Data: The PMI for automobile infrastructure sector stood at 50.32 in June, down 0.28 points MoM and 1.89 points YoY. The seasonally-adjusted composite index stood at 49.20, down 0.27 points on the month and 2.24 points on the year. The index for production stood at 50.99, up 0.28 point on a monthly basis and 1.24 to decline on a yearly basis. The index for new orders dipped 1.11 point month on month and 4.85 points year on year to 50.30. Automobile infrastructure companies kept 30.75 days of raw material inventories on average in June, up 0.03 day MoM. (The number of days of raw material inventories is for reference only as the survey sample may have changed.)
Summary: This month, the overall auto industry appeared stable-to-good. With high enthusiasm about production, the operating rate of enterprises increased month-on-month. However, some commercial vehicle companies temporarily suspended production due to funding problems. New orders for passenger cars continued to pick up this month, mainly due to sales promotion and local subsidies, which continuously increaseing downstream demand. Commercial vehicle market still appeared relatively flat. From the point of view of procurement, the purchase volume of enterprises this month increased amid rising orders. There were some replenishing demands from a few enterprises who believe that there will still be room for rising raw material prices.
Survey:
A medium-sized automobile OEM in East China: There were over 30,000 vehicles produced this month, higher than expected. The production was still in two shifts of 8 hours. With normal demand, orders increased on the month. Our expectations for the next two months are optimistic, and we have no problem to maintain the current sales volume.
A medium-sized automobile OEM in East China: With normal production, our orders hiked month-on-month. There were new models launched this month, bringing out good market feedbacks, increasing some orders. We have normal financial situation and stable staff. We aimed to purchase raw materials only for hand-to-mouth use.
A small automobile main engine factory in Northeast China: We suspended production this month on insufficient funds, and cut procurement and labour. We may resume production in August and September, if the funds are in place. We think that commercial vehicle sector failed to pick up, and companies of the same type were quite poor.
A medium-sized auto parts factory in Central China: We had low orders this month, and the export and domestic sales weakened. With upcoming off-season, we have passive outlook for the market condition. We stocked up a little bit amid a small rise in raw material prices this month.
