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Why GM Is Back Below Its IPO Price, Part 2 - Chinese Auto Sales Collapse At Fastest Rate In 3 Years
A week ago we warned of the odd build up in inventories in GM's parking lots in China. It appears those warning were spot on as WSJ reports, China’s new car sales recorded the first year-over-year decline in more than two years in June, as slowing economic growth and falling stock markets hit the world’s largest auto market. “2015 will be an off-year for the Chinese car market,” said Dong Yang, a vice president for the auto manufacturers’ association, and we note auto dealers are seeing orders cancelled at a frenetic pace as it appears stock margin calls are draining the liquidity car-buyers once had.
As The Wall Street Journal reports,
China sold 1.51 million passenger vehicles last month, down 3.4% from a year earlier, the China Association of Automobile Manufacturers said Friday. That compares with a 1.2% year-over-year rise recorded in May and a 3.7% increase in April.
The performance was the worst since February 2013 when car sales fell 8.3% on-year during the weeklong Lunar New Year Holiday when car showrooms are closed. Stripping out the holiday factor, the last time China’s car market posted a decline was in September 2012, when a territorial dispute between Beijing and Tokyo over a group of uninhabited islands in the East China Sea hit demand for Japanese cars.
... also cut its growth forecast for China’s automobile market in 2015 to 3% from the previous 7%.
“2015 will be an off-year for the Chinese car market,” said Dong Yang, a vice president for the auto manufacturers’ association. He said the slowdown was caused by a confluence of factors including the cooling economy, increasing restrictions on car ownership to combat congestion and pollution and stock market volatility.
“Neither a bull market nor bear market does good to car sales. Our surveys of dealers show that visiting volumes to car showrooms dropped sharply in the first-half,” said Mr. Dong.
...
“The painful market adjustment currently under way is far from over,” he said.
* * *
As we noted previously, it appears there just is no more room to stuff inventories in its Shenyang, Lianing province parking lots (as China has become the new car graveyard over the last 3 years)
* * *
And finally, there is an even bigger problem...
- *CHINA PASSENGER CAR SALES HIT BY STOCK-MARKET ROUT, CUI SAYS
- *CHINESE CANCELLING CAR PURCHASES ON STOCKS ROUT, PCA'S CUI SAYS
They really better keep that massively inflated bubble of a stock market up or things are about to get much worse.
Because inventories are surging...
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Same pictures from 2008?
Not to worry. Once the Chinese government allows the people to sell their stock again, they'll be on a buying spree with all their new wealth.
Uber could use them to deliver Chinese food all over the country.
"Everybody gets a car!" - Oprah
https://youtu.be/WmCQ-V7c7Bc?t=2m54s
We To Roh.
GM is in the red and ISIL is feasting on the dead.
Maybe the Chinese just got a bit smarter and realized they really don't have to buy such crappy cars when they have so many better options around...
Hondas, Toyotas & Nissans sold in the United States have more made in the USA parts content (and are more likely to be assembled in the US, also), then almost anything from GM - a GM which uses more Chinese made parts & components than any other multinational automaker (should rename it Guangzhou Motors).
Buy American! (Honda, Toyota...)
As a bonus, your vehicle won't start falling apart at 35,000 miles nor die on the expressway at 75 mph.
GM also = UAW, which is to say their product is anti-American made. Never ever buy UAW.
The only amerikan kar I will ever buy will be second hand, have 100k plus mileage, and still be running. It will be the exception to the rule, priced at a tremendous discount, and not one dollar of mine will go to any car company or fucking union.
No Jobs - No Demand
Business is way off - No Demand
You can't make it only selling trucks. Unless you shut down car production.
No Demand
No Demand
No Demand
Right, and 3% growth for 2015 is a 'collapse'. Other things are collapsing, but vehicle sales in China isn't one of them.
Trillions vaporized in the Chinese stock market and so yes China is fucked.
Yeh, coz 1.4 billion Chinese people are ALL invested in the Chinese stock market!
The Chinese move back to the countryside and eat bugs instead of KFC.
No more cancer w/in a generation
Pretty sure cancer was around long before KFC. Or were you talking about the cancers you get from being fat?
It has nothing to do with KFC ... it's China's skyrocketing to industrialization with zero regulations. A systemic crash would clean up China for the better. You do realize cancer has exploded there. The villages downstream from these giant factories and coal plants have a life expectancy of like 40 now because of it.
Google needs to get that robot car system going, then the Chinese can have these drive around the apartment ghost towns with no humans involved. Burning gas, using up tires, creating pot-holes. Break a window!
LOL! Classic.
1) google's blocked in china
2) those robot car things will never happen in your lifetime. they are so fucking far out in the distance it's not even fucking funny. the sensors cost a fucking fortune, everything has to be high-res mapped repeatedly before the damn things go out. and even then, there is always someone standing by to take remote control (and they do it fucking all the time)
100 years, maybe you will see it, assuming you are still alive (you won't be)
Mmmm, what's GM's predicted forecast for the year 2015...?
GM makes horrible cars. It is only in business because the Nobel Prize Winner bailed it out.
Forward - but that may be impossible in a GM car.
GM tried to give them away but even ISIS has standards.
People actually buy camaros.....lol
A sporty IED.
... reminds me of GM's Chevy "Nova" ... in some latin american countries, it means "no go" ...
GM is drawing up plans for new model, Supernova.
... and I see in one of the pics they're still selling the Pontiac brand in China ... Poor Old Ning Thinks It's A Cadillac ...
Fun to see who gets out of them when they speed into the parking lot.
jeb! can only do so much
Agreed Just Observing...I am grateful they are parked in China...Perhaps they can coordinate a promotion with their equity market,,,buy 1,000 share of any stock & get a GM free...Offer does not appear to be limited by supply...So act now...or later...just whenever you can would be really helpful
'...I am grateful they are parked in China...'
Not so fast........they're parked here in NJ as well. All along the seaboard.
heh heh...
nobel prize winner...I had all but forgotten that. Kudos for the trip down mammery lane
Nobel Piiss Prize, to be exact.
My wife loves it when I park Mr. Dong in her garage.
Just mind the pit.
Beware of balloon payment when she decides to trade in compact model for full-size.
The garage has expanded with each additional kid, probably hold a full size with luggage rack.
There's always a Hummer, but those have been discontinued for married folk.
Assume:
Wife does not read ZH
Wife does not own fire arms
You have cheap, dull knives in the kitchen
Chinese likely to stop buying Detroit real estate as well.
That first overhead picture looks like an abacus, which it is, in a way.
Who in China needs a car when you can haul tons of gear on a bike?
You can buy a lot more stocks if you pledge your car instead of your bike.
I have many friends in the car business and they say sales are way off and that "the numbers" are being manipulated and revised. Showroom traffic is off....AND Interent queries are off, too. When people DO come into the dealerships, they are asking for crazy discounts and then leave when they don't get them.
Moreover, friends in the real estate business say business is muddy because lots of people can't get loans.
Keep your eyes and ears open folks.
http://www.theliberist.com
Cash for Clunkers II?
That's. What I'm waiting for. But they better triple that $4500.
Not many clunkers left. Maybe they should make it Cash for Not so Used Cars
Bring them to Amerika, we need somewhere to sleep.
The nest "tiny house" craze.
Already here.
http://www.seattletimes.com/seattle-news/politics/rethink-single-family-...
they will burn through this inventory very quickly,
ever see a compilation of Chinese car crashes.....wow
Krugman says break car windows for stimulactic spending
Even China thinks GM products have quality issues.
Chinese auto sales in China collapse, Chinese auto sales in Michigan, CA, Vancouver Africa and central & South America grow
There fixed it.
Great article.
By the way, I understand the need for pop-up ad revenue and such here at ZH, BUT CAN YOU PLEASE GET RID OF THAT FUCKING BOBBLE-HEADED DWARF?
It's over the top creepy, in a kim kardascian/bryce jenner way
Have they tried building ride-share rockets? Just a thought.
I think we all missed the big picture...look at all the cars on the lots...they are all compacts...what the Chinese man wants is a big mucho truck, a large 4x4, a car the size of a towncar...don't see any of those on the lots..why..all sold ...farmers don't need compacts,,they need rugged American Obama trucks that kick butt...wake up GMC..
Over there, cars are taxed partly on their engine size so anything over 2 liters is much more expensive to register. That's why there are some grossly underpowered models, like a BMW 518i with a 1.8 liter engine, where the rest of the world gets nothing smaller than a 525i.
No Demand
In Beijing at least, they are getting ready to crack down on the shitmobiles on the roads. All those minivans and 3-wheelers and agri trucks are about to get shitcanned. New regulation coming into effect will be based on emissions testing with zero exceptions. If your car doesn't hit the requirements, it's scrapped and you have 6 months to buy a new car or lose your plate entirely. There is a fucking flood of shitty domestic SUVs hitting the streets now. People are getting cheap license plate holders that can semi-replace their minivans, they are not going to get a fucking GM anything.
I parked my car in the big lot over there, but I can't remember exactly where. Don't worry, I'll find it. In five years.