New Market Research Report: Hong Kong Autos Report Q4 2014

According to the Hong Kong Department of Transport (HKDT), vehicle sales for 7M14 came in at 26,449 units, an increase of 8.1% y-o-y. This figure consists of new private car registrations, new goods vehicle registrations and new private light bus registrations.

Previously, our view has been that subsidies provided by the government to encourage commercial vehicle (CV) owners to replace their pre-Euro IV vehicles are unlikely to have a significant impact on the CV segment, due to affordability issues. The Hong Kong government aims to replace roughly 80,000 pre-Euro IV CVs (including franchised buses) by 2019, which will entail average CV sales of over 14,000 units annually from now until 2019.

However, given the more heavy handed approach that the government is now taking via the 'Ex-Gratia Payment' scheme, we foresee that CV sales will increase as vehicle owners look to replace their pre-Euro IV. Since the scheme was implemented in March, CV sales have grown 31.6% y-o-y between March and July. With the new scheme expected to gain traction, we have raised our CV sales growth forecast from 14.9% to 18%.

Full Report Details at
- http://www.fastmr.com/prod/888069_hong_kong_autos_report_q4_2014.aspx?afid=301

On the other hand, passenger vehicles sales inched up 0.3% y-o-y in August, while on a year-to-date basis, passenger vehicles sales are up 4.6% for 7M14. As we expect sales to remain muted in the remaining months, we maintain our 2014 passenger vehicle sales growth forecast of 3.5%, with sales of 39,453 units.

As a result of our change in our CV sales growth forecast, our vehicle sales forecast is now 7.0% for 2014, up from 5.1% previously. Nonetheless, we remain less optimistic on the outlook of the sector for 2H14, as or Country Risk team has in August downgraded Hong Kong's GDP forecast from 3.3% to 2.5% on the back of a weakening property market and a slowing Chinese economy - which Taiwan is increasingly dependent upon ( see 'Dual Headwinds Elicit GDP Downgrade', August 22).

The Hong Kong Autos Report features the latest data and forecasts covering production, sales, imports and exports.

Business Monitor International (BMI)'s Hong Kong Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the automotives market in Hong Kong.

Key Benefits

* Benchmark BMI's independent automotives industry forecasts on Hong Kong to test other views - a key input for successful budgetary and planning in the Hong Kong automotives market.
* Target business opportunities and risks in the Hong Kong automotives sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Hong Kong.
* Assess the activities and market position of your competitors, partners and clients via our Competitive Landscape Analysis.

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