Author online car market Jin Chao
In 2021, China's automotive industry has been shrouded in "core famine" for a whole year, and this year is also a year in which natural disasters such as hurricanes, rainstorms and earthquakes have plagued the world. At the beginning of January, I came to the China Automobile Dealers Association, hoping to discover the new characteristics and future trends of the automotive industry through some phenomena in the current automobile circulation field.
To this end, I had a one-on-one communication with Mr. Shen Jinjun, president of the China Automobile Dealers Association.
Entering the industry in 1986, Shen Jinjun has experienced the rapid development of China's automotive industry in the past 35 years. He recalled that since 2012, China's auto industry has experienced the same characteristics as developed countries around the world, that is, "a successful transformation from a seller's market to a buyer's market."
"The buyer's market is undoubtedly more favorable for consumers; equally, full competition and a healthy supply chain system are also beneficial for car companies and dealers." All these signify that the Chinese auto market has matured. However, the global outbreak of the new crown epidemic in 2020 and the subsequent multi-point distribution of many "black swan" events at home and abroad in 2021, such as wind disasters and floods, have brought great difficulties to the automobile manufacturing industry that relies heavily on the supply chain system.
It is precisely because of the chip shortage that has lasted until the whole year of 2021 that the supply chain of the entire automotive industry has been deteriorating, making the performance of the Chinese auto market in 2021 extremely complicated.
Shen Jinjun concluded: In 2021, china's auto market has undergone a reverse change of "from buyer's market to seller's market" for the first time. The reverse change of "from buying to selling" reflects that the relationship between automobile manufacturers, dealers and consumers is no longer oversupply, nor is it a balance between supply and demand, but a shortage of supply.
In this context, there have also been two major changes in the automobile circulation industry. First, the profitability of dealership new car sales has generally improved, and the price of new car sales in the case of short supply has recovered significantly compared with the past. Many brands and dealers will not consider the means of terminal price to promote. Second, many good automotive products, good model configuration, a car is difficult to find, dealers have no car to sell the embarrassing situation.
"So we give such a 'reverse' judgment. In 2021, the automotive industry is generally in a state of 'understock'. There is less inventory, less pressure, and the financial costs on the dealer side are significantly reduced. But dealers are also very embarrassed, it seems that dealers' profitability has improved compared with previous years, but there is no car to sell, resulting in a sharp decrease in the number of new customers, and the emergence of 'black swans' has disrupted the rhythm of the circulation industry," Shen Jinjun said.
Dealers are a key node in the automotive industry and reflect the continuous changes in China's auto circulation industry. After making a judgment on the industry's reversal, Shen Jinjun also took stock with me about the overall performance of the Chinese auto market in recent years. "From negative growth in 2018-2020 to positive growth in 2021, we have judged that this is a 'cyclical' decline and growth. But looking back at the 2021 data, we find that the decline before 2021 is likely to be a 'trend' decline."
According to the data released by the Ministry of Finance, new car sales in 2018, 2019 and 2020 have been negative for three consecutive years, and by 2021, the overall new car sales in January-December have shown a very good recovery growth, achieving a reversal of the decline in the broader market. However, when subdivided into months, the second quarter of 2021 began to decline month-on-month with 2020. Among them, the decline in traditional fuel vehicles is obvious, while the growth of new energy vehicles shows that it makes up for the decline in fuel vehicles, and additionally contributes to the increase from negative to positive in 2021.
Therefore, from the perspective of the circulation association, Shen Jinjun also further made such a prediction: "The delivery volume of new cars in the Chinese automobile market may not have peaked, but traditional fuel vehicles have peaked." In the future, new energy vehicles will contribute considerable increments to show a high-speed growth trend, and continue to inject vitality into China's auto market."
In addition, compared with new car sales, the national used car transaction achieved a 22% year-on-year increase in 2021, and the transaction volume reached 17.58 million units, basically achieving a 1:1 transaction between new cars and used cars. However, compared with the annual transaction volume of more than 40 million used cars in the United States and the proportion of new car sales of 17.5 million units at the peak, there is still a lot of room for development in China's used car circulation.
Judging from the data on the number of motor vehicles filed by the Ministry of Public Security, the number of motor vehicles in the country has exceeded 300 million, and China has surpassed the United States to become the country with the largest number of motor vehicles in the world. "With the huge ownership as the basis, as well as the landing of the corresponding second-hand car policy in 2022 and the consensus of the industry, the future use of second-hand car activity is higher than that of new cars to achieve the pull of new car sales, which will surely become one of the more risk-resistant and more mature and healthy features of China's automotive industry," Shen Jinjun said.
There is such a saying in The Chinese dealer circle that "there is something to find a family member", and the "family member" in their mouth is the China Automobile Circulation Industry Association. As the president of the China Automobile Dealers Association, most of the very friends in the automobile circle are familiar with this "old Shen". What role does the China Automobile Dealers Association play between OEMs and dealers? Shen Jinjun does not recognize the existence of industry associations as an "intermediary", he believes that the automobile circulation association represents the interests of the entire automobile circulation industry, and more specifically, the interests of dealers.
"A car brand is not only owned by manufacturers, dealers also play an important role in cultivating a good brand image, and they are also providing services for their respective car brands." From 2012 to the present, the transition from the seller's market to the buyer's market has brought some changes to the relationship between manufacturers and dealers, and some contradictions under the seller's market in the past have been highlighted in recent years. ”
In the past few years, whether it is a head brand car company, a mainstream joint venture car company or a Chinese brand car company, there has been a contradiction between factory and business to a greater or lesser extent. The China Automobile Dealers Association has organized a number of automobile brand dealer associations, which have always maintained direct communication with automobile manufacturers. In this regard, Shen Jinjun stressed: "In the face of crisis to resolve the contradiction in time, the association has created a communication platform to achieve harmony and win-win, we all believe that there is no problem that cannot be solved, which is also the mission of the association."