The car market as a crisis benchmark

GM in the US: no comparison
via WikipediaThe Chinese markets are often bringing interesting surprises. The car market is a kind of benchmark for crises. Not surprisingly US car producers like Ford and GM are in deep trouble, and yesterday the German car producer Opel sought government support as its relationship with GM is causing trouble in commission.
Delaying the purchase of new cars is often seen in a direct relation with a crisis: people just continue to drive in their old car, but the industry is heading for severe trouble.
So, when the car market in China slumped in September, that seemed a clear sign that also the Middle Kingdom was heading for a crisis. Until of course the figures for October were released, indicating an unexpected growth of sales.
When Volkswagen is warning today for trouble on the Chinese car market in 2009, here in Bloomberg, should we really expect trouble?

``The first half of next year, especially the first quarter will be difficult,''Winfried Vahland, Volkswagen's China head, said in an interview last night in Guangzhou. ``What we have to do now is to help customers regain confidence in investing in cars.
''Volkswagen's sales in China, its biggest overseas market, fell 4.2 percent in the third quarter as a cooling economy and traffic restrictions put in place for the Beijing Olympics deterred customers from buying cars. Slower China sales may hurt the German automaker, General Motors Corp. and Toyota Motor Corp., which are counting on emerging markets to offset slumping demand in the U.S., Japan and Europe."

Is there a reason for Volkswagen to at least prepare themselves against bad times in China? As so often, very general figures often disguise more than they explain. Over the past few months especially the high-end part of the market seems to have been unhurt by a slowing of the sales figures, that seems to have been triggered not by a crisis but by higher gasoline prices, and the anticipation of even more. Chinese consumers with enough money would not be discouraged by higher fuel prices, while the global crisis hardly seems to have an effect.
Following the government policies on fuel prices seems a better indicator to predict car sales in China than the effects of a crisis that still seems to be far away.

Commercial
Trying to make sense out of China and how the financial crisis might hurt the country? Try one of our speakers at the China Speakers Bureau for your upcoming event.

Related articles by Zemanta

• How to fix the Big Three
• Vauxhall/Opel Insignia wins 2009 Car of the Year
• Government aid should be extended to auto parts industry: analyst
• Beijing Auto Show: Is It Bigger Than Detroit? []
• Congress stalls over $25B auto bailout