uploads///Auto Sales

How Did China’s Car Sales Turn Out in February?

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Nov. 20 2020, Updated 2:07 p.m. ET

China’s February auto sales

China’s car sales are a key indicator you should watch to assess the health of the economy. After outstanding car sales in January, China’s car sales took a dive in February. In February, the total sales recorded came in at 1.6 million, which was down 0.86% YoY (year-over-year) and down 36% from the previous month. In January, sales had risen 7.8% YoY. The two major car makers, General Motors and Ford (F), saw their sales decline in February.

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January and February combined

China’s (MCHI) car sales in the first two months of 2016 should be viewed together, as sales are traditionally distorted by the effect of the Lunar New Year holiday, which was celebrated in February this year.

In January and February combined, auto sales rose to 4.1 million from 3.7 million in the same period last year.

Auto sales contracted from June through August 2015, but demand rebounded in September as Beijing cut the sales tax on vehicles to accelerate auto sales. China’s auto market has been cooling down since its growth peaked at 45% in 2009.

The importance of China’s car sales data

As cars are the largest end users of oil, high growth in car sales often leads to higher oil consumption and greater oil imports, thus supporting tanker demand and rates. High growth in car sales also means the economy is doing well. When the economy is strong, more people are able to purchase cars.

On the other hand, low growth in car sales is often negative for oil consumption, imports, and shipments, which hurts tanker companies such as Frontline (FRO), Teekay Tankers (TNK), Tsakos Energy Navigation (TNP), Nordic American Tankers (NAT), DHT Holdings (DHT), Gener8 Maritime (GNRT), Navios Maritime Midstream Partners (NAP), and Euronav (EURN).

Visit our Crude Tanker page for more key developments in the industry.

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