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Analyzing China’s December Auto Sales Data

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Auto sales in December

In December 2017, China’s auto sales rose 0.1% YoY (year-over-year) to 3.1 million. China’s automobile sales have been rebounding since June. China’s sales rose for the seventh consecutive month. However, the growth was slower last month. In November, China’s automobile sales were 0.7% higher YoY. Automobile sales are a key indicator to watch when assessing China’s economic (FXI) health.

In 2017, China’s vehicle sales totaled 28.88 million and were 3% higher than its vehicle sales in 2016. The sales are significantly lower than the 15.9% growth rate recorded in 2016. In 2016, China’s vehicle sales rose due to a cut in the sales tax on small engine vehicles. In 2017, the sales tax increased to 15% and auto sales struggled.

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2018

The China Association of Automobile Manufacturers predicts 3% auto sales growth in 2018—the same as the growth rate in 2017.

Importance to crude tankers 

In any country, the transportation industry drives oil demand. As the number of vehicles increases, the oil consumption also increases. It’s important to note that 49% of the total oil demand comes from the transportation industry. An increase in the oil demand translates to higher crude oil imports. It’s important to look at automobile sales when gauging the crude tanker industry. Companies in the crude oil tanker industry include Navios Maritime Midstream Partners (NAP), Frontline (FRO), Teekay Tankers (TNK), Gener8 Maritime Partners (GNRT), and Tsakos Energy Navigation (TNP).

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