Car Market Enveloped By Epidemic Situation: Demand Postponed "Organic In Danger"

In February 3rd, the State Council extended the first day after the Spring Festival holiday. However, most of the auto manufacturers and auto 4S shops have not resumed or opened up due to the infection of pneumonia caused by the new coronavirus.

China's auto market has been declining for two consecutive years due to multiple factors such as macroeconomic and emission standards switching. The sudden outbreak will undoubtedly increase the pressure of China's automobile market.

"1, February, affected by the epidemic, the car market downturn may be more than 25%, or even about 30%." On February 1st, Cui Dongshu, Secretary General of the National Federation of Hong Kong Federation of trade unions, said in an interview with the twenty-first Century economic report reporter.

However, Cui Dong Shu also said that if we do not consider the risks brought about by special factors, the market in 2020 will still have the possibility of achieving positive growth in 3-12 months. In two stages, after the improvement of the epidemic situation, the car market will be turned negative.

Earlier this year, different agencies in the industry made different predictions for the car market in 2020. Generally speaking, most of the previous forecasts were that the Chinese car market in 2020 would gradually build up and stabilize. China Automotive Association expects that in 2020, China's auto market will sell 25 million 310 thousand vehicles year-on-year, down 2% compared with the same period last year, and the National Federation of Passenger Transport Association predicts that the passenger car market in China will grow 1% in 2020.

The above prediction does not include the sudden impact of the epidemic on the car market. At present, even if government departments and medical institutions fight against the epidemic actively, it is difficult to fully assess the impact of the epidemic on the economy and the car market.

"The epidemic will have an impact on the whole automobile market, but this effect is temporary. With the end of the epidemic, the market will gradually resume its original operation. Luo Lei, Deputy Secretary General of China Automobile Circulation Association, said.

Market pressure in the first quarter

From the perspective of China's automobile consumption habits, Spring Festival holidays tend to be the off-season for car purchases, and February is the low point of automobile production and sales throughout the year. In January 2019 and February, China's automobile sales volume was 2 million 367 thousand and 1 million 482 thousand respectively, compared with the same period in 2018, 15% in the first two months.

With the monthly narrowing of car market in the second half of 2019, coupled with a lower base in the first two months of last year, the industry has been optimistic about expectations for the first two months of this year. Although this spring festival in January, most manufacturers do not expect much of January, but they think that there will be a certain increase in February compared with last year. However, affected by the epidemic, the production and sales data in February this year will be relatively low.

Some people will compare the car market data during the SARS period in 2003, and think that the epidemic will not affect the car market too much. In 2003, SARS broke out in February, ending in July and lasting for half a year. However, China Automotive association data show that in 2003, China's automobile market maintained a high growth rate, and the total annual vehicle sales volume was 4 million 390 thousand and 800, an increase of 34.21% over the same period last year.

In Cui Dongshu's view, the current situation of the automobile industry can not be compared with the SARS period, and the impact will be greater than then.

"SARS" period, due to the relatively good economic environment, China has just joined the WTO, the supply of vehicles in short supply, so the overall situation of the car market is still a substantial increase. Now, the economy itself is at a completely different stage. " Cui Dongshu told reporters.

Cui Dongshu believes that as the epidemic is relatively stable, production and operation will resume relatively normal. In addition, affected by the consumption psychology during the epidemic period, the demand of vehicles will replace the needs of the houses, and become the reasonable demand of residents.

The popularity of automobile in 2003, due to strong demand for cars, consumption in the second half of the release, so that the annual sales volume maintained a rapid growth. However, at present, China's automobile market has entered the stock market, and the concept of automobile consumption is completely different from before.

"The situation at that time was that we were prepared to buy a car, but it was just a matter of buying early. But now the situation is that the car has been bought, and the market growth rate is falling. " In February 3rd, Wang Qing, deputy director of the Institute of market economy of the State Council Development Research Center, told reporters on twenty-first Century economic report.

In Wang Qing's view, the impact of the epidemic on the car market depends largely on two aspects. One is how long the epidemic will last. The two is the impact of the epidemic on the economy and then indirectly affects the car market.

"If the epidemic ends before April, the impact on the whole year's car market will not be very great. It will not have a great impact on the preferences and expectations of car consumption, whether it is originally intended to buy a car, or originally did not want to buy a car." Wang Qing said.

Many industry analysts told reporters that the epidemic will delay the demand for the car market, but will not cause these potential demand to disappear.

From the perspective of different car buyers, it can be divided into three groups: purchase, replacement and new purchase. Among them, the increase is mainly in the second tier cities, and the new purchase mainly focuses on the sinking market in the Midwest and three or four lines. In the auto stock market, the increase and purchase is the main growth point of the market. As a result of the impact of the epidemic on the macro economy, both the new purchase, the increase in purchase and the employment and income of the repurchase population will be affected, thus affecting the purchasing power.

There is a view that under the influence of the epidemic, it may stimulate the needs of some newly purchased people. "Sharing" may be a false proposition, which can be shared at ordinary times, but when it is really needed, the vehicle is too nervous to share. The car is a private space, and we will be much more interested in this private space than we used to be. We would think that having a car is a more important thing. Cui Dongshu said.

Affected by the epidemic, public transport in some cities is inconvenient, the intercity and county shuttle buses are closed down, dripping and other services are limited, and some residents will feel inconvenient, which will breed their willingness to buy cars, especially in the Midwest, the three or four tier cities, and towns and young people.

"The independent brand is mainly the first purchase demand. In the past, it suffered a relatively large impact, but in the three or four tier cities, it is still very inconvenient to travel without cars. The independent brand models will be certain to restore the rigid demand of the first group of buyers in the future, so I have a relatively optimistic attitude towards the independent brands. However, I am concerned about the instability of the demand for repurchases caused by economic shocks, which may affect the high-end and luxury car market. " Cui Dongshu said.

However, Wang Qing believes that the epidemic is transient. In the past, such factors will end, and the demand for cars and the willingness to buy cars will return to the previous state. In the process of epidemics, no matter whether they want to buy or not, they can not buy it, so everyone has to stay at home. This demand is mainly affected by the duration and inconvenience of the epidemic.

Dealers win Online

At present, most 4S stores also suspend auto sales, especially in areas such as Hubei. Wuhan based auto dealer group Hengxin automobile group is one of the most influential dealer groups affected by the epidemic. In twenty-first Century, the economic report found in Hengxin's official website that there were more than 300 automobile 4S points in Hengxin, including more than 110 in Hubei and 29 in Wuhan.

Prior to this, Hengxin responsible persons have disclosed that the group is considering the specific business hours of each 4S store. The 4S store outside Hubei is temporarily scheduled to open in February 3rd, while the 4S shop in Hubei province is expected to be operating later. It is possible to postpone the operation until the February 8th Lantern Festival.

In addition, many large auto dealer groups such as Yongda and Guanghui have announced plans to postpone the opening. "At present, it is mainly to deal with the epidemic situation, and the life safety of employees is a top priority. At present, most stores plan to start work on the 10 day, and Wuhan, Wenzhou and other places demand 17 days later. In February 2nd, a senior dealer group told reporters on twenty-first Century economic report.

Some 4S stores give the coping methods during the suspension period, and require salesmen to do well in online marketing.

4S shop salesperson told reporters that under the current circumstances, even if opened, there will not be many customers to the store. Therefore, most of the relevant employees will focus on online marketing, with the help of vertical website or electronic business platform, to complete potential customers' acquisition. Wait for the end of the epidemic, and further promote sales and other services.

"At present, the shop side has received more consultation through online shopping malls and telephones, and through convenient ways to carry out door-to-door delivery services." In February 2nd, a senior member of Yongda group told reporters.

This reporter has learned that a TOYOTA 4S store has also made the sales and after-sale links a way of combining online and offline. In the purchase of cars, TOYOTA's online consultation, intelligent exhibition hall car watching and online booking are not necessary for customers to shop. After deciding to purchase, the customer tries to drive in the store, completes the payment and the card, avoids contacting more personnel. Some 4S stores provide after-sales service such as online renewal, free door-to-door car repair and so on.

It is worth noting that the auto industry has a long industrial chain, and the impact of the epidemic on the auto industry will continue for some time.

Last year, as the car market down, most of the auto manufacturers have been through inventory to relieve pressure. Due to the renewal of vehicle and parts enterprises' reemployment time, although some models still have stock, they may cause shortages of some popular models and shortages of spare parts. In the short term, the operating pressure of dealers should not be underestimated. At the same time, the survival difficulties of distributors will soon spread to the upstream of the main engine factory. Dealers will reduce the number of cars and intensify the contradiction between manufacturers.

There are already host factories aware of this problem. Volvo is the first car dealer to reduce its burden on dealers.

In February 2nd, Volvo announced that it had decided to relax its performance appraisal for dealers and did not set sales targets for February. At the same time, taking into account that the dealer's income may be affected by the epidemic situation, in order to reduce the financial pressure of dealers, Volvo motor directly provided staff members with more than ten million yuan subsidies to distributors.