China's HDT sales down 19% y/y in June

Decline also expected in July and August.

China's HDT June sales came in at 65K units, down 19% y/y and decelerating from the 4% y/y decline in May. For 1H14, HDT sales increased 6% y/y vs. 11% y/y growth for 5M14.

According to a research note from Barclays, it believes the weakening y/y trend in HDT sales is a reflection of the continued softness in fixed asset investment, and also the high base in June 2013 as pre-buy was high ahead of the speculated implementation of NS IV (national emission standard IV) on 1 July 2013 although the implementation failed to materialize.

The report also noted that, as such, we expect a continued y/y decline in HDT sales in July and August but expect moderation in the rate of decline as the July and August 2013 bases become easier.

Barclays further said that it expects the decline trend to worsen from September onwards as the base for 2013 was high again (due to another wave to pre-buy ahead of the speculated implementation of NS IV, which also failed to materialize).