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Yang Haiyan, Wu Ziye, Li Suwan, Yu Liyan
In October, the production and sales dropped by more than 10%, the negative growth of annual sales was almost undetermined, the dealer's inventory was high, and the cash flow of automobile enterprises was tight... All kinds of signs indicate that the sales ceiling of China's automobile market is gradually emerging.
At the 2018 Guangzhou Auto Show, which opened on November 16, a number of auto company executives interviewed by China Business News basically set the tone. China's auto market has maintained rapid growth for many years, reaching 29 million units in 2017 - such a production and marketing base has been large, and high-speed growth is unlikely to continue. This year's negative growth is almost certain, Low growth will also become the new normal of the future development of the car market.
"Previously, the agency predicted that the sales volume of China's car market in 2025 would be about 35 million vehicles, but at present, this number may shrink to 30 million vehicles, and the compound annual growth rate in the future may be about 2%~3%." Wang Yongqing, general manager of SAIC GM, told the First Financial reporter.
Tian Qingjiu, general manager of FAW Toyota Motor Sales Co., Ltd., believes that when the sales volume is close to 30 million vehicles that year, the domestic car market will bid farewell to the high growth, and there will be a circular arc top, and fluctuate and hover around this data.
The negative growth of the car market in 2018 is almost certain
According to the data of the China Association of Automobile Manufacturers (hereinafter referred to as the "China Association of Automobile Manufacturers"), in October this year, the production and sales of automobiles were 2334500 and 2380100, respectively, down 10.05% and 11.70% year on year. Among them, the sales of passenger vehicles and commercial vehicles declined by 13% and 2.8% respectively.
From January to October this year, the production and sales of automobiles were 22.8258 million and 22.8709 million, down 0.39% and 0.06% year on year. Although the production and sales of commercial vehicles increased by 3.39% and 5.47% respectively, the production and sales of passenger vehicles were relatively low, with 19.3502 million and 19.304 million units, down 1.04% and 1.02% respectively.
Tian Qingjiu predicted that the car market in China might fall by the same amount in November and December as in October.
"Car sales have declined significantly, which is not ideal as a whole. The decline in the past two months is even more obvious." Chen Shihua, assistant secretary-general of the China Automobile Association, told China Business News. In his judgment, it is almost impossible for the sales volume of the next two months to exceed that of the same period last year, which means that the negative growth of the annual sales volume is basically unavoidable.
If calculated from 2000, 2018 may become the first year of negative growth in China's car market in the past 20 years.
The First Finance reporter found that before the global financial crisis broke out in 2008 (2000~2008), the average annual growth rate of China's car market was more than 30%; In 2008, under the influence of the financial crisis, the growth rate of automobile sales hit a new low since 1999 at 6.7%, but the data is still higher than that in recent years; From 2009 to 2010, the car market grew again at a high speed under the stimulus of the purchase tax policy, with the growth rate reaching 46% and 32% respectively; In the following seven years, although the sales growth rate was 14% in 2013 and 13% in 2016, the overall growth rate gradually slowed down to the "single digit growth era"; In 2017, the sales volume of passenger cars in a narrow sense only increased by 2.7%.
"The period of rapid growth of production and marketing may have passed, and low growth may be the normal state of future development." On October 23, Xin Guobin, Vice Minister of Industry and Information Technology, said at the press conference on the development of industrial communication industry in the first three quarters.
On the other hand, under the downward pressure of the automobile market, the phenomenon of automobile enterprises exchanging price for volume is becoming more and more common - this has led to a series of phenomena, such as the decline of automobile enterprises' profits, tight cash flow and high dealer inventory, to a certain extent.
According to the third quarter reports of 17 listed companies combed by China Business News, nearly 70% of the listed auto companies' net profits declined, even if their performance increased year on year SAIC Group 、 GAC Group The growth rate in the third quarter also slowed down significantly compared with the first half of the year. In the first three quarters of this year, the net profit of many automobile enterprises declined significantly. For example, FAW car 、 Haima Automobile 、 Chang'an Automobile 、 BYD 、 JAC The net profit decreased by 53.6%, 660%, 80%, 45.3% and 78% respectively.
While profits have narrowed, the operating cash flow of auto enterprises has also generally tightened. For example, SAIC Group's net cash flow from operating activities in the first three quarters was - 29.3 billion yuan, down 248% from the same period last year; GAC Group's cash flow from operating activities in the first three quarters was also -5218 million yuan, down 216% year on year.
In addition, in order to achieve the sales target, the dealer's inventory also reached a high level and exceeded the warning line for 10 consecutive months. According to the data released by the China Automobile Circulation Association, the inventory warning index of automobile dealers reached 66.9% in October, up 17 percentage points year on year, the highest in three years.
Car Market Encounters Ceiling?
Why is the car market depressed? Is the industry ceiling really coming? The industry is eager to find the answer.
Shen Jinjun, president of China Automobile Circulation Association, said to the reporter of First Finance and Economics that the increase and decrease of automobile sales is cyclical. This time, there are both internal and external factors. He judged that there would be a ceiling in the development of China's automobile market.
"Observing the data of the American car market for nearly 20 years, the annual sales of 17.5 million cars are the peak, and the annual sales of 16.5 million cars are low. The overall data hovers between these two points. The development of China's car market cannot always maintain growth. In the big economic environment, it will definitely have a ceiling." Shen Jinjun further explained.
For the "height" of the ceiling, Wang Yongqing and Tian Qingjiu both predicted that it would be about 30 million vehicles. In the latter words, when the sales volume approaches 30 million vehicles, the car market will have an arc top, and fluctuate and hover around this data.
Chen Shihua believes that China's car ownership is approaching saturation, and the structure of consumers is also changing. In the past, it was mainly to buy new cars, but now the proportion of additional purchase and replacement is increasing.
According to the data of the Ministry of Public Security, by the end of September 2018, the number of motor vehicles in China had reached 322 million, including 235 million vehicles. The number of small and micro passenger cars (private cars) registered in the name of individuals reached 184 million, accounting for 78.3% of the total number of cars. Since 2018, the number of private cars in China has increased by 1.61 million per month.
There are also many optimists in the industry regarding the ceiling of auto sales. Cui Dongshu, the secretary-general of the National Passenger Car Association, said that the auto industry will have a ceiling, but it is far from here. The per capita car ownership is relatively low, and it will take at least 20 years to reach the ceiling.
"The situation of the car market this year is more due to the weakening of purchasing power caused by the current economic fluctuations. However, from the perspective of purchase intention, China's car ownership per thousand people is 156, which is still a big gap with developed countries. Residents in the fifth and sixth tier cities still have consumption potential. Therefore, it is expected to maintain micro growth in 2019." Great Wall Automobile Li Ruifeng, the vice president, expressed a similar view to the reporter of First Finance at the Guangzhou Auto Show.
Feng Xingya, General Manager of GAC Group, said that the downward trend of the car market has nothing to do with whether the market is saturated. "It is not that China's car ownership, per capita car ownership and consumer demand for cars have reached an inflection point".
"This is not normal." Feng Xingya believes that the factors that cause the downturn in the car market are not single, and have a certain relationship with this year's macro-control, economic fluctuations, Sino US trade friction, stock market and property market and other factors.
Ji Qiwei, head of the marketing department of SAIC GM Chevrolet, said in an interview with China Business News that the current number of passenger cars in China should be 250 million to 300 million. Even if the market reaches a mature stage, there will be corresponding demand for replacement and new purchase. "Everyone is talking about wintering this year, and I think it is a new normal, but there is still a need for this part," he said.
Car enterprises spend the winter
For car companies accustomed to high-speed growth, the new normal of the car market means the arrival of intense competition.
"In this year's market, I think the pressure of each brand is really great. Under the environment of negative sales growth, the Matthew effect will be concentrated, and resources will be significantly concentrated to the top enterprises, which will have a very obvious impact on the independent brand." Ren Wei, vice president of sales of BAIC Motor Corporation Limited, told China Business News.
According to the data of China Automobile Association, in the first ten months of this year, the top ten enterprises in the sales of Chinese brand cars were SAIC, Geely, Chang'an, Dongfeng, BAIC, Great Wall, Chery, FAW, GAC and JAC, which accounted for 81.44% of the total sales of Chinese brand cars. Compared with the same period of last year, the sales of Geely and SAIC showed a double-digit rapid growth, while the growth of Chery and GAC was slightly lower. The other six enterprises showed different degrees of decline, especially Dongfeng and BAIC.
Ichiro Kobayashi, the special agent of Toyota Motor Corporation and the chairman and general manager of Toyota Motor (China) Investment Co., Ltd., believes that the market situation is still unclear, but Toyota hopes to maintain the growth momentum. To achieve this, it is necessary to introduce new technologies and new products to seize the market. Next year, FAW Toyota will launch four new cars, including the Asian Dragon and the Corolla dual engine E+.
Vigorously developing new energy vehicles has also become one of the effective ways for automobile enterprises to maintain growth in the Chinese market.
Heizman, President and CEO of Volkswagen Group (China), said that next year, Volkswagen and its partners will jointly invest more than 4 billion euros in China, including electric vehicles, connectivity, mobile travel services, research and development, efficient production processes and new product development. By 2020, Volkswagen plans to deliver about 400000 new energy vehicles in the Chinese market.
GM is also accelerating the landing of new energy vehicles in China. Wang Yongqing said that Buick will launch two new energy vehicles, the VELITE6 and Chevrolet, next year. By 2025, 8~10 new energy vehicles will be launched in the market under its three brands.
From the overall trend, intelligent interconnection is also the direction that all enterprises are striving for. SAIC GM also announced earlier that it will use smart Internet as the "second engine" to drive the growth of enterprises. Against the background of increasingly serious homogenization of automobile enterprises' products, it is trying to use intelligence to maintain its advantages.
In addition to launching new products to boost sales, auto companies are also actively combing dealer channels and accelerating the implementation of innovative models. For example, SAIC Motor said that it hopes to reconstruct the user journey driven by big data, establish a data driven "new retail" system covering the whole life cycle of users, and bring about the extension of sales and service breadth and depth.
For the market, the era of blindly seeking quantity has passed. "In the context of stable sales growth, how to improve the quality of enterprise operations and open up more growth points is the issue we are considering," Wang Yongqing said.
Editor in charge: Li Feng
