Hong Kong Autos Report Q1 2012
Includes 3 FREE quarterly updates
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.
Our view for the growth of Hong Kong’s real GDP over the course of 2012, however, is at 3.0%. This is below the Bloomberg consensus of 4.9%. We take this view due to our belief that the export market centred on Hong Kong will slow over at least the first half of 2012. This is due to our 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. We still see growth remaining 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'.
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.
Our view for the growth of Hong Kong’s real GDP over the course of 2012, however, is at 3.0%. This is below the Bloomberg consensus of 4.9%. We take this view due to our belief that the export market centred on Hong Kong will slow over at least the first half of 2012. This is due to our 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. We still see growth remaining 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'.
Contents
Executive SummarySWOT Analysis
Hong Kong Auto Industry SWOT
Hong Kong Political SWOT
Hong Kong Economic SWOT
Hong Kong Business Environment SWOT
Global Overview
Thai Floods Threaten Regional Car Sales
Macroeconomic Forecast Scenario
Industry Forecast Scenario
Sales
Table: Hong Kong – Autos Sector
Trade
Table: Hong Kong Auto Sector – Economic Contribution
Market Overview
Passenger Cars – Forecast & Analysis
Industry News
Company Monitor
Company Profiles
Crown Motors
Mercedes-Benz Hong Kong
Sime Darby China
BMI Methodology
How We Generate Our Industry Forecasts
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