9.16% Decline In China'S Auto Industry In The First Half Of The Year

On July 10, the China Automobile Industry Association (hereinafter referred to as "CAAC") released monthly auto production and sales data, which showed that in June this year, China's automobile production and sales reached 2.235 million and 2.194 million respectively, up 22.5% and 11.6% year-on-year, reaching the best level in the history of single month sales in June.

"The sales volume in June hit a record high, on the one hand, there was an obvious recovery growth in May and June; on the other hand, domestic investment in infrastructure construction led to a substantial growth of trucks." On July 10, Chen Shihua, Deputy Secretary General of the China Automobile Association, said.

Thanks to the effective control of the domestic epidemic situation, as well as the promotion of consumption policies by local governments, such as purchase subsidies, car going to the countryside, and relaxation of indicators in cities with purchase restrictions, the cumulative decline in automobile production and sales in the second quarter continued to narrow. In the first half of this year, the production and sales of automobiles were 10.012 million and 10.257 million respectively, down 16.8% and 16.9% year-on-year.

However, the auto market will still face greater pressure in the second half of the year, and the trend of positive monthly sales growth may not continue. "The recovery of the car market in the second quarter is due to the gradual release of the restrained consumption power from January to March. The trend in the third quarter will probably be the same as the same period last year. However, the base of the fourth quarter of last year is relatively high, and the same period of this year may see a small negative growth. " Xu Haidong, deputy chief engineer of the China Automobile Association, said in an interview with the reporter of the 21st century economic report.

Under the comprehensive calculation, the CAAC is optimistic that China's automobile market will decline by 10% this year, and the pessimistic forecast that the decline rate may reach 20%.

Structural adjustment of car market

The overall scale of the car market has declined.

Specifically, the market for SUVs with higher prices is more obvious, while the car market is still declining. In June, sales of SUVs reached 822000, up 10.5% year-on-year. 820000 cars were sold, down 4.9% year on year. The market share of SUV has surpassed that of sedan. In the first half of this year, the cumulative sales of SUVs and sedans were 3.677 million and 3.676 million respectively, down 14.9% and 26% respectively.

China's car market is undergoing structural adjustment, showing the coexistence of consumption upgrading and low-end purchasing power shortage. On the one hand, the market share of high-end cars represented by Mercedes Benz, BMW, Audi and Lexus has been increasing; on the other hand, the sales of models with prices below 80000 has declined significantly, which also leads to the continuous decline of market share of self owned brand passenger cars.

In June this year, the sales volume of self owned brand passenger cars was 590000, a year-on-year decrease of 11.6%, and the market share was only 33.5%, which was the lowest in a single month since records were made in 2009. In the first half of the year, the sales volume of self owned brand passenger cars was 2.854 million, a year-on-year decrease of 29%. The market share of self owned brand passenger cars decreased by 3.4 percentage points to 36.3%.

While the market share of independent brands is declining, the market share of Japanese and German automobile companies continues to rise, and the market performance is better than the average level of the industry. According to the official data released by various auto companies, in the first half of the year, Toyota sold 753000 vehicles in the Chinese market, down only 2.2%; BMW group sold 329000 vehicles, down 6% year-on-year; Mercedes Benz delivered 346000 new cars in China, up 0.4% year-on-year.

"The decline in the market share of independent brands is likely due to the recovery of the market in the second quarter, mainly from the group whose consumption was suppressed in the first quarter. This group of joint ventures may be able to choose better brands. In the first half of the year, the economic ability of low-income people was more affected, which is exactly the customer group of independent brands. " Xu Haidong told reporters.

However, as the independent brand market share of Xudong will be released, it will even be restrained by the overall market demand of Haidong.

It is worth noting that in recent years, the trend of consumption upgrading in China's automobile market is very obvious. In June, luxury car retail sales increased by 27% year-on-year, and the market share reached a record high of 14.9%. The average price of new car consumption tends to increase year by year, and the sales share of high-end models above 250000 yuan continues to increase. The market below RMB 80000 has been declining continuously, and its proportion in the passenger car market has dropped from 28% in 2017 to 16% in the first half of this year.

In fact, behind the decline of market share of independent brands, it is not the decline of competitiveness of independent brands, but the change of consumption power. The decline in the low-end car market has not only impacted SAIC GM Wuling, Chery, Geely and great wall, but also joint venture car companies such as Skoda, Chevrolet and Kia, which mainly sell cheap cars, are also facing great challenges.

In addition to the upgrading of consumption, there is also the adjustment of the price system at the supply side. In the first quarter of this year, auto companies intensified the "price war" in the market through activities such as price reduction and promotion. The downward transmission of price adjustment from luxury cars, joint ventures and independent brands has brought about a chain reaction of "domino". The profit of self owned brand is low, and the price reduction space is the smallest, so it falls into the inferior position in the competition with joint venture automobile enterprises. This has also led to Zhongtai, Lifan, Haima and other marginal independent brands, which are at a market disadvantage in terms of products, technology and design, and have lost their only price attractiveness, and are almost eliminated by the market.

Low ebb of new energy vehicles

The new energy vehicle market is still at a low ebb. In June this year, the production and sales of new energy vehicles were 102000 and 104000 respectively, down 25.80% and 33.1% year on year. In the first half of the year, the production and sales of new energy vehicles were 397000 and 393000, respectively, down 36.5% and 37.4% year on year.

Although the new policy on subsidies for new energy vehicles has been issued, the subsidy intensity has been smoothly transferred this year and the subsidy policy has been extended for two years, the effect of the decline is still continuing, and the new energy vehicles have not improved significantly in the second quarter.

"The obvious decline of new energy vehicles this year is mainly due to the large decline in subsidies last year, which leads to the negative marginal effect of manufacturers, that is to say, they are in a state of loss. Under the new subsidy policy this year, manufacturers may also be in a state of marginal loss. Therefore, manufacturers should make corresponding adjustments in strategy. " Xu Haidong told reporters.

He believes that due to the large decline in the second half of last year and the low market base, the new energy vehicle market may grow slightly in the third and fourth quarters. In addition, driven by domestic Tesla, the scale of new energy vehicle market this year will be about 1-1.1 million.

It is worth noting that in the first half of the year, the sales of new energy vehicles such as online car Hailing decreased significantly. However, due to the drive of Tesla and the introduction of new energy vehicles of Chinese brands such as Weilai, Xiaopeng and ideal, the market scale of private electric vehicles has slightly increased. This also confirms that the popularity of new energy vehicles is wider, in addition, consumers have gradually recognized new energy vehicles.

Like the fuel vehicle market, China's new energy vehicle market is also experiencing structural adjustment of consumer groups. The scale of medium and high-end markets such as Tesla, Weilai and ideal has continued to expand, but the low-end market with the main purpose of "occupying the number" or acting as the main purpose is shrinking.

In the first half of this year, the production of pure electric vehicles of Tesla is the best-selling model in the first half of this year. The domestic production of Tesla has brought benefits to the popularization of new energy vehicles in China, and at the same time, it has brought market competition pressure to local new energy vehicle enterprises.

?