China’s Auto Sales Rose 11.5% in April



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.

Article continues below advertisement

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.

Article continues below advertisement

2018 estimate

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.

Gener8 Maritime Partners (GNRT) has 22 VLCCs in its fleet, and DHT Holdings (DHT) has 27. Nordic American Tankers (NAT) doesn’t have any VLCCs in its fleet.


More From Market Realist