Ten-year low! Why can't imported cars sell?
Imported cars no longer smell good?
Not long ago, the statistics of the National Passenger Car Market Information Association show that in May 2023, China's car imports were only 58,400, down 18% year-on-year, from January to May, a total of 284,000 domestic car imports, down 28% year-on-year, relative to the low import volume of the past decade is still down.
According to statistics, since 2017, China's imported car sales reached 1.24 million, with an average annual rate of 10% all the way down to 880,000 in 2022. At present, in addition to Lexus, Porsche and other pure import brands, as well as Mercedes-Benz, BMW and other high-end imported models, most of the imported car brands have declined, and some of the more niche and even have almost disappeared.
"The downturn in the imported car market in recent years is mainly due to the strong performance of domestic cars, which have seized a part of the imported car market, and the good situation of domestic new energy vehicles, while the choice of imported products is relatively few." Cui Dongshu, secretary general of the National Passenger Car Market Information Association, said in an interview with a reporter from China Auto News.
Cui Dongshu further pointed out that the current trend of luxury imported cars is generally good, but with the continuous complexity of international relations, it is necessary to establish more import models in advance and maintain a reasonable scale of imported cars.
01 The monthly import volume is only about 60,000
Various data show that the imported car market is facing a profound restructuring.
From the data of this decade, it can be seen that the peak of imported car sales appeared in 2014, once reaching 1.43 million; In the following four years, that is, from 2015 to 2019, the sales of imported cars in China were basically maintained at the level of about 1.1 million; By 2020, due to the impact of the epidemic, the sales volume fell below one million, only 928,000. It stabilized slightly in 2021 and continued to decline in 2022, with annual car imports of only 885,000 units, down 5% year-on-year and falling to the lowest point in the past decade.
Entering 2023, from the situation of the first five months, the performance of the imported car market is still not optimistic. According to Cui Dongshu, in the case of better high-end market demand from January to May 2023, passenger car imports were only 280,000 units, a year-on-year plunge of 28%, and the low import volume of the past decade is still down. The current monthly imports are basically at a monthly average of about 60,000 vehicles.
The General Administration of Customs data organized by the China Automobile Association also shows that from January to May 2023, the cumulative import and export volume of auto goods in the country was 112.88 billion US dollars, an increase of 15.4%, but the import amount was only 29.62 billion US dollars, down 25.9%; In sharp contrast, exports amounted to $83.26 billion, up 43.8 percent year on year.
"Recently, the downturn in automobile imports has weakened, considering the international supply shortage caused by the previous epidemic and chip shortage, as well as the future standardization and internationalization standards, the potential to increase the increase of imported cars and promote the recovery of growth throughout the year is still large." Cui Dongshu thinks.
02 Independent rise of the wave of electrification is the main reason
"High-end atmosphere on the grade" is the unique label of imported cars in the eyes of many people. Once upon a time, "high price" was a status symbol for imported cars, such as in 2018, an imported Tesla Model 3 cost as much as 698,000 yuan. Many people in order to buy imported cars in advance, and even choose to "raise the price of the car", Lexus has been fined by the State Administration of Market Supervision.
So why have imported cars become less fragrant in recent years?
Statistics show that in 2022, the decline of second-tier luxury brands in the imported car market reached 15.3%, 11 percentage points higher than the first-line decline. Non-luxury brands are in the cracks to survive, sales declined for four consecutive years, from 2020 to 2022, three years of annual sales decline of 40%, market share from 37% in 2012 to less than 9% in 2022.
In this regard, Cui Dongshu's view is that the main reason is the rise of independent brands.
"On the one hand, the domestic car market is becoming more and more strong, which has a certain squeeze on the imported car market; On the other hand, the supply of imported cars has been seriously insufficient in the past two years, and not many new products have been launched." Cui Dongshu proposed that another reason worth pointing out is that due to the advantages in the right of way and tax exemption, domestic consumers' recognition of new energy vehicles has greatly improved, which naturally also has an impact on the imported car market dominated by fuel vehicles.
"The rapid growth momentum of new energy vehicle brands in recent years has squeezed the market of imported car brands to a certain extent." Taking the new power brand of car manufacturing, Nio, for example, its products are positioned as high-end electric vehicles, with prices ranging from 300,000 yuan to 600,000 yuan." Zhang Xiang, president of the New energy Vehicle Technology Research Institute of Jiangxi New Energy Technology Vocational College, pointed out that, in contrast, although there are many imported car brands have accelerated the electric transformation, but the "elephant" turn is not easy.
Another important reason is the localization strategy of multinational car companies in China.
In 2021, GAC Toyota will "SIENNA" localization, Senna officially listed, the new car guide price is only 309,800 ~ 405,800 yuan, before this, SIENNA was the only MPV model in the top ten sales of parallel import car market, priced between 500,000 and 600,000 yuan.
In March 2022, BMW X5 realized domestic production, with a price of 60,500 to 77,500 yuan, and the starting price was nearly 100,000 yuan cheaper than the imported model of 699,900 yuan, which directly led to a decline in the sales of imported BMW X5, from 50,000 in 2021 to 14,000 in 2022.
03 Luxury cars as the main import back to millions of hope
However, among the changes in the imported car market, there are still bright spots, and one of the more obvious trends is that the demand for luxury cars continues to grow. According to the data of the Passenger Association, the proportion of luxury cars in imported cars has risen from 79.8% in 2019 to 91% in 2023, and the proportion of ultra-luxury cars in imports has also increased slightly, which fully shows that the purchasing power of ultra-high-end consumer groups is also rising.
In terms of specific brands, in the first five months of this year, Mercedes Benz, BMW, Porsche ranked the top three car imports, cumulative imports were 77,621, 75,523, 37,150, imports have increased, Audi, Land Rover and Toyota since this year's cumulative car imports have also exceeded 10,000.
Looking ahead, although the industry is somewhat pessimistic about the performance of the imported car market, it is still cautiously optimistic.
"The core driving force for the growth of the import market is still the consumption upgrade of passenger vehicles." Cui Dongshu has said that with the withdrawal of the two-liter car purchase tax halving policy, the future growth pressure of imported cars is greater, but if the import shortage problem is rapidly improved, some imported cars will also achieve stable growth in the future.
China Automobile Circulation Association import car working committee director Wang Cun believes that China's import car market is still in the inventory stage, from the point of view of demand, the entire auto market consumption is sluggish, affecting the sales of imported cars, but overall, this year's import car market trend is relatively stable, the market has shown signs of recovery.
However, Wang also bluntly said in an interview with the media: "2023 will have recovery growth, but it is almost impossible to return to the step of 1 million vehicles."
Originally published by China Automotive News on July 7, 2023