Lead
In the new year,
"China Automotive Pictorial" interviewed Mr. Xu Haidong, deputy chief engineer of China Association of Automobile Manufacturers,
How does he see China's auto industry in 2022?
At the "2022 China Auto Market Development Forecast Summit and Investment Cooperation Conference" held recently, the China Association of Automobile Manufacturers (hereinafter referred to as the China Automobile Association) predicted that China's total automobile sales in 2022 will be 27.5 million units, an increase of 5.4% year-on-year. Among them, passenger car sales were 23 million units, an increase of 8% year-on-year; commercial vehicle sales were 4.5 million units, down 6% year-on-year; and new energy vehicle sales were 5 million units, an increase of 47% year-on-year.
The reporter of this magazine is Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers
China Automotive Pictorial: At the time of the replacement of the old and the new, how do you look at the past 2021, and how do you judge 2022?
Xu Haidong: For 2021, I personally think that the first thing is that consumption exceeds expectations. Second, due to chip constraints, our production capacity is limited. The third is the explosive growth of new energy vehicles. Similarly, there has been an explosive growth in exports.
We've had some challenges in 2021. First of all, the peak of commercial vehicle production and sales has passed. With the implementation of the dual carbon strategy, the carbon emission problem of commercial vehicles has become prominent. The state hopes that the transport capacity will be diverted to railway and water transport to achieve multimodal transport. In addition, data security in the development of smart cars is also an area of more concern this year. The State has issued a series of relevant documents to this end.
For 2022, it is still a positive growth trend. At the same time, we face a series of uncertainties. The first is the supply of chips. Correspondingly, our car inventory is currently very low. If the supply of chips is guaranteed this year, then the annual sales can reach 29.5 million units (wholesale volume of enterprises). That's 2 million more than we expected.
In addition, in 2022, China's macro economy needs to be stable. The biggest factor affecting the consumer side is the employment problem. At present, we see that the demand for automobile consumption is not bad. But whether there is moisture in demand is difficult to say. Specifically, consumers may not even have a car for several brands, so that a sales lead is double-counted many times.
China Automotive Pictorial: At the forecast summit at the end of last year, the China Association of Automobile Manufacturers predicted that the total sales of automobiles were 27.5 million units, an increase of 5.4% year-on-year. What is the basis for such a prediction?
Xu Haidong: First of all, we maintain close contact with the forecasting departments of major automobile manufacturers. We communicate about the market every month, and there are corresponding meetings every quarter. Then when we release the forecast summit, we will invite everyone to the venue to make a judgment together.
Second, the China Automobile Association and Tianjin University have a cooperation project, and the two sides use the corresponding model to make predictions. The data are available and then adjusted according to the policy.
Third, the China Automobile Association and IHS Markit also have cooperation. Each other will share relevant data every quarter, and we will also refer to it.
Finally, at the forecast summit at the end of last year, there were also many professional institutions, such as the Development Research Center of the State Council, the China Automobile Center and the IHS just mentioned. All in all, it is the enterprise + professional organization + China Automobile Association, and finally make corresponding predictions.
"China Automobile Pictorial": A major highlight of the automobile industry this year is that the development of new energy vehicles exceeds expectations. Last year (2020), sales of new energy passenger cars were forecast at 1.8 million units, but the actual number exceeded 3 million. What factors have led to a significant increase in sales? This year's forecast summit predicts that new energy sales will be 5 million vehicles. What do you think of this number?
Xu Haidong: It should be said that the production and sales of new energy vehicles in 2021 are indeed beyond expectations. At the beginning of 2021, we expect rapid growth, as we see a trend from the second half of 2020. So at the time we gave a figure of 1.8 million (40% incremental) sales.
Later, the consumer enthusiasm exceeded our expectations. There are several reasons: First, after 10 years of national strategy and national policies, especially after 2016, the quality of new energy vehicles has been greatly improved, and the price has been further reduced, and consumption has gradually reached the critical point of outbreak.
Second, enterprises unswervingly carry out new energy strategic transformation. In the early stages, it was difficult for new energy vehicles to make a profit. In terms of national strategy, it has pointed out the direction, although it is difficult for enterprises to make quick profits, but in the strategic direction of continuous investment, the development of new products, today's prosperous new energy vehicle market. We have seen that companies have experienced losses after the sharp decline in subsidies for new energy vehicles in 2019. Enterprises judge that they must high-end products to have a way out. Not only that, after Tesla entered the Chinese market, the Model 3 just opened up the market segment of more than 200,000. Driven by the Model 3, a number of new models came into being. After consumers finally accepted such a product, the market began to grow gradually.
Not only that, the biggest cost of new energy vehicles is the battery. According to the data, 80% of users will not commute more than 100 kilometers a day. Therefore, the company develops products with a cruising range of 100 km to 200 km in line with the idea of a good product that is enough. In this way, the cost of the battery can be well controlled, and the enterprise will not lose too much. Products like the Hongguang Mini EV quickly took over the market.
Third, after years of development, consumers have also gradually embraced electric vehicles. At the same time, the advantages of electric vehicles are gradually emerging. For example, charging is cheaper than refueling, driving is quiet, model design is getting more and more beautiful, and the concept of green consumption is gradually deeply rooted in the hearts of the people. In addition, with the advancement of technology, the phenomenon of fire in new energy vehicles has gradually decreased, and consumers' initial safety concerns have gradually been resolved. In short, automobile manufacturers provide the products needed by consumers, which is another basis for the rapid growth of new energy vehicle production and sales.
Fourth, it is due to the relatively complete infrastructure development of our new energy vehicles. At present, the vehicle-to-pile ratio of China's electric vehicles is about 3:1, which basically meets the demand. The state has also attached great importance to this aspect and has been investing.
We know that the market has entered a situation of production and marketing. The development of products goes through the gestation period, rapid growth period, maturity period and recession period in turn. After more than ten years of incubation, the penetration rate of more than 10% has entered a period of rapid growth. So in this period, it is really not very predictable. This year's forecast is around 5 million vehicles, a growth rate of 50%, and we don't think that number should be too much of a problem.
China Automotive Pictorial: China's automobile export growth this year is very significant, how do you think of the performance of automobile exports in 2021? What problems will we face in the export of automobiles?
Xu Haidong: There will be a significant increase in exports in 2021, which should be said to be the reason for the lack of supply caused by the global epidemic, and the lack of global automobile production caused by the shortage of chips. Cars produced in China have become an efficient supply of products.
If you look at the products themselves, the cars we export are also quite internationally competitive, especially our own brands. Their products are comparable to Hyundai or even Toyota at the same time, and the price is similar. It's a head-to-head competition.
In addition, the change in export patterns is more core. It turns out that China's automobile exports are more of a trade model. Now Chinese companies are starting to invest directly. The more prominent are SAIC, Great Wall and Geely. They have built factories in different countries to produce cars. For example, Thailand, India, Russia, Belarus and Pakistan.
We know that the model of direct investment is a longer-term model. This model can cultivate a local dealer system, build a Chinese brand, and integrate into the local society. We believe that Chinese auto companies are now starting to pay more attention to brand building. Only by creating a good user reputation can we win the local market.
In addition, the export of new energy vehicles in 2021 will also increase significantly, reaching about 330,000, an increase of 4 times. Half of them come from Tesla, which is produced in Shanghai. It should be emphasized that at the manufacturing level, China's new energy vehicle brand products and foreign-funded products have reached the same level. Our new energy vehicle exports can meet the corresponding international standards in terms of technical standards.
In the future, car exports may involve the "carbon boundary" issue. The EU will probably try to implement it around 2023. This requires that the product has a corresponding "carbon footprint" in the manufacturing process or in the parts, that is, the carbon emissions need to be traced. Customs of various countries impose carbon tariffs according to the amount of carbon emissions. At that time, Chinese companies will need to adapt to the corresponding regulations, and suppliers will also need to meet such standards.
China Automotive Pictorial: On December 27, 2021, the Ministry of Commerce issued the Special Administrative Measures for Foreign Investment Access (Negative List) (2021 Edition), which confirms that in the passenger car field, the restrictions on the number of joint venture partners and the restriction on the share ratio will be lifted on January 1, 2022. Will there be a corresponding change at the corporate level in 2022?
Xu Haidong: At present, the opening up of stocks is the general trend, which is in line with the requirements of China's new round of reform and opening up. I think the foreign parties in the joint venture also need to comprehensively assess the role of Chinese partners.
Second, both parties to the joint venture are contractually bound. The duration of the contract cannot be adjusted arbitrarily. Even if adjustments are needed in 2022, they will need to be agreed by both sides.
Third, foreign investment still needs to develop in China for a long time. Each business has its own plan. In fact, many foreign parties are not willing to leave their Chinese partners because they have local advantages. Of course, China must also think about how to reflect the value and play a role. So we don't think there will be many joint ventures that will change right away. Probably the first implementation is BMW Brilliance, and the preparations for both sides have been done, but they are waiting for the relevant policies.
Fourth, the NDRC also has some investment management measures. For example, restrictions on new production facilities for traditional models, utilization rates of new energy vehicle production facilities and other constraints.