China Light Vehicle Sales Outlook Dims, IHS Cuts 2015 Forecast
September 10 2015 - 7:38AM
Business Wire
IHS cuts 2015 light vehicle sales forecast in China to 23.4
million; more deeply for 2016
The forecast for light vehicle sales in China is expected to
decline 3 to 4 percent from previous estimates for 2015, according
to new analysis and a forecast update from IHS Automotive, the
leading global source of critical information and insight to the
automotive industry and part of IHS Inc. (NYSE: IHS).
IHS Automotive has reduced its full year 2015 light vehicle
sales forecast for China to 23.4 million units, reflecting a growth
rate over 2014 of just 1.4 percent, compared with its previous
forecast of 4.4 percent year-over-year growth. Recent sales data --
when combined with the slump in the Purchasing Manager’s Index and
currency devaluation in early August, as well as the summer stock
market rout -- suggests a significant rebound in light vehicle
sales is unlikely in the coming months. However, sales activity may
not be as negative as current media reports suggest.
The sales slowdown is widespread throughout China, according to
the IHS analysis of its proprietary province- and city-level
forecast, along with the current economic climate. Nearly one in
four cities (out of 340 monitored by IHS) is reporting declining
light vehicle sales.
IHS preliminary readings of car sales in China for the month of
August suggest some stabilization and that the selling rate has
improved during the month, although it is still likely to show a
small year-over-year decline estimated to be less than 2 percent.
If sales in August do follow these readings, once all figures are
reported, this would mark the third consecutive month of declines
in China. This has happened just once in the past 15 years -- in
2008, at the height of the global recession.
Retail vehicle registrations have maintained volumes far better
than wholesale vehicle sales, which may provide stronger guidance
for dealer orders. However, registration data also show that the
selling pace for new customer deliveries has stalled since March of
this year, according to the analysis.
IHS analysts are also looking ahead to 2016 and still expect
some growth in light vehicle sales next year, though just about 3
percent, to 24.2 million units. This small improvement in sales is
based on a series of technical factors being closely monitored by
IHS analysts, including the benefits of lower car prices and lower
interest rates. Other factors include the ramp up of forced
replacement of older, polluting cars based on the government
vehicle scrappage program aiming to scrap 14 million yellow label
vehicles between 2014-2017; and less influence from new cities
introducing license plate limits and from the light commercial
vehicle sector (already down 10 percent this year). IHS also
expects less of a correction in dealer inventories in 2016, which
is exaggerating the current wholesale vehicle sales decline.
It is anticipated that several of these factors may influence
light vehicle sales during the early months of 2016, which could
prove the most difficult. Overall market development will depend on
how long it takes consumers in China to adjust to the speed of the
economic slowdown.
Looking further ahead, early indications for light vehicle sales
reflect a modest recovery in 2017 to nearly 26 million units and
26.9 million in 2018. A historic and future look at the current IHS
Automotive flight vehicle sales forecast for China is as
follows:
Light Vehicle Sales in China, 2013-2018
2013 2014
2015 2016 2017
2018 Sales (Millions) 21.4 23.1 23.4 24.2 25.9 26.9 Change
15.0% 8.1% 1.4% 3.4% 6.9%
3.8% Source: IHS Automotive, September 2015 Light
Vehicle Sales Forecast © IHS 2015
IHS Automotive analysts continue to monitor the
situation closely and are currently working with clients and
industry partners to help navigate challenges and adjust plans for
future business reflective of some of these changes.
About IHS Automotive
(www.ihs.com/automotive)
IHS Automotive, part of IHS Inc. (NYSE: IHS), offers clients the
most comprehensive content and deepest expertise and insight on the
automotive industry available anywhere in the world today. With the
integration of Polk in 2013, IHS Automotive provides expertise and
predictive insight across the entire automotive value chain from
product inception—across design and production—to the sales and
marketing efforts used to maximize potential in the marketplace. No
other source provides a more complete picture of the global
automotive industry. IHS is the leading source of information,
insight and analytics in critical areas that shape today’s business
landscape. IHS has been in business since 1959 and became a
publicly traded company on the New York Stock Exchange in 2005.
Headquartered in Englewood, Colorado, USA, IHS is committed to
sustainable, profitable growth and employs about 8,800 people in 32
countries around the world.
IHS is a registered trademark of IHS Inc. All other company and
product names may be trademarks of their respective owners. © 2015
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IHS Inc.Michelle Culver, +1 248 728
7496michelle.culver@ihs.comorPress Team, +1 303 305
8021press@ihs.com
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