The Annual Car Market Is Down About 8%: Will It Continue To Explore Next Year?

Recently, the China automobile industry association data forecast at the 2020 China automotive market forecast summit, in 2020, China's auto production and sales volume will continue to decline. It is estimated that 25 million 310 thousand cars will be sold throughout the year, down 2% compared with the same period last year. Based on the above judgment, the main factors include macroeconomic stability, bottom employment and consumption.

In 2018, China's automobile output increased for the first time in 28 years, and the sales and sales of automobiles were 27 million 809 thousand and 28 million 81 thousand respectively, down by 4.2% and 2.8% respectively. In 2019, the car market continued to decline and entered the depth adjustment. In the first half of November this year, China's automobile production and sales volume was 23 million 38 thousand and 23 million 110 thousand respectively, down 9% and 9.1% compared with the same period last year. Judging from the current trend, the annual production and sales volume will be less than 26 million vehicles.

"This year's growth rate will be around -8%. Next year, the car market will have a more obvious rebound. The annual decline will be narrowed to less than -3%. If all conditions match, it is possible to achieve positive growth. " In December 19th, Wang Qing, deputy director of the Institute of market economy of the State Council Development Research Center, said in an interview with an economic reporter in twenty-first Century.

Xu Haidong, Assistant Secretary General of China Automotive Industry Association, said that in the next 3 years, China's automobile consumption curve will still maintain the "L" development trend, and it is difficult to appear "V" shape reversal. In the short term, there will still be slight negative growth or zero growth in the car market, and the market will continue to explore the bottom. By 2022, the car market will reach 25 million levels, followed by positive growth inflection point.

Continuous structural adjustment

Wang Qing predicted that in the medium to long term, China's auto consumption is shifting from the medium to high speed growth stage to the middle and low speed stage. By 2028, China's automobile output will probably reach 33 million vehicles. By then, the total number of cars in our country will be close to 410 million, and the number of thousands of cars will be around 288.

In the short term, there will be varying degrees of adjustment by macroeconomic factors and policy changes. This year, the decline of China's auto market is the result of the resonance of many factors, such as housing prices, residents' leverage ratio, the six handover of five countries, and the decline of new energy vehicle subsidies.

In fact, since 2018, the demand for automobiles has declined sharply, showing a coexistence of structural and aggregate characteristics. Because of the different sensitivity of consumer groups to macroeconomic, the segmentation of automobile segments shows different trends.

Specifically, this year, the decline in automobile consumption is mainly in the three or four line cities below the market and the new vehicle market under 100 thousand yuan, while the high-end car market keeps growing, showing an obvious "consumption fault".

Wang Qing believes that this is because the excessive increase in the leverage rate of residents has inhibited the consumption of cars. The leverage ratio of the three or four line urban residents is not high, but the rate of increase is very fast. On the contrary, the demand for car market in the second tier cities is far lower than that in the sinking market. According to the statistics of the risk statistics of luxury brands in the first 10 months of this year, the number of terminal deliveries of luxury cars (including imports) in 1-10 months is 2 million 512 thousand, an increase of 8.4% over the same period last year. The market share of luxury cars has exceeded 10%.

In the next period of time, the overall demand for car market will not increase significantly. But in the interior, the demand for low-end models will be converted to the demand for high-end models, mainly due to the impact of displacement and consumption upgrading.

During the Guangzhou auto show this year, when the economic news reporters interviewed Mercedes Benz, Audi and other top brands in twenty-first Century, luxury brands generally expressed optimism for the future trend of China's luxury car market. "Over the years, the growth of the luxury car market has been higher than the average growth level of the passenger car market. However, the proportion of the luxury car market is only 11% or 12%, while the developed countries can reach 25% and 30%. With the growth of people's living standards, as luxury cars have more entry-level products to enter the market, luxury car manufacturers will have more market space in the future, and the potential is still huge, accounting for an opportunity to increase. Beijing Mercedes Benz Sales Service Co., Ltd. sales and marketing chief operations officer Jianjun said.

The first batch of 90 will enter the age of 30 in 2020. In the real sense, it will become the main force of automobile consumption, and the high and medium priced vehicle with higher price will be the choice of more Chinese consumers.

"Before we bought a car with 200 thousand yuan on our hands, we often only considered cars within 200 thousand. But now more and more young car buyers are more able to accept installment payment and early consumption. Only 200 thousand of them are on hand. What is more interested is not 200 thousand of the models, but 250 thousand, 300 thousand or even higher prices of cars, and more appropriate financial solutions. A car 4S shop salesman told reporters.

This will also have a greater impact on car sales with a price of less than 100 thousand yuan. Most of the independent brands are in the same range, so the test of their own brands will continue to intensify in the coming period. Xu Haidong believes that in the next 3 years, the consumption capacity of cities below three lines will decrease, especially the low end SUV.

"Despite the years of efforts made by Chinese brands, some enterprises and brands are on the rise, but overall competitiveness is still weak compared with the brands of foreign multinationals. It is very important for the development of the automotive industry to consolidate China's auto market itself. There is no other shortcut to improve itself based on its own brand. On December 11th, Ye Shengji, Deputy Secretary General of the China Automobile Industry Association, said at the 2019 automobile think tank conference.

Lack of demand for new energy vehicles

It is worth noting that sales of new energy vehicles have dropped sharply in the second half of this year, and negative growth may occur throughout the year. Although the industry's impact on the decline of new energy subsidies has already been expected, the actual situation is much higher than expected.

Wang Qing believes that the decline in sales of new energy vehicles, in addition to the impact of subsiding factors, another reason is the lack of market driving force.

"Now that there is still a distance between the public procurement and the purchase of new energy vehicles, the price, the convenience of charging and the mileage of life are actually in line with the demands of consumers." Wang Qing said.

From this stage, the purchase of new energy private cars is mainly two groups. Part of the group is relatively high income level, relatively high education level, a strong sense of environmental protection groups; the other part of the family may be second cars, mainly for the transport of children, commuting and commuting.

"From the current policy point of view, it is not enough to consider the demand for electric vehicles for these two groups of people. At this stage, we can stimulate this consumption as a major direction." Wang Qing finally said.

Although China's new energy vehicle market has huge market potential in the long run, it will be the year of subsidies and exits next year when the market demand is hard to grow rapidly. How to stimulate the vitality of new energy vehicles is a problem that needs to be solved in the development of new energy vehicles in the next one or two years.

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