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ASIA: "New U.S. Unfair Competition Laws - Impact on the Indian manufacturing Sector & Opportunities"

ASIA: "New U.S. Unfair Competition Laws - Impact on the Indian manufacturing Sector & Opportunities" report. 4-page report by KPMG India.

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back to index backASIAtalk June,  2017


Autos/Trucks: China Auto Demand Stable in April (May 2017 report)

China auto registrations declined 2% yoy in April, consistent with retail sales data released earlier this month. China auto market remains stable despite some concerns that demand would fall-off after change in vehicle tax to begin 2017. We believe the same long-term demand drivers (GDP per capita, auto penetration) support higher auto demand in 2017 (est. + 3% yoy). Auto production rose 2% yoy in April, consistent with our Q2 estimate. Commercial vehicle production increased 28-29% yoy in April, versus our Q2 estimate up 24%.

- China auto registrations declined 2% yoy in April, consistent with retail sales data (from China Passenger Car Association) released earlier this month. Despite some concerns over the level of demand to begin the year, China auto demand remains solid YTD (+5%). For the full-year, we expect growth to slightly moderate (RWB 2017e: +3%) due to difficult comps on second-half 2016 prebuy. Through the end of the decade, we look for rising GDP per capita and higher auto penetration (in second and third tier cities) to drive mid-single-digit growth. With auto suppliers benefiting from market outgrowth on higher content, China continues to be a growth driver moving forward.

- Domestic automakers continue to take share, expanding 1% yoy in the month led by Geely (+91% yoy). At the segment level, growth continues to be driven by SUVs (+12% yoy), which now account for nearly 40% of total light vehicle sales versus 20-25% in 2014.

- April by the numbers:
----- OEMs gaining share: Geely (+91%), Mazda (+47%), SAIC (+31%).
----- OEMs losing share: Hyundai (-65%), PSA (-56%), (Chang’an (-44%).
----- Segments gaining share: Luxury car (+19%), SUV (+12%), Mini car (+7%).
----- Segments losing share: Minivan (-21%), Mini Truck (-17%), Compact car (-13%).

- Auto production increased 2% yoy, in line with our Q2 estimate for 2% growth. China dealer inventory index declined sequentially for the second consecutive month and now stands at 59.2%, consistent with the April level in 2015 and 2016 (60.5% and 57.9%, respectively).

- China commercial vehicle demand/production increased 28-29% yoy in April, slightly ahead of our Q2 estimate for 24% growth. Growth has been driven by enforcement of weight overloading restrictions in the country (demand driver through 1H), which supported heavy truck demand +52% yoy in April. We expect the full year to be up 5-10% as demand pulls back in the back-half of the year (post prebuy). Our estimate compares to Volvo forecasting +4% growth and WABCO expecting the market to be down 5% to up 5%.

- Heavy truck performance:
----- OEMs gaining share: Dongfeng (+58%), CNHTC (+55%), Shaanxi (+53%).
--- - OEMs losing share: Beiqi Foton (+35%), CAMC (+39%), Chengdu (+41%).

To download 9-page report, please click here.

Source: BAIRD - GAI





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