Passenger Car Association: Retail sales of narrow passenger cars expected to reach 2.050 million units in January, down 6.2% y/y

Zhitong Finance APP was informed that according to the public account of the Association of Automobile Associations, with the gradual strengthening of production and batch sales in the past few months, the overall market supply has shown a warming trend, and manufacturers have actively welcomed the New Year's "opening red". The recurrence of the new crown epidemic has promoted the local New Year in many places, but the volume is generally lower than last year, and the increase in pre-holiday promotion efforts has also boosted the tide of homecoming car purchases. In terms of the new energy market, due to the impact of centralized delivery at the end of last year, sales in early January were weak, but there was a significant recovery in the second and third weeks, and it is expected to maintain a triple-digit year-on-year increase by the end of the month. Under the intertwining of multiple factors, the market is expected to rebound steadily in January, and the negative growth rate of the year-on-year is smaller than that of the previous month. Retail sales of passenger cars in the narrow sense are expected to be 2.050 million units in January, down 6.2% year-on-year, negative year-on-year growth, narrowing from the previous month, and the automotive market has steadily recovered.

2021 Market Review:

In the first half of 2021, the economic recovery exceeded expectations, and in the second half of the year, affected by factors such as repeated epidemics, extreme weather and dual control of energy consumption, the economic growth rate slowed down, and the automobile market was also constrained by the shortage of chip supply, and the year-on-year growth rate showed a trend of high and low. In December, the retail sales of narrow passenger cars of the Association of Passenger Vehicles totaled 2.105 million units, down 7.9% year-on-year, and retail sales for the whole year reached 20.146 million units, up 4.4% year-on-year. Stimulated by the decline of new energy subsidies, manufacturers promoted ordering and delivery before the end of the year, and promoted the sales volume of the new energy market to reach a new high during the year, with retail sales of 475,000 units in December, a sharp increase of 128.9% year-on-year, and the market penetration rate reached 22.6%. In 2021, the acceptance of the new energy market has steadily increased, and the annual retail sales reached 2.989 million units, an increase of 169.1% year-on-year, and the penetration rate was 14.8%.

Market resilience remains in January:

With the gradual strengthening of production and batch sales in the past few months, the overall market supply has shown a warming trend, and manufacturers have actively welcomed the "opening red" of the New Year. The recurrence of the new crown epidemic has promoted the local New Year in many places, but the volume is generally lower than last year, and the increase in pre-holiday promotion efforts has also boosted the tide of homecoming car purchases. In terms of the new energy market, due to the impact of centralized delivery at the end of last year, sales in early January were weak, but there was a significant recovery in the second and third weeks, and it is expected to maintain a triple-digit year-on-year increase by the end of the month. Under the intertwining of multiple factors, the market is expected to rebound steadily in January, and the negative growth rate of the year-on-year is smaller than that of the previous month.

1. Manufacturer sales trends

The terminal price monitoring results show that the overall market discount rate of passenger cars in mid-January was about 11.4%, which remained stable compared with the end of last month, and the price remained at a high level, of which luxury brands were alleviated due to supply problems, and the market price fell further. According to the November retail target survey, more than 80% of the manufacturers in the overall market had a negative year-on-year growth of about 7%, and the preliminary estimate was that the narrow passenger car retail market this month was about 2.050 million units, down about 6.2% year-on-year.

2. Weekly trend calculation

The average daily growth rate of the first and second weeks of retail sales of major manufacturers was 6% and -2% respectively, and the cumulative increase was 2% year-on-year, mainly affected by the impact of the epidemic in various places, and the improvement of the supply side was relatively limited. The market continued its steady trend in the third week and is expected to be around -3% year-on-year. The strength of the impulse at the end of the fourth week will be less than in previous years due to supply constraints, and one working day less than last year, and the average daily sales volume is expected to be -15% year-on-year. It is estimated that retail sales in January will reach 2.05 million units.

3. Smooth transition of the auto market in January

In 2021, the total retail sales of consumer goods increased by 12.5% year-on-year, and automotive consumer goods increased by 7.6% year-on-year due to more serious supply-side constraints. Under the pressure of internal and external prevention and control brought about by the mutation of the virus, the service industry has shown resilience, and the national service industry production index in 2021 has increased by 13.1% year-on-year and an average growth of 6.0% in two years, and the overall domestic economy has remained stable. The direction and method of the automobile industry policy have remained unchanged, and the intensity and scope are still the same as before. The Spring Festival in 2022 is earlier than in previous years, and with the frequent occurrence of local epidemics, various localities still advocate local New Year' Celebrations, but the volume is lower than last year, which is good for the tide of returning to the hometown to buy cars.

According to the latest survey results of the China Automobile Dealers Association, the comprehensive inventory coefficient of automobile dealers in December was 1.43, up 5.9% month-on-month, and the inventory level further recovered, and we expect chip supply to return to normal levels in the second half of the year. Affected by the centralized delivery at the end of last year, the new energy market in January fell month-on-month, but under the background of the transformation of the automotive industry with the goal of "carbon peaking and carbon neutrality", it is expected that the new energy market will continue to grow this year and consumer acceptance will further increase. Recently, Tesla, Weilai, Xiaopeng, BYD and other new energy head manufacturers have increased the terminal transaction price on the grounds of subsidy adjustment, and the impact on new energy sales still needs to be further observed.

In summary, the retail sales of narrow passenger cars in January are expected to be 2.050 million units, down 6.2% year-on-year, and the negative year-on-year growth rate is smaller than that of the previous month, and the automobile market has steadily recovered.