Only 30% of car dealers will meet sales targets in China
Staff Reporter 2012-09-11 16:48 (GMT+8)
While some have performed better than expected amidst government quotas, almost half of the country's total car dealerships are expecting to fall short of sales targets for the year. (File photo/Xinhua)
Only 30% of Chinese car retailers are confident that they will be able to hit sales target for the year.
Some retailers expect the price of cars will drop 8% in the second half of the year, according to global market research company JD Power Asia.
The research report covered 38 different car brand retailers in 49 cities.
Though luxury car brands still could deliver the growth of 30% sales, the non-luxury car brands have had better performance, according to the report. 64% of luxury car brands fulfilled their sales targets for the first half of the year, compared to 69% of non-luxury car brands. 54 of 100 luxury car brands reported losses while 47 of 100 non-luxury car brands did not make a profit during the same period.
Inventory will make for a tremendous pressure on car retailers in the second half of the year, especially on luxury car retailers. Around 90% of car retailers expected the sales will be negative for the rest of the year or just the same as the sales in the first half of the year.
Large retailers will be more equipped to weather the crisis caused by fierce competition, analysts said.
Chinese first-tier cities such as Beijing and Shanghai, where the government has enforced sales quotas, unexpectedly had better performance in sales. 50% of the car retailers in the first-tier cities sold 10% more cars than expected and 80% of them have believe they can reach sales targets for the year.
The second and third-tier cities where were expected to have more potential in car sales have suffered from more pressure. 40% of them have resigned to falling short of estimated sales figures for the year.
