China’s Auto Sales Rose in August, Impacted Crude Tankers
Auto sales in August
In August 2017, China’s auto sales rose 4.1% YoY (year-over-year). Its total vehicle sales rose 5.3% to 2.19 million in August. Its auto sales were comparatively stronger in June, while its sales are higher on a YoY basis. In April and May, auto sales fell 2.2% and 0.1% YoY, respectively. Automobile sales are a key indicator to watch when assessing China’s economic (FXI) health.
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In the first eight months of 2017, China’s auto sales rose 2.2% from the previous year to 14.8 million. However, the growth rate fell from its growth rate of 15% in fiscal 2016. Last year, auto sales rose due to a cut in the sales tax on small engine vehicles.
In 2017, China increased the sales tax on small engine vehicles, which slowed down the country’s auto sales. In January 2017, CAAM (China Association of Automobile Manufacturers) expected that the growth rate would be 5% in 2017. CAAM still stands by its earlier forecast and hasn’t revised these figures.
Importance of auto sales
The transportation industry drives oil demand. A higher number of vehicles means higher oil consumption. In China, almost 49% of the oil demand comes from the transportation industry. Higher oil demand in China means higher crude oil imports. As a result, it’s important to look auto sales while gauging the crude oil tanker industry. Companies in the crude oil tanker industry include Tsakos Energy Navigation (TNP), Frontline (FRO), DHT Holdings (DHT), Teekay Tankers (TNK), Gener8 Maritime (GNRT), Nordic American Tankers (NAT), and Navios Maritime Midstream Partners (NAP).
Be sure to visit Market Realist’s Crude Tankers page for more key developments in the industry.