Vehicle imports see sharp decline in Nov

Sales of imported vehicles in China showed a year-on-year drop for a second month in a row in November, placing even more pressure on dealers to decrease their inventories.

According to the General Administration of Customs, China imported 79,800 vehicles in November, down 26.1 percent year-on-year. Of those, 78,756 were passenger vehicles, a number down 25.9 percent.

Even so, the country's imports still increased year-on-year in the first 11 months of 2012. During that period, China imported 1,017,529 vehicles, up 12.4 percent from the first 11 months of 2011.

Of the vehicles imported during the period, 996,511 were passenger vehicles, up 12.8 percent year-on-year, according to the administration.

During the past decade, vehicle imports had shown an average year-on-year increase of more than 30 percent, according to the China Association of Automobile Manufacturers.

Statistics show that 1.04 million imported vehicles were sold in 2011 in China. Of those, 1.01 million were passenger vehicles, up almost 30 percent year-on-year.

That rate of increase was 26 percentage points higher than that for domestic vehicles.

"The import industry is now entering a period of structural readjustments," said Luo Lei, deputy secretary-general of the China Automobile Dealers Association.

"The slowdown will continue in the coming year, though, and vehicle imports will increase at a rate of more than 10 percent over the next two years," he said.

Luo attributed the expected increase to Chinese consumers' greater and more discerning demand for functional vehicles, as well as the broader selection of vehicle models that automakers are offering in the world's largest automobile market.

"Sport utility vehicles will be the chief driving force," Luo said.

China Automobile Trading Co Ltd, the largest vehicle importer in the country, said more SUVs were imported than any other type of vehicles in November.

China imported 45,000 SUVs in the month, a number down 19.6 percent year-on-year, which was the smallest decline seen among vehicle imports for November.

The same month saw 30,400 cars imported, a number down 33.3 percent, and 2,900 multi-purpose vehicles, down 31.9 percent.

Luo said the sharp decline, which exceeded sellers' expectations, caused dealers of imported vehicles to have surplus inventories and led more than half of them to record losses.

"The high increase of 80 percent in 2010 and the more than 30 percent in 2011 in the imported sector led dealers to target a 40 to 50 percent increase for this year," Luo said. "Because of that, many of them had placed a lot of orders."

Luo advised dealers to slow down their pursuit of expansion plans and to explore new lines of business, saying that will help lower the risks entailed in their current emphasis on new vehicle sales.

"They should pay more attention to trade in second-hand vehicles, automobile financing and after-market services," Luo said.