Inventory pressure drive domestic car

　　According to one SOHU blog, June, July and August are the traditional off-season for motor vehicles sales. Yesterday is the last day of the three days of the Dragon Boat Festival. However, many auto dealers expressed that the three-day holiday did not bring about increase in car sales. Due to last year’ fast-paced auto market, domestic auto manufacturers all have been expanding production capacity this year. the reporter of Economic Information Report one program of China Central Television, has learnt in Beijing auto market that presently the pressure of inventory has risen so significantly that promotions are the only way to alleviate the pressure

　　The reporter has visited Beijing Asian Games Village Automobile Exchange Market and North market in Beijing today where the promotions of Dragon Boat Festival holiday are still going on. The Full line of Hyundai ELANTRA offers a preference of 7,000 Yuan to 10,000 Yuan while new generation of Elantra 10,000 Yuan. Japanese cars also have caught up in this round of price reduction. In Guangzhou Automobile Toyota, a part of Camry-based models give a discount of 20,000 Yuan if cashes are paid. Some models of Tiida of Dongfeng Nissan offer a preference of 7,000 Yuan and 2.0-liter Teana 4,000 Yuan. VW who seldom do price cuts this time has made a concession. All models of Shanghai Volkswagen Passat offer a preference of 3,000 Yuan while POLO cut down their prices from 3000 to 5000 Yuan.

　　According to one Beijing Auto Dealers, “now it is a traditional off-season for motor vehicles sales that many models have introduced varied promotions. The discounts offered by models such as Mazda’s new RUIYI and Toyota Camry reach about 20,000 Yuan, a relatively considerable extent.”

　　However, consumers do not show respect to the price promotions of various brands. According to understanding, currently many consumers hold an attitude of wait-and- see. Influenced by the low property market and domestic inflation expectations, a lot of people shelve their plan to purchase cars temporarily.

　　Here is the confession of one customer, “I want to buy a family car priced at about 10,000 Yuan as a means of transportation. Since recently the prices are relatively stable, I still want wait and see if there would be more concessions.”

　　Data released by China Automotive Technology Research Center recently show that in May domestic car sales is 1.1947 million, a declination of 13.95% from last month while inventories continue to increase. Sales staff told the reporter that currently inventories of many 4S stores are more than one month. Even some of the larger 4S store has more one hundred of vehicles in stock.

　　One dealer confirmed fatherly, “models offer price cuts are basically with adequate stock, of all colors to be pick up. Each store has almost one hundred cars in stock.”

　　Not only domestic cars, the prices of imported cars are also falling down. The diffidence is though imported cars are offering discounts to attract consumers as well, taking inventory need to be charged more.

　　In an interview, many dealers in the above two markets have told the reporter that the most significant change in the recent auto market is following the example of domestic carmakers, imported carmakers has began to lower down prices and offer favorable credit to attract customers. Currently the preferences of BMW 5 Series and Mercedes-Benz E-Class have reached 50,000 Yuan. In addition to cash benefits, consumers can also enjoy purchase tax concessions. Audi also has introduced a few intensified promotions, which is seldom seemed previously. From now to the end of June, dealers will afford 50% of the acquisition tax if customers choose to buy Audi A6L, an equivalent of 18,000 Yuan in cash benefits. The overall discount rate reaches to nearly 30,000 Yuan if free vehicle insurance is added. However, though their prices are increasingly lowering down, it is not easy to take inventory immediately.

　　Here is the experience of one consumer, “I want to buy two cars, the Audi 2.0 and Q7, both of which will be charged more 50, 000 Yuan to take inventory.”

　　Sales staff, “as to imported cars, since the demand is so heavy the prices cuts are basically moderate. Both the declination and the prices have been relatively stable. Many models will be charged more if consumers want to get the cars immediately. For example, X6 will need 40,000 Yuan to 50,000 Yuan more while Q7 will cost 60,000 Yuan to 70, 000 Yuan more.

　　Even though, generally speaking, the prices of imported cars have fallen down a lot. The industry insiders believe that affected by the devalued euro, settlement purchase price of some euro-zone imported cars has decreased, which gives space for dealers to offer price promotions. What is more, the competition among luxury car manufacturers such as Audi, Mercedes and BMW has been getting tough in China auto market. According to statistics, in the first quarter of this year, sales of Audi in China reached to 51,449 units, while BMW 34,179 and Mercedes 24,100, respectively19.4%, 13% and 9.6% of their global sales. Compared to last year, First quarter sales of BMW and Mercedes-Benz in China nearly doubled while the growth rate of Audi was also high to 77%.

　　(Translator: Yalong/Jessie)

　　See original Chinese report Please click: http://ymstar520.blog.sohu.com/154679032.html