China auto show will gloss over the industry's current slump

[pupp1]

China auto show will gloss over the industry's current slump
As Shanghai prepares to roll out the carpet next month for China's biggest auto show, the latest industry numbers may put a damper on the event.

In the first two months of the year, passenger car output fell 8 percent to 301,200 units across China. Car sales declined even more sharply -- by 16 percent -- to 286,100, extending a slump begun last summer after the government clamped down on credit to slow a rapid economic expansion.

The decline doesn't refute optimistic forecasts that China would become one of the world's largest vehicle markets -- it is already the third-biggest after overtaking Germany.

But the slump vindicates skeptics who cautioned that China's car market would not grow in a straight-line progression.

Because automakers are now slashing car prices in China to prop up demand, their overall earnings have shrunk even more than sales.

According to China's National Bureau of Statistics, the profits of China's automakers and car parts suppliers fell 62 percent in the first two months of the year.

Excluding suppliers, earnings of China's automakers plunged by 78 percent, with more than half of them registering losses.

The National Bureau of Statistics did not identify the industry's winners and losers, but the small players in China's motley auto industry clearly suffered more.

Still, some large automakers are struggling, too. Among China's 34 biggest carmakers, just over a third lost money in the first two months of the year and 10 reported profit declines. '
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[FightingChance]

China is incredibly scary to consider. The capitalist communist mish-mash causes very bizarre fluctuations in day to day happenings there.

It still feels like the U.S. and China will come nose to nose when natural resources end up in a tug of war.

[Proetus]

This is the show where Chery will be showing 3 of the vehicles they plan on selling in the US.

At the Shanghai auto show next month, Chery will display a hard-top convertible sports car designed by Pininfarina. Such a car would normally set a customer back $35,000 or more. But Chery can put it on the market for $15,000, Bricklin says.