Car sales in China dropped 12% year over year in January, totaling 1.81 million units, the China Passenger Cas Association (CPCA) reported on Tuesday. Despite the overall drop, sales of electric vehicles and plug-in hybrids grew 10.5%, now accounting for 41.2% of total sales. “The run-up to the Lunar New Year is traditionally a peak season for car purchases in rural areas, with demand coming mostly from first-time buyers and gasoline vehicles making up a larger proportion,” said Cui Dongshu, secretary-general of CPCA.
Nick Note: One of the key things I look at for economic strength is car sales. When people are feeling fat and sassy they buy car sales go up . When economies starts slowing down car sales followed by real estate sales plunge. as you are seeing in China. Add another piece of the puzzle debt. When people start getting in debt stress the amount of revolving credit picks up. Credit card delinquencies skyrocket and the malaise spreads throughout the economy. Key to our oil trade besides the tariffs which are making headlines is what is oil consumption look like. As we’ve talked about in our oil trade is the key oil consumption markers China. Its the largest importer of crude oil . And the Chinese economy is in a major slow down. They’re crude oil imports are slowing. And its going to slow a lot more as they enter into a major recession. That means that the world is rapidly going into an major oil oversupply situation. Right now there’s a lot of confusion on Tariffs and their impact on oil prices. I am adamant the driver of oil pries will be consumption. Traffics are a secondary issue and will be watered down in negotiations.