Automobile Manufacturing in China: Benefiting from Favorable Government Policies
Since the second half of 2008, global financial crisis has had a major impact on the Automobile Manufacturing Industry in China. Growth of sales volume of automobiles started to slow, and profit margins of manufacturers decreased significantly.
In order to counteract negative impact of global financial crisis, the central government issued a series of favorable policies to stimulate the development of this industry in 2009, including reduction in the automobile purchase tax, direct subsidies to rural households purchasing automobiles, and subsidies to automobile owners replacing old autos with new autos.
In 2009, sales volume of automobiles totaled 13.64 million units, up 46.2% from 2008. Sales volume of passenger vehicles amounted to 10.33 million units, up 52.9% from 2008, while commercial vehicles realized sales volume of 3.31 million units, up 28.4% from 2008.
In 2009, the pruchase tax of passenger vehicles with displacement less than 1.6L was reduced to 5% from the original 10%. Sales volume of these passenger vehicles therefore experienced significant increases in this year. In 2009, sales volume of passenger vehicles with displacement less than 1.6L amounted to 7.2 million units, up 71% from 2008, accounting for 70% of the total sales volume of passenger vehicles.
Passenger vehicles with displacement less than 1.6L are levied purchase tax of 7.5% in 2010. Sales volume of automobiles continues increasing in the first three months of 2010 due to continuing positive impact of favorable government policies. According to China Automobile Industry Association, sales volume of automobiles amounted to 1.6 million units in January 2010, and peaked at 1.74 million units in March.
However, sales volume of automobiles started to decrease in April and May due to seasonal cycles and weak demand from foreign markets. For the first five months of 2010, the industry realized sales volume of automobiles of 7.6 million units, including passenger vehicles of 5.68 million units and commercial vehicles of 1.92 million units.
Key Statistics of the Automobile Manufacturing Industry in China, 2009
| Indicator | Value | Year-on-year Growth (%) |
|---|---|---|
| Industry Revenue (USD Million) | 233326.6 | 23.2 |
| Industry Profit (USD Million) | 17966.2 | 53.0 |
| Exports (USD Million) | 5704.2 | -46.3 |
| Imports (USD Million) | 18986.5 | -3.4 |
| Automobile Output Value (Thousands Units) | 13791.0 | 47.6 |
Source: National Bureau of Statistics, ACMR Industry Research
By courtesy of ©ACMR-IBISWorld Reports, 2010
ACMR ALL CHINA MARKETING RESEARCH CO., LTD
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