The Seven Conjectures of the Auto Market in the Second Half of 2012

In the past half year in 2012, reviewing the past six months, the road to China’s automobile industry has not been smooth, the economic situation at home and abroad has been not optimistic, the momentum of manufacturers to increase production growth has been fierce, dealers’ inventory pressure has increased, and the sales of self-owned brands have declined. To this, it also filled the car industry with pessimism and disappointment. In the second half of the year, what other variables will be added to the Chinese car market: whether the policy of giving power can be introduced or not, whether the sales volume can be further improved, whether the restricted cities will be further expanded, and whether the momentum of dealers’ withdrawal can be contained. Industry-focused topics.

Conjecture 1

Sales increase by 10%?

According to the data from the China Association of Automobile Manufacturers, from January to May, domestic automobile production and sales reached 8.003 million units and 802.35 million units, an increase of 3.19% and 1.07% year-on-year respectively. The overall situation showed a stabilization trend, among which sales have turned from negative growth to positive growth. . At the end of May, the inventory of domestic auto companies was 768,900, which was a decrease of 28,500 from the end of April. Without relying on policy incentives, the Chinese auto industry has shown signs of recovery. Concerns about the slowdown in China’s economic development around the world appear to be redundant in the auto industry.

The continuous downturn of the past year and the first quarter of this year has made many agencies and experts very cautious about the prediction of the Chinese auto market. Over the past decade, the rapid growth of car sales has brought pressure on China's transportation and the environment, among which traffic congestion has caused particularly headaches for urban residents and authorities. In addition, the government’s economic development target for the first time this year “broken eight” and it also makes people feel the pressure of economic downturn. Demand for consumers to buy cars is likely to be postponed.

A statistic shows that 47% of people expect the growth rate of the auto market to be less than 5% in the second half of the year, and 42% of relative optimists believe that this figure will be between 5% and 10%. The respondents who believe that the auto market will maintain double-digit growth in the second half of the year account for only 11% of the total number of voters.

However, China’s auto market is not entirely unimpressive. Promotion plans for environmentally friendly and energy-saving models, a slight fall in oil prices, and interest rate cuts may all lead to an increase in car sales. Moreover, the factors for the strong growth of the Chinese auto market still exist: urbanization continues to advance, the middle-class population continues to grow, and a large number of households have not yet acquired the first car. This shows that the mid-to-long term Chinese auto market still has potential for development. The market breakthroughs in the first-tier cities are being redeemed, and the market space in the second and third-tier cities is reflected in the overall economic development level. In addition, restrictions on purchases in several cities such as Guangzhou are likely to lead to restrictions on purchases in other cities. Therefore, consumer psychology will encourage consumers in some sensitive cities to spend ahead of time, which will increase overall sales.

According to a recent industry survey conducted by a website, the vast majority of people in the industry are not optimistic about the auto market's continued strong recovery in the second half of the year. Taking into consideration all aspects of the situation, the Journal believes that an increase of 10% is unlikely, but the increase over the first half of the year is still possible.

Guess to achieve the index: ★ ★ ★ ★

Conjecture 2

Can new energy vehicles usher in new life?

Despite the impact of the electric vehicle's fire incident, it has not stopped the development of new energy vehicles in China. However, it is still a dream to make new energy vehicles leapfrog in the short term. One of the important reasons is the slow development of technology. Although new inventions continue to emerge, the contribution to the practical use of new energy vehicles is still not large enough.

Statistics show that in the first quarter of this year, China sold a total of 10,202 energy-saving and new energy vehicles, including 1830 pure electric vehicles, 1,499 hybrid vehicles, and 6,873 alternative fuel vehicles. With regard to policy support, the government's actions are unprecedented. From March this year, the Ministry of Science and Technology released the “12th Five-Year Plan” for the development of electric vehicle science and technology (abstract), and at the meeting of the State Council in April passed the “Energy Conservation and New Energy Vehicle Industry Development Plan (2012-2020)”. The implementation of the technical standards for pure electric passenger cars and the repeated revision of the "Planning" will come soon. The policies and regulations that have been introduced in a intensive manner, as well as the statements made by officials of various ministries and commissions to "strengthen the new energy country strategy," have made it clear that the government intends to warm up new energy vehicles. Whether it is the 10-year new energy vehicle plan led by the Ministry of Industry and Information Technology or the 12th Five-Year Plan for electric vehicles formulated by the Ministry of Science and Technology, it is now a critical period for sprinting sales and breaking through core technologies. Ministry of Industry and Information Technology took the lead in the formulation of the “planning”, in which the mid-term goal of 2015 was the cumulative production and sales volume of pure electric vehicles and plug-in hybrid vehicles reaching 500,000 vehicles.

The special plan for the 12th Five-Year Plan for electric vehicles of the Ministry of Science and Technology aims to achieve sales volume of pure electric vehicles of 1% of the total sales of similar models in 2015. According to the forecast data of China Automobile Association, the annual sales of passenger cars in China were about 12 million vehicles in 2015, and the sales volume of pure electric vehicles accounted for 1%, that is, 120,000 vehicles.

Comments: At present, China's various types of energy-saving and new energy vehicles sell a total of more than 20,000 vehicles, most of which are hybrid-based energy-saving vehicles. Pure-electric and plug-in new energy vehicles have a very low sales ratio. The industry believes that it is difficult to achieve the planned sales target.

Guess to achieve the index: ★ ★

Conjecture 3

Will the auto market stimulus policy continue to come?

Compared with Western developed countries, one of the distinctive features of China’s auto market is its strong policy influence. Since the second half of 2008, the domestic auto market has continued to slump under the impact of the international financial crisis. In order to deal with the international financial crisis, the State Council launched ten major industry revitalization plans in early 2009, including the adjustment and revitalization of the automobile industry. With the promotion of a series of policies to expand automobile consumption, including the reduction of vehicle purchase tax, the use of vehicles to the countryside, and trade-in replacement, the Chinese auto market has stabilized and has experienced strong growth. Driven by the automotive revitalization plan, China's automobile production and sales increased from more than 9 million vehicles in 2008 to more than 18 million in 2010, and doubled in two years. The Chinese auto market also surpassed the United States to become the world’s largest-selling auto market. However, the short-term stimulus policy is difficult to maintain the balance of a market for a long time. In 2011, the policy of stimulating consumption of cars, such as the reduction of vehicle purchase tax, car to the countryside, and trade-in replacement, all withdrew. The annual production and sales of automobiles increased by 0.84% ​​and 2.45%, respectively, which was the lowest growth rate in the past decade or so.

Recently, it was reported that in order to prevent a downward trend in economic growth, a new round of auto consumption stimulus policies will be introduced in the near future. Among them, the two major subsidy policies for autos going to the countryside and the old ones that were concluded in December 2010 have been extended, and the 6 billion yuan energy subsidies have also come out. More than a year later, the auto market stimulus policy is about to come back. Will the auto market usher in a new wave of "policy cities"? Policy-based stimulus is only an expedient measure. It can only quickly release the demand for the auto market in the short term. However, once the stimulus policy is withdrawn, the auto market will have to face the painful period after demand is overdrawn. If the auto market requires policy incentives whenever it encounters a trough, then the auto market is bound to be in a cycle of stimulus callbacks and stimulus and then callbacks.

Comments: When the auto market is in the doldrums, appropriate policy incentives to help the industry emerge from its predicament are necessary. However, this policy stimulus must not be used as a magic weapon to develop the auto market. For the auto market, a stable and healthy competitive environment is an important factor in safeguarding its healthy development. When there is a policy stimulus, no matter what the car is sold out, it will weaken the motivation of R & D and innovation. When the auto market was pulled back, manufacturers started a price war and waited for the next stimuli in the “most uncontained” way. In the long run, it is not conducive to the stable development of the auto market.

Guess to achieve the index: ★ ★ ★ ★

Conjecture 4

The sinking of channels, the second and third-tier cities usher in Xiaoyangchun?

Statistics show that China’s first-tier cities have 150 million people, accounting for 11.2% of the country; secondary cities have 350 million people, accounting for 25.9%; and cities with tertiary levels and below have 800 million people, accounting for 62.9%. Although the current level of sales in the primary market still occupies the majority, the huge potential of the total population for the car has determined that the second, third and even third and fourth tier markets will certainly become China's most important auto market in the near future.

The data from the China Association of Automobile Manufacturers shows that in the past few years, the share of the automobile market in the second and third tier cities has been rising rapidly, with a share of 29.3% in 2010 and exceeding 30% in 2011. At the same time, the share of the automotive market in first-tier cities has been declining year by year, dropping by 2 to 3 percentage points annually, and the focus of consumption in the auto market has clearly shifted from first-tier cities to second-tier and third-tier cities.

Therefore, major automakers have formulated ambitious plans for capacity expansion. The importance of the secondary and tertiary markets has also been mentioned in the height of corporate development strategies. Judging from the current development strategy of the manufacturers, almost all auto manufacturers have announced that they must accelerate the sinking of channels and increase the investment in marketing resources in the secondary and tertiary markets. This indicates that the secondary and tertiary markets will become the next 10 years in China. The main battlefield of car marketing. It is understood that China’s major auto companies have basically established after-sales service networks in prefecture-level cities and cities, but the coverage of rural after-sales service networks at the county level and below is still very few, and even vacant. China's rural areas are vast and there are relatively few cars. This is obviously the final battleground for channel sinking. It is understood that up to now, mainstream auto companies such as Dongfeng Nissan, Guangzhou Honda, Shenlong Automobile, Dongfeng Yueda Kia, and Changan Ford have adjusted their regional policies to meet the unique needs and market characteristics of the third- and fourth-tier auto market.

Comments: At present, the auto manufacturers are stepping up the implementation of the sinking channels, and have adjusted their marketing systems to adapt to the changes brought about by sinking channels. At the same time, it delegates power to various sales regions, and at the same time as decentralization, it taps the market potential through deepening the third- and fourth-tier markets. With the implementation of a series of marketing policies and the increase in the number of terminal sales, the second- and third-tier cities will surely usher in the market. .

Guess to achieve the index: ★ ★ ★ ★ ★

Conjecture 5

Will dealers retreat from the tide?

The fundamental reason for the distributors to withdraw from the network is that the inventory pressure is too high, the funds cannot be turned around, and when they are facing huge losses, they can only take the initiative to withdraw from the network if they can no longer sustain. As the market growth rate is lower than the manufacturer's expectations, the dealer's inventory is further increased. As the end of the automobile industry chain, the bitterness behind the bright data is only known to dealers.

In view of the current situation in the domestic auto market, how much pressure is on the stock market, a website has conducted a thorough understanding of the inventory pressure of mainstream brand dealers in key cities. As a result of the survey, among the nearly 100 dealers in the country, more than half of the distributors had an inventory ratio of more than 1.9, and the highest even reached 4.3. Judging from this, car dealers are currently under tight financial conditions and business operations are difficult to make.

Some analysts said that the withdrawal of 4S shop dealers is actually a self-help behavior and gradually developed into a common phenomenon. Since the beginning of this year, the market has been stagnant, dealer stocks have gradually increased, and cash flow has failed. Many dealers are facing the risk of capital-side disruption, and corporate survival is difficult to sustain. Previously, due to the high profitability and high returns of 4S stores, 4S stores have mushroomed among cities of all sizes. However, due to the lack of unified planning and research, 4S shops in the city flooded. The disorderly expansion directly led to the 4S shop from earning money in the cornucopia as a hole filled with dissatisfaction.

A number of dealers believe that the rapid expansion of dealer networks by automakers has led to a decline in profitability for many dealers last year. This is one of the reasons for the withdrawal of the network. It is understood that most of the 4S shop dealers who have retired from the network are distribution outlets laid in second-tier and third-tier cities. The completion time is relatively short, only two or three years. Insiders pointed out that as the number of competitors continues to increase, the growth of auto consumption has slowed down. The newly established 4S stores are under pressure to operate and the fixed costs are higher than those of old dealers. In addition, there are a number of regions due to the construction of a number of 4S stores led to fierce competition.

Comment: According to the rules, before selling a car to a consumer, a car dealer needs to pay the car company a full amount. The dealers who sell mid-size cars have to face the financial pressure of tens of millions of yuan or even 100 million yuan on their own because of poor pressroom and sales. In desperation, some dealers had to choose a substantial price cuts, the automobile circulation industry entered the nightmare of selling cars that is a loss. It is foreseeable that in the second half of the year, dealers in some regions will usher in the tide of withdrawal.

Guess to achieve the index: ★ ★ ★ ★

Conjecture 6

Luxury cars and SUVs will continue to rise strongly?

Under the background that the overall auto market in the country is not very booming, the sales of domestic luxury car camps are still leaping forward, without being affected by the overall downturn in the auto market. The German luxury car brands represented by Mercedes-Benz, BMW, Audi and the American luxury car brands represented by Cadillac grew even more in the first half of the year, and their growth rate exceeded the industry average. In particular, it is worth mentioning that the luxury SUV is still unabated, but also stimulated the car companies to focus on the domestic or the introduction of luxury SUV models.

The total sales volume of the Cadillac brand in the first quarter reached 7856 vehicles, an increase of 19.9% ​​year-on-year. In the same period, FAW-VW Audi sold a total of 89,075 vehicles, an increase of 41% year-on-year. Among them, the monthly sales in March reached a record high of 31,245 units, an increase of 37.8%. As for domestic cars, the three domestically produced Audi A6L, A4L and Q5 models sold a total of 25,237 vehicles in March, an increase of nearly 50% compared with the same period last year. In the first 3 months of this year, BMW Group maintained a strong growth in mainland China and created a single-quarter sales record. Its major vehicle models have all achieved significant growth: BMW7’s flagship model has increased nearly 40% year-on-year, and the BMW 5 Series continues to maintain a good sales. What is more, the total sales volume of the BMW X-Series exceeds 20,000 vehicles, which represents a year-on-year increase of 92%. In addition, Mercedes-Benz delivered a total of 19,080 Mercedes, Smart, AMG, and Maybach vehicles in the Chinese mainland in the first quarter, accumulating sales of 54,720 vehicles, which was a year-on-year increase of 24%.

According to predictions, as ultra-luxury cars, by 2015, the sales of ultra-luxury vehicles such as Bentley, Lamborghini, Maserati, and Ferrari will nearly double in China, to approximately 8,100 vehicles/year.

In the SUV market, whether it is low-end or high-end, the momentum of strong growth remains unabated. According to industry insiders, the SUV market has grown rapidly since 2009, and there have been many purchases and exchanges of customers. It is expected that the SUV market will maintain rapid growth within the next five years. In the next three years, SUVs will also maintain a 20% growth rate. Although 82% of the respondents in the survey believe that there are too many models in the SUV market to be dazzling, experts believe that the market's SUV models are in line with market demand.

Comments: Whether it is a luxury car or an SUV, it is obvious that the market will continue to maintain relatively high growth in the second half of the year, because the space for this market demand is still relatively rigid. Practice has proved that no matter what kind of restraint policy can not arouse luxury. The growth of the car. In addition, both the market itself, consumer attitudes and corporate strategy have determined that the Chinese SUV market will continue to develop rapidly.

Guess to achieve the index: ★ ★ ★ ★ ★

Guess 7

The outlook for independent brands is dazed?

For the self-owned brand, the phenomenon of the backlog of companies in the market is more and heavier, and some local dealers even have a stock ratio of 1:3. An industry insider who declined to be named said that a large number of banks will not only damage the interests of dealers, but also cause a series of adverse effects on the brand.

Even so, many domestic brands have completed their half-year tasks quite hard. According to the statistics of the Federation of Sports Associations, the top ten passenger car sales rankings, only Great Wall Motor enters the top ten, its half-year mission is 300,000 (600,000 vehicles throughout the year), but in the latest statistics, its Only 270,000 units were completed in half a year; Chery Automobile was far away from its half-year mission (350,000 vehicles) and completed nearly 280,000 vehicles in half a year.

When major cities have implemented severe sales restrictions such as Yaohao and license auctions due to increasingly severe traffic jams, independent brands that are already in a downslide will be “somewhat worse”. According to data released by the China Association of Automobile Manufacturers recently, in the first five months of this year, sales of self-owned passenger cars reached 2.652 million, a year-on-year drop of 2%, and the share of total passenger car sales fell by 3.3 percentage points, further reducing the rate of decline. . Regardless of whether Beijing, which has a shake number restriction, or Shanghai, which has a high price, has adopted a license auction, it is a test for independent brands.

In the face of the fact that first-tier cities have restricted purchases, many independent brands have expressed their desire to further sink into third- and fourth-tier cities. However, many joint-venture brands are now focusing on second- and third-tier cities, and they will focus on opening up new markets. Ground. It is foreseeable that in the “surrounding the city,” this breakthrough road, independent brands will still face a field battle.

Comments: Despite the difficulties of independent brands in the domestic market, some self-owned brands have experienced rapid growth in exports. In the first quarter of this year, the export growth rate was still close to 10% when the car sales volume dropped by 3.4%. In the first half of the year, Geely Automobile's export growth was more than 210%, and Chery’s overseas sales in June continued to remain high, reaching 2,012 units, a year-on-year increase of 20.7%, again breaking the 20,000 mark. As of the end of June, Chery’s cumulative exports have reached 91,605 vehicles this year, and it is expected to achieve an annual export sales target of 170,000 vehicles in advance. This kind of export success shows that the self-owned brand automotive products have been recognized by a number of overseas consumers. But overall, the future development path of independent brands is bound to be full of twists and turns.