Major Chinese OEMs: Production and Sales Recovery in May-June 2020

VW increases JV investment, Toyota in 5-way fuel cell JV, BAIC and BYD focus on semiconductors

2020/07/13

Summary

  In the period January through May, 2020, motor vehicle production in China fell by 24.1% compared to the same period in the previous year, to 7.787 million units, according to an announcement by the China Association of Automobile Manufacturers (CAAM). Vehicle sales declined by 22.6% year-over-year (y/y) for the period to 7.957 million units. In the month of May, production increased 4% over the previous month to 2.187 million units and sales rose by 5.9% compared to the previous month to 2.194 million units. In addition, CAAM announced on June 23 that for the top eleven automobile OEMs, production and sales through mid-June has been increasing and the market which was affected by the COVID-19 (new coronavirus) pandemic is trending toward recovery.

  On July 2, the CAAM issued a forecast of June sales based on sales volume reports of the major OEMs. According to the CAAM forecast, vehicle sales in June 2020 will reach 2.28 million units, an increase of 11% compared to June 2019; compared to May 2020 sales, June 2020 sales will rise 4%. However, for the first 6 months of the year sales will be 10.24 million units, a year-on-year decline of 17%.

  The January through May 2020 production volume of the Dongfeng Motor Group, which with headquarters in Wuhan was the most severely impacted by the COVID-19 pandemic among the major group companies, decreased 27.5% y/y and that shows significant improvement from the 50.9% y/y decrease in the first quarter (January through March). Changan Automobile Group which in recent years had seen a downward trend in vehicle sales was able to suppress the rate of decrease compared to other group companies by the increased sales of its own-brand vehicles.

  In the trends of the major Chinese OEMs from May through the middle of June, aggressive investments in battery and semiconductor businesses can be seen. BYD increased investments in its blade battery and semiconductor subsidiaries. Volkswagen became the largest shareholder of Chinese vehicle battery manufacturer Gotion High-tech Co., Ltd. At the same time, the company announced an increase in its investment ratio in its joint venture JAC-VW.


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