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Circular on Economy of Automobile Industry in Chongqing, January - April

The automobile industry across the country has witnessed its sales decline starting from the second half of the last year, influenced by the financial turmoil. Under this circumstance, China issued a series of policies encouraging reasonable consumption of the automobile and Chongqing Economic Commission also changed the strategy of “base production on market demand” to “promote market demand with production”, where remarkable achievements have been obtained. The increase rate of production and sale of Chongqing’s automobile industry grew dramatically in April, ever higher than the national level. The automobile industry has always served as the frontrunner of the industrial economy of Chongqing.
I. Overview
1. Automobile
The national production and sale volume of automobiles in April, following its growing trend in March, were amounted to 1,157,000 and 1,153,000, a y-o-y growth of 17.9% and 25.0%, which recorded a new high, in which there were 831,000 passenger vehicles sold, increasing by 7.59% and 37.37% on a month-on-month basis and a year-on-year basis respectively. According to data from January to April, the production and sale volume of automobiles totalled to 3,725,000 and 3,832,000, a y-o-y increase of 6.4% and 9.4% respectively. The increase rates are 4.5 and 5.5 percentage points higher than the last quarter.
The production and sales volume of automobiles in Chongqing totalled to 493,000 and 515,400 from January through April, a y-o-y increase of 14.9% and 22.9% respectively, in which the production and sales volume of the automobiles produced locally were amounted to 335,000 and 350,000, a y-o-y increase of 11.1% and 18.3% respectively.
There were 337,000 passenger vehicles produced and 360,000 sold in total, a y-o-y increase of 14.3% and 27.8% respectively, including 163,000 and 170,000 sedans produced and sold respectively, a y-o-y increase of -5.9% and 6.3%, while the production and sale volume of commercial vehicles totalled to 156,000 and 155,000, growing by 16.1% and 12.9% on a y-o-y basis.
From January through April, the top five enterprises and groups in China in terms of the sales volume of automobiles were SAIC, FAW, Dongfeng, Chang’an and Beijing Automobile. Chang’an Group ranked fourth.
2. Motorcycle
From January through April, the production and sales volume of motorcycle in China totalled to 7,908,000 and 7,780,300, a y-o-y decrease of 10.98% and 11.37% respectively.
From January through April, the production and sale volume of motorcycle in Chongqing totalled to 2,770,000 and 2,750,000, a y-o-y increase of 5.8% and 6.8% respectively, in which, there were respectively 2,170,000 and 2,240,000 produced and sold locally, rising by 3.6% and -2.9% on a y-o-y basis.
From January through April, the top ten enterprises and groups in China in terms of the sales volume of motorcycles were Dachangjiang, Loncin, Jialing, Jianshe, Lifan, Luoyang North, Qianjiang, Zongshen, Qingqi and Jincheng. The five backbone enterprises of Chongqing – Loncin, Jianling, Jianshe, Lifan and Zongshen - ranked second, third, fourth, fifth and eighth respectively.
3. Parts and Components
With the active promotion of the local government, all enterprises engaged in complete vehicle production strived to implement The Opinions on the Strategy of Accelerating Localization of Automobiles Parts and Components Production in Chongqing and speeded up the progress of supporting work for localization from January through April. The localization work is pushing forward heading for objectives as set by the local government. As the automobile industry recovered in Chongqing, the parts and components industry tended to achieve flourish both in production and sales with increase on a month-on-month manner.
From January through April, the parts and components industry for automobiles and motorcycles have accomplished industrial output vale of RMB 22.8 billion, a y-o-y increase of 5.9%, including RMB 12.6 billion for auto parts, increasing by 19.69% compared with last year, and RMB 10.2 billion for motorcycle parts, a y-o-y decrease of 7.28%.
II. Characteristics
1. Change the strategy from “base production on market demand” to “promote market demand with production”, where notable results were achieved. Chongqing Economic Commission adjusted the strategy for industrial operation according to changes in the market in time and officials of the commission led the delegation to the plants of the complete vehicles for survey and research. The enterprises were encouraged to enhance their confidence, to change their former ideas of de-inventory and “base production on market demand” and to expand production proactively to promote selling. The production volume of Chang’an, Yu’an and Lifan in April reached 33,000, 8,700 and 13,300 respectively, which hit the new high since the establishment of the plants. The production and sales volume of automobiles in Chongqing realized two-digital growth in April, with the increase rate of 7.6 and 19 percentage points higher than the national level.
2. Launch new products to promote selling. The output value of new products of Chongqing in April was amounted to RMB 9.642 billion, a y-o-y increase of 22.45%, which made up more than 50% of the total output value of automobile industry. The output value of automobiles reached RMB 6.1 billion, an increase of 15.46% year-on-year. The auto enterprises have launched automobiles of new types including Volvo S80, 09 Focus, Fiesta of new style, Chang’an CV8, SX4 1.8L, Chang’an Yuexiang since March, which have made their own history in new car releasing and greatly stimulated the market demand. Once as the 09 Focus is launched, its supply has fallen short of the demand.
3. Recovery of the market of commercial vehicles. As the national investment of RMB 4 trillion is gradually in place, the orders received by commercial vehicles manufacturers in Chongqing increased greatly. There were 49,900 commercial vehicles produced in April, a y-o-y increase of 19.6%.The production of commercial vehicles in Hongyan, Qingling, Chang'an Kuayue and Lifan now reaches the top capacity.
4. The increase of output value of complete motorcycle went better than the sales value. The export of motorcycles decreased dramatically, influenced by the overseas market and there is still no sign of recovery. The growth of domestic sales volume of motorcycles can not set off the decline in the export. The motorcycle enterprises immediately adjusted the marketing strategies to expand the production of extended products (such as general-purpose engines, engines for automobiles and other parts and components). The production of engines in motorcycle enterprises increased by 176% compared with the same period of the last year, which greatly eased the stress brought in by the downturn of the complete unit.
5. Auto parts and components enterprises ushered in robust growth. As the auto market recovered, the auto parts and components enterprises proactively endeavoured to speed up the progress of supporting work for localization and the auto parts and components industry achieved flourish both in production and selling. The output value of auto parts and components accomplished in April was amounted to RMB 4.1 billion, a y-o-y increase of 30.27%, in which, the output value of new products reached RMB 940 million, a y-o-y increase of 56%.
   

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