Source: General Administration of Customs Website
According to the Customs statistics, China imported 309,000 autos worth USD 11.64 billion in the first three quarters of the year, registering a growth of 40.4% and 55% respectively compared with those of the same period last year (the same below). September records an import of 27,000 autos, registering a growth of 4% that is 39.7 percentage points lower than that of the same period last year and the first time for China’s monthly auto import growth rate to fall below double digits in the last 23 months.
In the first three quarters, China’s auto import market shows the following characteristics:
I. Japan, EU and Korea are the main sources of imports: in the first three quarters, China imported 127,000, 104,000 and 40,000 autos from Japan, EU and Korea respectively, registering a growth of 60.4%, 38% and 28.4% respectively. Three imports from the foregoing three countries account for 87.5% of China’s total auto imports in the same period which is 3.3 percentage points above that of the same period last year.
II. Foreign-funded enterprises play a prevailing role and imports by state and private enterprises show robust growth. In the first three quarters, foreign-funded enterprises imported 204,000 autos, registering a growth of 32.1% and accounting for 66.1% of China’s total auto imports in the same period. Meanwhile, state-owned and private enterprises imported 55,000 and 43,000 autos in the same period, registering a growth of 64.1% and 59.5% respectively.
III. Higher proportion of high-displacement autos among imported autos: in the first three quarters, China imported 135,000 gasoline-fueled autos with a displacement of over 3L, registering a growth of 61.4% and accounting for 43.8% of China’s total auto imports in the same period that is 5.8 percentage points higher than that of the same period last year. In September, gasoline-fueled autos with a displacement of over 3L amounted to 12,000, registering a drop of 5.2% compared with the same period last year.
On September 1, China increased the auto consumption tax from 15% to 25% for autos with a displacement between 3.0L and 4.0L and from 20% to 40% for autos with a displacement of over 4.0L and decreased the tax from 3% to 1% for autos with a displacement of 1.0L and below. With such adjustments, autos with a high displacement will have a substantially increased import cost, i.e. 13% higher cost for passenger autos with a displacement between 3.0L and 4.0L and 33% higher cost for passenger autos with a displacement of over 4.0L. For that reason, domestic auto dealers imported autos with high displacements prior to the effectiveness of such a rule so that the inventory of high-displacement autos is sufficient currently. In the meantime, some consumers also purchased in advance in light of such a tax increase and corresponding policies so that there was a considerable drop in high-displacement auto import in September.
It is noteworthy that the market share of low-displacement autos has shown a down trend in recent years. In the first half of the year, only 129,000 low-displacement autos with a displacement of not over 1.0L were sold, registering a drop of 3.9%. Although China Passenger Car Association statistics show that low-displacement autos underwent the highest monthly growth in September, the development of low-displacement autos still faces plenty of obstacles in China: firstly, reduction of consumption tax does not substantially decrease the costs of low-displacement autos and their profitability much lower than that of deluxe high-displacement autos; secondly, traditional consuming preferences have driven most domestic consumers to buy middle and high-grade autos with a high displacement; thirdly, low-displacement autos develop slowly technologically as they are mostly of a domestic brand and joint-venture manufacturers are reluctant to produce them considering their low profitability. Therefore, the design models of currently available products in the market are outdated with an average quality and thus are not attractive enough to consumers.
Proposals (omitted)
