China National Bureau of Statistics and Sinotrust Jointly Release '2010 Q2 China Automotive Industry Climate Index'

BEIJING, July 21 /PRNewswire-Asia/ -- China Economic Monitoring Center of China National Bureau of Statistics and Sinotrust International Information & Consulting (Beijing) jointly release the "2010 Q2 China Automotive Industry Climate Index."

1. The Comprehensive China Automotive Industry Climate Index registers 105.7 points

The China Automotive Industry Climate Index records 105.7 points in Q2 of 2010 (2001=100), down 0.1 point over the previous quarter, bringing the three-quarter rebound to an end. However, the data also shows that the growth of the industry remains stable thanks to the continuous stimulation of last year's rapid growth and government policy support. Following the "explosive growth" of 2009, the Chinese automotive industry is slowly returning to the path of a sustainable growth. In Q2 of 2010, under the influence of supportive government policies and an improving external environment, the Chinese automotive industry maintains a sound development momentum and the Climate Index remains high.

2. The Pre-warning Index of China Automotive Industry records 133.3 points

The Pre-warning Index is an important indicator reflecting the climate of the auto industry. In Q2 of 2010, the indicator remains at 133.3 points (the same as in Q1), still in the "Yellow Zone", showing a stable recovery of the automotive industry.

3. The Entrepreneur Expectation Index of China Automotive Industry registers 113.5 points

The Auto Industry Entrepreneur Expectation Index reflects automakers' perception of the current market situation as well as their future anticipations. The index registers 113.5 points in Q2 of 2010, down 2.1 points from the previous quarter, indicating that, although less confident than in Q1, entrepreneurs are still optimistic about the market development in Q3.

4. The Dealer Manager Index of the China Automotive Industry registers 91.7 points

The Dealer Manager Index demonstrates dealers' perception of the current market situation as well as their future anticipations. The index registers 91.7 points in Q2 of 2010, below 100 points for two successive quarters and 6.2 points lower than in Q1, showing that dealers are obviously not confident about their sales performance in the upcoming slack season.

Characteristics of China's Automotive Industry in Q2 of 2010

In summary, the following trends were observed during the survey: 1. the Industry Climate Index of Q2 remains high despite a slight fallback; 2. the indicators of production, sales, profit, tax, etc. all continue to rise although the growth shows a slowdown; 3. as the automotive industry's restocking process has almost come to an end and the current inventory has hit the upper limit of a reasonable inventory range, the growth of the capital occupation rate for finished products is losing its momentum, deserving automakers' close attention; 4. both the Entrepreneur Expectation Index and Dealer Manager Index continue to drop. However, entrepreneurs and dealer managers have divided opinions over the future operation of the automotive industry; this divergence will probably increase.

Forecast of the China Automotive Industry Climate Index in Q3 of 2010

According to the survey conducted with automakers and dealers, the "cooling off" caused by a declining sales close rate and the pressure from the increasing inventory, has already started to pass on to automakers from dealers. Although still optimistic, most automakers are now cautious in making predictions for the market development in Q3.

According to the survey, 69.2% of the entrepreneurs are optimistic about the aggregate market demand in Q2, but the percentage drops to 21.4% when they are asked to predict the aggregate market demand in Q3. This shows a decline in entrepreneurs' confidence. In addition, 25.1% of the dealer managers report that their sales record declined from 2010 Q1 and 30.8% of them believe the situation will deteriorate in Q3 because of the upcoming slack season.

In conclusion, as automakers have noticed the signs of a "cooling-off" of the market, the rapid growth in auto production and sales will slow down in Q3. In addition, dealers, who stand in the frontline of the automotive market, are very cautious, or even worried, about the market development in Q3 for the upcoming business slack season.

Full-year automotive market sales forecast of 2010

At the beginning of 2010, the Chinese automotive market continues to grow in line with the rapid growth of 2009. According to China Association of Automobile Manufacturers, China's auto sales volume in the first half of 2010 is 9.0161 million vehicles, up 47.67% over the same period last year. However, the growth rate over the rest of 2010 will decline due to the fallback in the Automotive Industry Climate Index and the high comparative base in the second half of 2009. According to experts' forecast, China's automotive market sales volume for the whole year of 2010 will reach 17 million vehicles, growing by 25% compared with 2009.

    For more information, please contact:

    Business Contact
     Yumei HUI
     Research Manager
     Sinotrust-Automotive Industry Research
     Tel:   +86-10-5926-7560 / 5926-7608
     Email: [email protected]

    Media Contact
     Sophia LIU
     Press Relations Manager
     Sinotrust-Marcom
     Tel:   +86-10-5926-7722
     Email: [email protected]

About China Automotive Industry Climate Index

The China Automotive Industry Climate Index was developed jointly by China Economic Climate Monitor Center of China National Bureau of Statistics and Sinotrust International Information & Consulting (Co., Ltd.) 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 Regional Buying-power Index, based on which, the Reports for the Research on China Automobile Industry Climate is compiled 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 Automotive 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 260 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.

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SOURCE Sinotrust