Auto sales in April
In April, China’s vehicle sales rose 11.5% YoY (year-over-year) to 2.3 million. In March, its vehicle sales rose 4.7%, and in February, sales fell 11.1%. Automobile sales are a key indicator for assessing China’s economic (FXI) health.
Industry is cautious
April’s growth rate marked the first double-digit growth in the last year and a half, excluding the months affected by the Lunar New Year holiday. But the industry association remained cautious in spite of the growth, citing low sales in the past year as the factor behind double-digit growth.
The 1st four months
China’s automobile sales in the first four months of 2018 totaled 9.5 million vehicles, a 4.8% rise from the same period last year.
CAAM (China Association of Automobile Manufacturers) predicts a growth rate of 3% for 2018. That’s in line with the growth rate in 2017 but significantly lower than the growth rate of 13.7% in 2016.
Important for crude oil tankers
In any country, the transportation industry drives the demand for oil. As the number of vehicles increases, oil consumption increases. It’s worth noting that 49% of the total oil demand comes from the transportation industry. An increase in oil demand translates to higher crude oil imports.
Investors can look at automobile sales to gauge the crude oil tanker industry. Higher crude oil imports for China benefit VLCCs (very large crude carriers). Navios Maritime Midstream Partners (NAP) operates six VLCCs, and Tsakos Energy Navigation (TNP) operates three.