 100, indicating that automakers held an optimistic attitude towards the auto market.

4. The Dealer Manager Index of China's Automobile Industry was 105.8

The Dealer Manager Index is compiled based on automakers' judgment on the existing development situation of the sector and their expectation for the performance. The 2009 first quarter index was 105.8, slightly lower than the Entrepreneur Index, indicating that dealers were not as optimistic as automakers.

In general, the 2009 first quarter auto industry was characterized by: 1. Beginning from 2007 fourth quarter, the climate index of China's auto industry kept declining on a quarterly basis; 2. Experiencing a downturn, the auto industry has taken a turn for the better; 3. The production and management of auto-related enterprises was a mix of joy and gloom, but as the macro economy warmed up, both stock digest and second-quarter sales forecast showed an optimistic outlook.

Forecast of the Climate Index of China's Automobile in the Second Quarter of 2009

In 2009, the government's efforts on stimulating economic growth and driving domestic demand have achieved certain effects. Except for foreign trade, employment and business profits, other indicators such as investment, consumption, industrial added value, electricity production, etc. all have taken a favorable turn. Also, there are signs of improvements in car production and sales after hitting rock bottom. However, we should take a more cautious approach to judging the real turning point of the recovering auto industry (especially in terms of price, exports and profits). The trend shows that the auto industry is still experiencing a downturn, and the climate index will still keep at a low level in a near future.

The plan for revitalizing the auto industry that was launched by the government at the end of 2008 has successfully boosted the auto market, and the policy of reducing in the tax rate for the purchase of passenger vehicles with engine displacements at or under 1.6L has also vigorously promoted the domestic sales of vehicles with a small engine size. The 2009 first quarter sales resumed positive growth, and both production and sales broke through 1,150,000 units, hitting a single-month record high. However, the economic benefit indicators such as business profit still kept decreasing, but the decrease has slowed down.

According to the Entrepreneur Expectation Index survey, 47.1% of executives of vehicle manufacturers estimated that the second-quarter sales will "slightly increase," and the proportions of those who believe that the sales will "significantly increase" and "slightly decrease" are 17.6% each. Regarding the second-quarter sales, 77.0% of entrepreneurs forecasted an increased production volume. Regarding stocks, the proportions of respondents who think that the stocks will increase, remain unchanged and decrease are 40.0%, 26.7% and 33.3% respectively. Regarding business operation, most automakers hold an optimistic attitude. When predicting the second-quarter revenues, the proportions of respondents who believe that the earnings will "slightly increase" and "remain unchanged" are 53.8% and 38.5% respectively, and only 7.7% of them answered "slightly decrease." In terms of capitals, 78.6% of respondents reported that their enterprises will have adequate working capitals, and 85.7% of them mentioned that financing is "easy" or "very easy."

According to the Dealer Manager Index survey, the estimated second-quarter sales are lower than that of the first quarter. The forecast by 14.5% of respondents is very good; 32.9% is good; 20.0% is average; 24.2% is poor; and 8.5% is very poor. At the same time, dealers' confidence on the second-quarter market demand also significantly decreased from the first quarter, with only 7.7% of them holding an optimistic attitude, down 12.5 percentage points. In terms of monthly sales, 11.8% of dealers expected that the first-quarter monthly sales significantly increase from the previous quarter, and 35.3% expected the sales to slightly increase from the previous wave. However, the estimated second-quarter monthly sales still significantly dropped from the first quarter, down 10 percentage points for those who expected a significant increase and down 9 percentage points for those who expected a slight increase. In terms of earnings, more than 40% of dealers forecasted a profit increase/loss decrease, and some of them forecasted a loss increase/profit decrease. The second-quarter forecast is basically the same as that for the first quarter.

About China Automotive Industry Climate Index

The China Automotive Industry Climate Index is developed jointly by the China Economic Climate Monitor Center of the National Bureau of Statistics of China and Sinotrust at the beginning of 2009. The index gives a quantitative description of the development trends of the auto market in China.

The quarterly-issued China Automotive Industry Climate Index consists of the Comprehensive Climate Index, Pre-warning Index, Entrepreneur Expectation Index, Dealer Manager Index and Buying-power Index, based on which, the Reports for the Research on China's Automobile Industry Climate is complied to analyze the reasons and trends of climate changes, estimate industry development period, identify the peak and bottom of industry development, and give pre-warning signals. All this paves the way for national macroeconomic control over the auto sector and the creation of production and sales plans by automakers and guides the sound development of China's auto industry with its accurate and most-up-to-date information.

About Sinotrust Auto Marketing Solutions

Sinotrust is a leading supplier of marketing solutions to the Chinese automotive market. With offices in Beijing, Shanghai and Guangzhou, we have a team of over 200 skilled professionals devoted to our automotive marketing solutions. Our Automotive Marketing Solutions integrate information, services and technology to provide marketing research services, marketing consulting & business strategy services and database marketing services, helping automotive companies position their products correctly, identify target markets accurately and conduct effective marketing so as to develop sustainable and profitable customer relationship.

About Sinotrust

Sinotrust is a leading supplier of marketing solutions and credit solutions in China. We collect, analyze and manage information about markets, consumers and businesses to provide marketing research, business information, consulting and database marketing services through integration of information, services and technology. Our products and services help you make better marketing and credit decisions and develop profitable customer relationships. Over 80% of the Fortune 500 companies operating in China are using different products and services of ours.

    For more information, please contact:

     Yumei Hui
     Sinotrust
     Tel:   +86-10-5926-7560 or 5926-7608
     Email: huiyumei@sinotrust.cn

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