Looking ahead to 2024, leading experts predict five trends in the automotive industry


Zhao Linlin

2023 is about to come to an end, in this year, the price war from the beginning to the end of the year, a variety of challenges and changes. However, in 2023, new energy vehicles still promote the industry to accelerate Mercedes, and the industrial chain has also shown strong resilience.


What opportunities and challenges will the automotive industry face in 2024? How will the industry change?


In this regard, China Automotive News invited Fu Yuwu, honorary chairman of the China Society of Automotive Engineering, Ye Shengji, Chief engineer of the China Association of Automobile Manufacturers, Wu Songquan, senior chief expert of the China Automotive Center, Chief engineer and professor level Senior engineer of the China Automotive Strategy and Policy Research Center, Liu Zongwei, assistant dean of the Institute of Automotive Industry and Technology Strategy, Tsinghua University (School of Vehicle), and Cui Dongshu, Secretary general of the National Passenger Car Market Information Association, forecast the development trend of China's automotive industry in 2024.



01 Automobile market trend forecast


Fu Yuwu: The car market is strongly related to national economic indexes such as GDP. When the national economy is good and GDP is high, the development situation of automobiles will be good. The original growth rate of the auto market is twice, 1.5 times the GDP growth rate, and the growth rate of the auto market in the past two years is lower than the GDP growth rate, which also shows that the national economy is not prosperous enough, domestic demand growth is weak, so the car market next year can not be said to be very optimistic, it should be cautiously optimistic, the total growth is slightly higher than this year.


Ye Shengji: From the current point of view, the automobile market has maintained steady development on the whole, and the overall trend is stable and upward. However, problems such as weak domestic demand remain, so the auto market remains cautiously optimistic. It is expected that the total automobile market in 2024 will maintain basic stability and slight growth on the original basis. Because the current base volume is very large, so to achieve growth, there is no doubt that we must tap the potential domestic demand, strengthen the impetus of domestic demand, and strive to achieve sustainable export development.


Wu Songquan: In 2023, China's macro economy will maintain a good trend, and car sales will hit a record high, but it is also necessary to see that in 2023, car companies' price reduction promotion and export will play a strong role in driving demand, and the price war will erode corporate profits very seriously, and this model of price for volume is not sustainable. Looking ahead to 2024, the just-concluded Central Economic Work Conference called for "consolidating and strengthening the good trend of economic recovery", placing the expansion of domestic demand in a prominent position, and clearly proposing to boost the consumption of new energy vehicles. It is expected that the policy of promoting consumption is expected to continue next year, and the automobile consumption environment is further improved, but China's economy is still facing the triple pressure of demand contraction, supply shock and expected weakening. The commercial application of autonomous vehicles will lay an important foundation for the long-term growth of the new energy vehicle market. Next year, the supply of automobiles, especially intelligent new energy vehicles, will be richer, the cost performance will be improved, and the strong overseas demand will promote the rapid growth of exports. It is expected that in 2024, auto sales will continue to grow on a high base, but the growth rate will fall to less than 5%; Sales of new energy vehicles are expected to exceed 11 million, and the growth rate will be lower than in 2023.


Liu Zongwei: In 2024, China's domestic auto sales will be stable, or can achieve a slight increase; At the same time, export sales are expected to increase to a certain extent, becoming an important driving force for the overall market growth, and the proportion of independent brands in export products will further increase. However, the export trade model will face increasingly stringent restrictions, and auto companies must accelerate their overseas layout to achieve better global development.


Cui Dongshu: In 2024, China's auto market will usher in a steady and positive trend. 2024 is also a big year for the automobile market, because the Spring Festival next year will be late, and the consumption before the Spring Festival next year will be relatively strong, which will bring a better pulling effect on the automobile market.


02 New energy vehicles continue to rise?


Fu Yuwu: Next year, the new energy vehicle market will further grow, but the growth rate will be lower than the two years, and there will be no more doubling and 50% growth. But next year, under the slowdown of new energy vehicles, the total will rise.


Ye Shengji: For the new energy vehicle market next year, in addition to maintaining the effective implementation of existing policies, the focus should be on opening up in cities with limited purchases, and further encouraging the popularization and application of new energy vehicles. When it is difficult for some megacities to fully open up, they should also make active efforts and contributions - by a large scale. At the same time, it is necessary to promote the electrification rate of the urban public sphere and popularize the use of new energy vehicles in a large area. The vast number of fourth - and fifth-tier cities and towns in developed areas should also actively promote the electrification of the public sphere. It is expected that new energy vehicles will continue to grow next year on the basis of this year, and the growth rate will reach 20%.


Liu Zongwei: With the increase of the base, the growth rate of China's new energy vehicle market will slow down, but the market penetration rate will continue to expand, which means that the absolute number of new energy vehicle sales will reach a new high, and the replacement process of fuel vehicles is still accelerating. Specifically, there are the following trends: first, new energy products will accelerate the expansion of the mainstream market of A-class passenger cars in the tens of millions of units, second, range extension and intermixing products will accelerate and continue to grow, and third, the proportion of electric vehicles in overseas products will further increase, and achieve good sales in A wider range of national/regional markets.


03 What is the future of joint venture brand


Wu Songquan: With the development of electric intelligence, independent brands have taken the lead, intelligent electric vehicle technology is relatively leading, product competitiveness is stronger, mass production is faster, and the leading advantage accumulated by traditional foreign brands in the fuel era is being weakened. On the whole, the development of the main traditional foreign brands of new energy vehicles lags behind, there are many reasons, such as the new energy vehicle business is still in the loss period, the product competitiveness is not strong, and the rapid growth of China's new energy vehicles is not expected, the most important is the strategic adjustment lag. From the perspective of future development, the main traditional foreign brands still have comprehensive advantages in the overall market size, capital accumulation, brand value, global industrial layout and other aspects, and some foreign electric technology foundation is also very deep. On the one hand, joint venture brands are accelerating the adjustment of organizational structure by improving the layout in China and strengthening local research and development to adapt to the development trend of electrification and intelligence. On the other hand, the Sino-foreign cooperation model is also expected to usher in the 2.0 era. With the advantage of new energy vehicles, China's cooperation status has been greatly improved, and some Chinese and foreign enterprises have strengthened cooperation in research and development, technology, brand, export, supply chain and other aspects, changing the one-way import mode of foreign capital since the joint venture.


Liu Zongwei: On the whole, the joint venture brand's previous forward-looking investment in electrification and intelligent transformation is insufficient and the speed of action is slow, leading to severe challenges in the Chinese market at least in the next few years. 2024 is expected to remain a very difficult year for joint venture brands, and their market share will decline. Whether the shrinking market share can be reversed in the future depends on the current actions of the joint venture brands: those foreign enterprises that make full use of all kinds of innovation resources in China, accurately define, rationally plan, efficiently research and develop, and quickly put in new smart products are likely to recover; On the contrary, the difficulties of "elephant turning around" will make more joint venture brands tend to be marginalized.


04 Car market roll?


Fu Yuwu: A word to say this year's car market is volume, and next year will be more volume. Because of the high degree of product homogeneity, can not open the distance, so it must lead to volume, coupled with domestic demand and weak, so next year the competition in the automotive industry will be very fierce.


Ye Shengji: The inner volume has attracted great attention from the industry, and the inner volume also shows the unhealthy state of our industrial development to a certain extent. It is hoped that next year can strive to avoid a price war, enterprises to maintain a more rational attitude, based on enterprises continue to strengthen internal strength, continuous innovation, improve operational performance, reduce costs and increase efficiency, improve product cost performance, so as to enhance their market competitiveness.


Wu Songquan: Since 2023, a large number of car companies, especially new energy vehicle companies, have started a continuous "price war". Different from the previous industry price reduction behavior, the price war covers a wide range, the price reduction range is large, and the market and industry have a far-reaching impact. The price war will accelerate the survival of the fittest and accelerate the adjustment of the industrial pattern. According to the survey, the annual sales of 400,000 to 500,000 vehicles is the break-even point of new energy vehicle enterprises, with the increase of market size and industrial concentration, there will be more advantageous enterprises to achieve profits with the effect of scale. On the other hand, in addition to price cuts, enterprises are also taking a variety of strategies to actively fight. Carry out differentiated competition from design, technology and service, and make efforts to subdivide the track; Relying on technology and industrial chain advantages, through exports to obtain higher profits. In 2024, the competition of various car companies in products, technology, marketing, services and other aspects will also intensify, and the leading advantage of the leading enterprises will be further increased. The auto price war will continue and even become more intense.


05 New power status is expected to further enhance?


Wu Songquan: Since 2023, Volkswagen Group has successively invested in Xiaopeng Automobile, Stellantis Group has invested in Zerorun Automobile and other new power vehicle enterprises, and Volkswagen Group has also invested in Horizon, Zhongke Chuangda, Guoxuan High-tech and other parts enterprises. Chinese and foreign enterprises have launched a variety of cooperation in the field of electrification and intelligence. In essence, this kind of cooperation between Chinese and foreign enterprises draws on each other's needs and complementary advantages. On the one hand, multinational car companies can use China's existing electrification and intelligent technology and supply chain system to accelerate the process of electrification and intelligence and enhance their competitiveness in China. On the other hand, new power enterprises use the brand advantages, manufacturing and technology advantages, international channels and experience of multinational automobile enterprises to realize the global market layout faster; It can also rely on large-scale capital injection to improve its own financial situation, as well as technology introduction and cooperation, ensure the healthy development of business, and have a good help for the promotion of new forces.


Cui Dongshu: The new forces of foreign investment actually play a small role, which can be seen from the performance of some enterprises after foreign investment in the past. The entry of foreign capital does not necessarily lead to the improvement of technology, product quality or consumer recognition. Therefore, for the new forces, it is still necessary to rely on their own efforts to achieve the promotion of enterprises and high-quality development.


Originally published by China Automotive News on December 22, 2023