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Hong Kong Autos Report Q1 2012
Business Monitor International, Jan 2012, Pages: 36
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.
Key features:
- Rely on Independent 5-year Forecasts as a Benchmark to test other views - a key input for successful budgetary and strategic business planning.
- Target Business Opportunities & Risks through reviews - and major deals, projects and investments.
- Exploit Latest Competitive Intelligence & Company SWOTS on your peers and competitors through company rankings by sales, market share, investments and leading products and services.
BMI estimates that 2011 will have been a year of moderate growth for the Hong Kong auto industry, with sales growth coming in at around 4.7% year-on-year (y-o-y), bringing total CBUs sold to 39,544. This will be made up of 33,359 passenger cars, the market for which has grown at 4.81% y-o-y. The overall autos industry grew at average rates, with no significant deviations from the average, apart from the quantitatively very small heavy commercial vehicles segment, which witnessed 36.7% y-o-y growth, bringing total sales to 8 vehicles in the year. The motorcycle segment also enjoyed slightly above average growth, coming in at 5.19% y-o-y. The underlying message over 2011 has therefore been one of comparative stability, in part reflecting a slight structural change over the course of 2010, when some confidence returned to the consumer economy.
BMI’s core view of 2011’s real GDP growth is at the lower end of the HK government’s expectations, which place it at between 5% and 6%. This has been viewed as due to a playing out of the domestic property market, which has been considered a bubble for some time. This growth expectation also reflects the interlinked nature of the HK government and economy with that of mainland China, as a slight slowdown across the border can have serious effects on the import/export trade in HK, potentially creating significant downside risks.
Growth of Hong Kong’s real GDP over the course of 2012 is estimated at 3.0%. This is below the Bloomberg consensus of 4.9%. BMI takes this view due to the belief that the export market centred on Hong Kong will slow over at least the first half of 2012. This is due to the prediction of slow economic development in China and the US, which are Hong Kong's two most important markets.
However, as reported by Asia Pacific Performance, the y-o-y increase in trade in 2011 remains at 5.1%, and overall private consumption increased by 9.2%, in part due to a decrease in the unemployment rate, as well as the net surplus the HK government is running. This should support any further destabilising local effects. It certainly will not, however, be enough to counteract a further serious economic slowdown, nor a major impact on the Hong Kong stock exchange caused by economic difficulties in mainland China. Despite these downside fears, we have not reviewed our long-term evaluation of the Hong Kong auto market since the beginning of the European debt crisis. Growth is still forecast to remain at a similar rate throughout the remainder of the forecast period to reach 48,581 units in 2016.
The proximity to China does bring benefits as well as problems. In particular, being close to China enables export and re-export trade. Japanese automaker Nissan Motor's premium brand Infiniti will establish its new headquarters in Hong Kong, according to Nissan's executive vice president Andy Palmer. He added that the new headquarters, scheduled to become operational in April 2012, will improve Infiniti's ability to serve markets in North America, Europe, China and South East Asia. The brand is aiming to achieve global vehicle sales of 500,000 units per annum as part of Nissan's six-year mid-term business plan, called 'Nissan Power 88'.
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