MONDAY, AUGUST 6, 2012 DAILY motoring 19 SHORT TORQUE BMW to open Auto inventories critically high new plant BMW’s Chinese joint venture with Brilliance Auto announced last week Overstock it will build a new engine plant in Shenyang, Liaoning province, to raise its annual at dealers engine production capacity to 400,000 units over the next few years. may lead to Th e plant will be near the partnership’s latest vehicle fac- price war, tory. Construction will begin in 2013 and the fi rst phase of the project is expected to be lower profi t ready in 2015. VW looks into margins patent issue By GONG ZHENGZHENG Wall Street Journal gongzhengzheng@chinadaily. reported that Volkswagen Group is investigating a com.cn media report claiming that the German automaker’s Already bloated invento- Chinese joint venture part- ries at automobile dealerships ner FAW Group may have illegally used patents owned across China — the world’s top by Volkswagen. vehicle market — continue to Th e Volkswagen spokes- swell, signaling slowing sales man declined to elaborate and mounting pressures on on the allegations but said both dealers and automakers, the automaker “was exam- according to industry statistics. ining the situation carefully before coming to any con- The comprehensive inven- clusions,” according to the tory index stood at 1.98 in June, Wall Street Journal report. up from 1.88 in May, according to a recent survey conducted by BYD, Tianjin the China Automobile Dealers transit partner Association. Domestic automobile The June figure is also the and battery manufacturer second highest in the fi rst half BYD Co recently signed of this year, the highest being an agreement with Tianjin 2.32 in February. Th e inventory Public Transportation index is equal to the inventory Group (Holding) Ltd to set divided by sales in a period. up a joint venture and pro- A 4S shop in Haikou, where dealers are seeing low sales and excessive inventory. MENG ZHONGDE / FOR CHINA DAILY duce new energy vehicles According to international in the northern coastal city practice in the auto industry, near Beijing. a normal inventory index is strained financially to the this year from 9.2 percent a year to 20 percent from 9 percent. mid-sized model was launched target of 1.3 million cars. In the BYD will invest 2 bil- between 0.8 and 1.2. If the index utmost degree by excessive ago. The survey covered 1,605 in the market. first half, it moved 672,000 lion yuan to build a new production line in Tianjin exceeds 1.5, inventories have hit offloading of inventory from “Those carmakers whose dealers selling 38 car brands in Th e company has a 2012 sales units. with a designed capacity of an alert level. carmakers and also because of a dealers have high levels of 59 cities in China. 10,000 new energy vehicles. The survey covered 41 car deceleration in market demand. inventory should adjust their “Th e domestic vehicle market AUTO DEALERS’ INVENTORY INDICES IN THE At the outset the facility will brands as well as more than As a result of a slowing econ- production in the second half of is unlikely to rebound consid- mainly assembles electric 1,000 4S stores owned by top omy, wholesale vehicle sales in this year to relieve pressures on erably unless the government FIRST SIX MONTHS buses. 100 auto dealers in China. China fell short of expectations dealers. Otherwise, more deal- takes major incentive measures January 1.49 Toyota sales At 3.12 in June, the inven- by rising only 2.93 percent year- ers will possibly quit,’’ Zhao said. to boost demand,” Zhao said. February 2.32 decline in July tory index of dealers selling on-year to 9.60 million units in Some dealers have dropped Yale Zhang, managing direc- March 1.53 domestic car brands is the the fi rst half of this year, accord- collaborations with carmakers tor of consultancy Automotive April 1.72 Toyota Motor Corp highest, followed by import- ing to the China Association of in the fi rst half mainly due to Foresight (Shanghai) Co, said May 1.88 1.98 reported on Aug 1 that its ed foreign cars and brands Automobile Manufacturers. excessive inventories. In May, the excessive level of inventory June sales in China declined by 0 0.5 1 1.5 2 2.5 5 percent in July to 78,400 made by Sino-foreign joint More than half of companies four dealers of Sino-Japan joint is going to be the harbinger vehicles. ventures. in the passenger car sector failed venture Auto- of a new round of price wars. CAR BRANDS WITH TOP 10 DEALER INVENTORY But it added the year- Dealers of Haima, a to meet their fi rst-half sales tar- mobile Co quit and another “Price cuts will help boost INDICES IN JUNE on-year decrease is due domestic brand based in gets. , for example, moved eight suspended operation for sales but will further hurt to an unusual high num- South China’s Hainan prov- 265,500 cars in the fi rst half, only a month. margins of both carmakers Haima 6.71 ber last July, when sales 4.77 rebounded aft er a downturn ince, were the ones most seri- 38 percent of its full-year target According to a survey con- and dealers,” Zhang said. Cadillac 4.41 that occurred in the three ously hit by excessive inven- of 700,000 units. ducted by industry consultancy In July, Sino-US joint ven- Zhenzhou 3.53 months following the March tories. Th e average inventory Therefore, carmakers have JD Power & Associates early this ture Shanghai GM, together Guangqi Trumpchi 3.51 earthquake and tsunami. index of Haima dealers reached been pushing their inventories year, 63 percent of auto deal- with its 500 dealers, slashed Chery 3.45 MOTORING 6.71 in June. onto dealers in an attempt to ers in China were profi table last prices of the Chevrolet Infi niti 3.24 Zhao Chunhong, an analyst boost sales. year, down from 81 percent in Malibu by as much as FAW Besturn 3.1 Guangqi Honda 2.89 from the auto dealer associa- China’s GDP growth slid to 2010. Meanwhile, the propor- 25,000 yuan. The move only 2.75 tion, said dealers have been 7.6 percent in the first half of tion of dealers in the red surged came five months after the 024