Wednesday, September 10, 2008

Bloomberg: Chinese Auto Sales Fall for First Time in 3 Years

It will be interesting to see if this is the start of a trend or an Olympic induced anomaly. We won't know until a month from now but this is getting a lot of "attention" as a "signal" that China is slowing severely. Maybe it is. Maybe it isn't. But it really doesn't matter - if enough hot money believes it is, than it is. Even if it isn't. Perception is reality.
  • China's passenger-car sales fell in August for the first time in more than three years as the Beijing Olympics and a slumping stock market prompted drivers to delay purchases. Sales of passenger cars, sport-utility vehicles and multipurpose vehicles totaled 451,300, the China Association of Automobile Manufacturers said in an e-mailed statement today.
  • Demand for cars in the world's second-largest vehicle market cooled as inflation neared a 12-year high and a stock market slump reduced consumers' spending power.
  • ``The August decline is mainly because of one-off factor of the Olympics that deterred consumers' attention,'' said Yale Zhang, director at CSM Asia in Shanghai. ``Car sales growth may recover as soon as September as automakers start to add new models and offer incentives again.''
  • Total vehicle sales rose 14 percent to 6.48 million units in the first eight months while sales of passenger cars rose 13 percent to 4.55 million vehicles, according to the industry body.
Again, 1 data point tells us nothing in reality, but it won't stop people from clinging to it as significant. For example, when we have 30 bad data points in a row in the US, when we have 1 benign one, that one is clung to as THE signal everything is fine and the turnaround is here, and the other 30 data points are ignored. People will use data to fit their thesis, when it should be the other way around.

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