Monday, March 26, 2012

Cocktail Chatter For This Evening -- China and Automobiles

China: at 2.5 million cars/month -> 30 million cars annualized rate
US annualized rate: 15 million
 
From the Motley Fool -- a very superficial article, but nice fodder for tonight's cocktail party:
China produced just 1.56 million automobiles in 1998, and by 2012, deliveries of passenger automobiles has reached 2.37 million per month. Experts are now revising 2015 forecasts of China's crude-oil consumption to 13.6 million barrels per day, a level that is triple where the country was in 1998.

China isn't the only growing source of demand, either. India's oil consumption grew 40% from 2001 to 2009, and other emerging markets around the world are more than making up for any reduction in demand from the United States. As I said, it's really not us -- it's everyone else.
From less than 2 million vehicles in 1998 -- the entire year, China is now delivering close to three times that number every month. I remember a talking head on CNBC last week referring to China as a country with "abject poverty." There may be a lot more poverty in China than we can imagine, but to trivialize China as another Bangladesh (of the past) is harming a lot of investors.

By the way, that US automobile annualized rate at the top was a WAG. But I just checked. See for yourself at Reuters.

2 comments:

  1. Bismarck anonymousMarch 26, 2012 at 2:35 PM

    Reported elsewhere in the last week: the fact that as of this week, the one remaining operating nuclear plan in Japan has shut down; i.e. all 54 of its nuclear power generators are now shut down.

    Combined with China (per the above article) this surely must mean highly increased competition for today's supply of crude oil.

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    Replies
    1. One note said this:

      http://www.ajc.com/news/nation-world/japan-shuts-down-its-1398244.html

      You are correct: huge competition for oil -- China, Japan, India. And on top of this, Canadian oil sands can't get to market and Iranian oil being taken off the market. Very interesting.

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