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Hong Kong Autos Report Q4 2011
Business Monitor International, Oct 2011, Pages: 39
In Q211, the Hong Kong economy suffered a 0.5% quarter-on-quarter contraction, giving economic analysts reason to focus on an 11.1% fall in exports. However, BMI believes the Hong Kong economy remains fundamentally sound, a position it shares with the Hong Kong government, which ascribed the fall in exports as a blip resulting from disruptions in the supply chain due to the Japanese earthquake in March. The government reported that domestic demand has remained strong and incoming investment in the economy has remained stable, and as a result the government has maintained its positive forecast that the economy will grow by between 5% and 6% year-on-year (y-o-y) in 2011.
Despite the continued strength of the Hong Kong economy, BMI is not forecasting a repeat of the exceptional growth in new vehicle sales recorded in 2010 when there was a y-o-y increase of 37%. These exceptional figures were driven by a significant rise in the number of sales of private passenger vehicles and an increase in sales of commercial vehicles of over 75%. In 2011 BMI expects a return to a normal pattern of moderate growth. We forecast total motor vehicle sales to reach 39,544 this year which represents a 4.79% y-o-y increase in growth. We expect that sales will continue to increase at a similar level annually for the duration of the forecast period with annual sales of 46,806 units in 2015. In 2011 we expect total sales of US$1.48bn up from US$1.34bn last year. By 2015 we forecast the market will be worth US$1.89bn annually.
The Hong Kong government is increasingly concerned about pollution caused by road transport, which has become one of the territory’s hottest political issues. The Environment Protection Department claims that 82% of carbon monoxide emissions are caused by motor vehicles. As a result of high pollution levels in February, the government proposed an increase in First Registration Tax on private cars of 15%, the first increase on car tax in eight years.
The government is also keen to increase the use of electric vehicles (EVs) in the territory and has set the highly ambitious target of 30% of privately owned cars to be hybrid or electric powered vehicles by 2020. In March the government began trials on the use of electric vehicles for public transport and commercial use. It has also introduced a waiver of the First Registration Tax on EVs and is encouraging the expansion of EV recharging points, which will be vital in order to encourage any significant uptake of the new technology.
BMI believes that Hong Kong's tradition of high-tech innovation will create the positive environment required for the development and uptake of EVs, even though the Transport Department showed that, as of September 2010, only 145 out of 650,000 vehicles registered were electrically powered. The 30% target will be hard to achieve.
Business Monitor International's Hong Kong Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Hong Kong's automotive industry.
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