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2024

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04

China Automobile Association: "old for new" determines the rise and fall of the car market

author:

Wang Jinyu


 

The latest data released by the China Association of Automobile Manufacturers (hereinafter referred to as the "China Association of Automobile Manufacturers") show that from January to March, China's automobile production and sales were 6.606 million and 6.72 million, respectively, an increase of 6.4% and 10.6%, achieving a good start in the first quarter. Chen Shihua, deputy secretary-general of the China Automobile Association, said that 6.72 million units is the best first quarter market data since 2019, although there is still a certain gap from the historical highs of 2017 and 2018, but the production and sales situation in the first quarter of this year has returned to normal levels, and is expected to achieve 3% growth throughout the year.

 

The "internal volume" of the car market pulls down the profit margin

 

In March, automobile production and sales were 2.687 million and 2.694 million, respectively, an increase of 78.4% and 70.2% month-on-month, and an increase of 4% and 9.9% year-on-year. Chen Shihua said that a large number of new cars on the market, auto shows and other offline activities have been carried out and some areas introduced the old for new promotion policies are an important force driving the rapid growth of the car market in March. China Automobile Association deputy chief engineer Xu Haidong stressed that the first quarter of production and sales data is basically consistent with the beginning of the year, from the current market development trend, the second quarter is also very likely to show a good development trend, but the third quarter with the base rise last year and other factors, the year-on-year growth may not be too high or even decline. Therefore, the car market this year is very likely to show a high and low development trend.

 

Chen Shihua said that the relevant policy rules for scrapping and updating and replacing old with new should be introduced as soon as possible, and good interaction should be formed with local promotion and enterprise marketing. The trade-in policy may be a key factor in determining whether the car market can grow positively this year. It is worth noting that although production and sales in the first quarter showed a good growth trend, the overall economic benefits of the industry are not satisfactory. Data from the National Bureau of Statistics show that from January to February, the added value of the automobile manufacturing industry increased by 9.8% year-on-year, 2.1 percentage points higher than the added value of the manufacturing industry in the same period. The operating income was 1,371.45 billion yuan, up by 8.1% year on year; The total profit was 58.69 billion yuan, up 50.1% year on year; But industry margins are just 4.3 per cent. At present, the "internal volume" of the automobile market is serious, and under the influence of factors such as the "price war", the profits of automobile enterprises are further reduced, and the automobile industry shows a state of weak profit growth.

 

The share of autonomous passenger cars is close to 60%

 

In March, domestic auto sales reached 2.193 million units, an increase of 81.8% month-on-month and 5.1% year-on-year; Auto exports of 502,000 units, an increase of 33% month-on-month and 37.9% year-on-year. From January to March, domestic auto sales reached 5.396 million, up 6.2% year on year; Automobile exports reached 1.324 million units, up 33.2% year on year.

 

Passenger cars are an important driving force for the current positive growth of the automobile market. In March, the production and sales of passenger cars were 2.25 million and 2.236 million, up 76.7% and 67.8% month-on-month, and 4.7% and 10.9% year-on-year, respectively. From January to March, the production and sales of passenger cars were 5.609 million and 5.687 million, respectively, up 6.6% and 10.7% year-on-year. Excluding exports, domestic passenger car production and sales also showed a good growth trend. In March, the domestic sales volume of passenger cars was 1.812 million, an increase of 78.1% month-on-month and 5.8% year-on-year; 424,000 passenger cars were exported, up 34.6% month-on-month and 39.3% year-on-year. Among them, the domestic sales of traditional fuel passenger vehicles in March was 1.103 million, 67 thousand fewer than the same period last year, an increase of 70.8% compared with the previous year, down 5.7%. Chen Shihua said that with the rapid development of new energy vehicles, the market share of traditional fuel vehicles has been further squeezed, and this reduction in monthly sales will continue.

 

At present, independent brand passenger cars are in the upward development range. In March, sales of Chinese-branded passenger cars reached 1.326 million units, up 26.1 percent year on year; Its market share rose 7.2 percentage points to 59.3%. From January to March, the sales volume of Chinese brand passenger cars was 3.392 million, up 26.4% year on year; The market share reached 59.6%, up 7.4 percentage points. With the increasing popularity of intelligent networking and electric products, the market share of independent brands that have seized the first-mover advantage has increased significantly, but this does not mean that foreign/joint venture brands have no opportunities. "No foreign brand will give up on China, the world's largest car market." As Xu Haidong said, foreign/joint venture brands are accelerating the electrification, intelligence and network layout of products in China, once the "elephant completes the turnaround", it will form a positive competition with independent brands, and the market pattern may be rewritten at that time.

 

High-end brand passenger cars still show a better development trend. In March, the sales volume of domestic high-end brand passenger cars reached 398,000 units, an increase of 53% month-on-month and 10.8% year-on-year; From January to March, domestic high-end brand passenger car sales completed 1.024 million units, an increase of 7.5%.
Commercial vehicle terminals are affected by weak real estate

 

In March, the production and sales of commercial vehicles were 437,000 and 458,000, respectively, an increase of 88.1% and 82.8% month-on-month, and an increase of 0.7% and 5.6% year-on-year. In the main categories of commercial vehicles, the production and sales of passenger cars and trucks are growing. From January to March, the production and sales of commercial vehicles were 997,000 and 1,033,000, respectively, an increase of 5.1% and 10.1% year-on-year. Compared with the same period last year, the production and sales of passenger cars and trucks increased to varying degrees.

 

Compared with the rapid growth of exports, the performance of the domestic commercial vehicle market is not so good, especially the terminal market sales have not fully recovered. In March, the domestic sales volume of commercial vehicles was 380,000, double the month-on-month increase and 1.5% year-on-year increase; 78,000 commercial vehicles were exported, an increase of 24.9% quarter-on-quarter and 31% year-on-year. From January to March, the domestic sales volume of commercial vehicles was 819,000, an increase of 6.3%. 214,000 commercial vehicles were exported, up 27.5 percent year on year.

 

Chen Shihua said that in the current commercial vehicle market, the growth of wholesale volume is much higher than the growth of sales in the terminal market, which shows that enterprises are full of confidence in the economic recovery and actively prepare goods in advance. On the other hand, it also truly reflects that the terminal market has not yet returned to normal levels. At present, the construction of infrastructure projects in the domestic real estate industry is not very optimistic, which has seriously affected the sales of commercial vehicle terminal markets. Especially in the current logistics transport market, freight rates have been in a low operating state, which directly affects the update of logistics transport vehicles. In the field of public transport, which relies heavily on local financial procurement, this market segment has also been greatly affected due to the high fiscal deficit in many places.

 

Pickup truck is an important segment of the current commercial vehicle market sales growth. From January to March, the production and sales of pickup trucks were 128,000 and 135,000, respectively, an increase of 8.6% and 8.1% year-on-year. By fuel type, the production and sales of gasoline vehicles were 36,000 and 40,000, respectively, an increase of 8.1% and 21.5%. The production and sales of diesel vehicles were 88,000 and 91,000, respectively, up 7.4% and 3% year-on-year. Chen Shihua said that the growth rate of gasoline pickup trucks is much higher than that of diesel pickup trucks, which is due to the low base of gasoline pickup trucks; On the other hand, it is also related to the continuous enrichment of gasoline pickup trucks, setting off a new consumption boom.

 

With the rapid growth of pickup sales, market concentration is further strengthening. From January to March, the top five pickup truck manufacturers sold a total of 106,000 vehicles, an increase of 11.9%, accounting for 78.6% of the total sales of pickup trucks, 2.7 percentage points higher than the same period last year.

 

Automobile export growth of 30% in the future growth or slow down

 

In March, the production and sales of new energy vehicles completed 863,000 and 883,000, respectively, an increase of 28.1% and 35.3%, and the market share reached 32.8%; From January to March, the production and sales of new energy vehicles completed 2.115 million and 2.09 million, respectively, an increase of 28.2% and 31.8%, and the market share reached 31.1%. The current new energy vehicle market is still in the rapid growth range, especially in export, new energy vehicles have shown a good state of development, but the rapid growth of this export is facing great uncertainty.

 

It is worth noting that in March, the domestic sales of new energy vehicles were 758,000, an increase of 92.1% month-on-month and 32% year-on-year; 124,000 new energy vehicles were exported, an increase of 52% month-on-month and 59.4% year-on-year. From January to March, the domestic sales volume of new energy vehicles was 1.783 million, an increase of 33.3%. 307,000 new energy vehicles were exported, up 23.8 percent year-on-year.

 

In March, 502,000 vehicles were exported, an increase of 33% month-on-month and 37.9% year-on-year. Among them, 424,000 passenger cars were exported, an increase of 34.6% month-on-month and 39.3% year-on-year; 78,000 commercial vehicles were exported, an increase of 24.9% quarter-on-quarter and 31% year-on-year. From January to March, automobile exports reached 1.324 million units, up 33.2% year on year. Among them, 1.11 million passenger cars were exported, an increase of 34.3%; 214,000 commercial vehicles were exported, up 27.5 percent year on year. Xu Haidong said that the export market in the first quarter continued the trend of rapid growth since last year, but with the change of the destination country's policy, it will affect the growth rate of China's automobile exports.

 

China Automotive News, April 16, 2024