The past 2021 is destined to be an extraordinary year, the recurrence of the new crown pneumonia epidemic, the crisis of the automotive supply chain caused by the "lack of core", and the acceleration of the global goal of carbon neutrality, all highlight that 2021 is a year of change, but also a difficult and energetic year for the automotive industry. What remains unchanged is that during the year, China remains the most important and largest single market in the global automotive industry. Entering 2022, the automotive industry has also opened a new chapter. Looking forward to the new year, what kind of development momentum will the automotive industry show towards the stage of high-quality development? What are the new changes and trends in each market segment? What new challenges will industrial transformation and upgrading face?
On January 12 this year, the Ministry of Industry and Information Technology held a press conference to introduce the development of the automobile industry in 2021, pointing out that last year, the production and sales of mainland automobiles were 26.082 million units and 26.275 million vehicles, an increase of 3.4% and 3.8% respectively year-on-year, ending the downward trend of 3 consecutive years since 2018, and contributing to the sustained recovery and development of the mainland's industrial economy and stable macroeconomic growth.
On the one hand, independent brands are rising strongly in the market. Driven by the recovery of the international market and the improvement of the competitiveness of Chinese brands, China's automobile exports have performed well, and since April 2021, they have repeatedly set new historical records, and the annual export volume has exceeded the 2 million vehicle mark for the first time. However, Chinese brand cars are affected by the positive factors of the new energy market and overseas markets, which directly bring about a significant sales pull, and the market share has increased to 44%, close to the best level in history. At the same time, the road to high-end independent brands has achieved remarkable results, and a larger market space has yet to be tapped.
On the other hand, new energy vehicles have become a new increment to drive the recovery of the car market, and have formed a partial substitution effect on the fuel vehicle market. In 2021, the annual sales volume exceeded 3.5 million vehicles, and the market share increased to 13.4%, further indicating that the new energy vehicle market has shifted from the previous policy-driven to self-reliant market pull, and the natural law of survival of the fittest will also apply to new energy vehicles.
It is worth mentioning that the luxury car market is still performing solidly. Under the general trend of consumption upgrading, luxury cars known for their sense of quality have been more favored by the consumer market, and luxury brands have accelerated their electrification offensive in the Chinese market, adding more variables to the future market development.
Previously, in the domestic auto market, joint venture brands often occupied the dominant position in market development. Joint venture brands play an important role in the establishment of the market position of the sedan, the introduction of SUV models, and the homeization of MPV models. At that time, due to the leading technical level, the top of the sales list of various domestic market segments were divided by joint venture brands, and the independent brands in the early stage of development were somewhat lonely. Looking back at the past year, the haze of the epidemic and lack of cores lingered, chips directly restricted production, and the rising cost of supply chains has become an unspeakable pain for multinational car companies. It is gratifying that as independent brands begin to shift the focus of development to the field of technology research and development, the market competitiveness of independent brand models has been greatly improved.
According to data from the China Association of Automobile Manufacturers, the market share of self-owned brand cars has exceeded 44% in 2021, close to the best level in history. At the same time, the market share of Ashkenazi and Japanese brands has declined year-on-year, and it is currently 20.6%.
Multinational car companies are mixed in 2021. Volkswagen's announcement shows that 3.3 million vehicles will be delivered in China in 2021, down 14% year-on-year. Adding to the global giant's embarrassment, global deliveries fell 405 percent to 8.88 million units, the lowest since 2011, as "despite strong orders, shortages of parts hit production." Supply chain bottlenecks have made large multinational car companies more constrained. In the second quarter of last year, FAW-Volkswagen, on the basis of the shortage of ESP chips and the reduction of production by 20,000 vehicles, also affected the production of 29 models due to the shortage of 10 kinds of chip resources, resulting in a production reduction of up to 30% in the second quarter. In order to ensure the production and delivery of new car orders, many car companies choose to allocate chips to lucrative high-end models, or temporarily "reduce the allocation" of some new cars. In stark contrast, BYD, which is self-sufficient in chips, has kept up with production, which is also the main reason for the strong growth.
On the one hand, multinational car companies are facing "lack of core" and striving to maintain production capacity for development, on the other hand, their own brands are triumphantly advancing in the spring breeze. The top three automobile companies in the automobile sales ranking released by the China Automobile Association, SAIC, FAW and Dongfeng all experienced a year-on-year decline in sales. In 2021, the sales of enterprises that rely more on joint venture models generally declined, local enterprises such as Changan and GAC that have made more efforts in independent brands and new energy in recent years have shown growth momentum, while private enterprises such as BYD and Great Wall have achieved substantial sales growth. In the past year, independent brands have adopted more flexible supply chain control measures to seize the opportunity to open up product sales, while the output of joint ventures is greatly affected by the overall supply chain system of multinational companies. Under the influence of multiple positive factors such as the suspension of chip shortage, the promotion impulse at the end of the year, and the development of new energy, multinational car companies in the Chinese market also have the power to fight back, who retreats and who enters, how to evolve between the head enterprise and the tail end of the echelon, and the dispute between independent brands and multinational car companies will become more and more exciting.
Under the overall stable production and sales environment of the mainland automobile market, as a key support industry in recent years, the new energy automobile industry has ushered in a high-light moment of blossoming in 2021. According to data from the China Association of Automobile Manufacturers (hereinafter referred to as "CAAM"), the production and sales of new energy vehicles in 2021 reached 3.545 million units and 3.521 million units, respectively, an increase of 1.6 times year-on-year, ranking first in the world for 7 consecutive years, and the market share reached 13.4%, 8 percentage points higher than that of the previous year.
The trend of new energy vehicles and traditional fuel vehicles has formed a strong differentiation characteristics, new energy vehicles have produced a partial substitution effect on the fuel vehicle market, and through the user's market-oriented choice, it proves that consumer demand is changing, driving the car market to accelerate the pace of transformation to new energy.
Tesla has achieved 320743 delivery results in the whole year of the past year. The new car-making force "Wei Xiaoli" also handed over a satisfactory report card: in 2021, the total delivery volume of Xiaopeng Automobile reached 98,155 units, an increase of 275.2% year-on-year; ideal cars delivered a total of 90,491 vehicles in 2021, an increase of 177.4% over 2020; NIO delivered 91,429 new cars in 2021, an increase of 109.1% year-on-year.
Why can new energy vehicles grow against the trend in the context of the overall decline of the automobile market? It is precisely because of the "new four modernization" trend of automobiles that has emerged in the Chinese market. Consumers' demand for intelligence and electrification is constantly improving, and new energy vehicles are constantly breaking through with independent innovation technology, and continue to exert efforts in intelligence, brand marketing, channel construction, etc., strengthening brand image, deepening user stickiness, and meeting consumers' deep-seated car needs with strong product strength.
At the same time, in the past year, the mainland automobile industry has "deeply implemented the "New Energy Vehicle Industry Development Plan (2021-2035)", continued to carry out new energy vehicles to the countryside, launched the pilot application of the power exchange mode, optimized and adjusted the 'double integral' policy, launched the demonstration application of fuel cell vehicles, and promoted the improvement of the level of electrification in the public sector." Therefore, at the time when the subsidies for new energy vehicles continue to decline, there is no doubt that the high growth of the new energy vehicle market fully demonstrates that this market has changed from the initial policy drive to the market drive. In the future, new energy vehicle companies will not only face the challenges of supply chains such as chip shortages and raw material price increases, but also need to balance the relationship between high-cost expansion and cost pressure, continue to expand sales scale, and face the continuous competition of traditional car companies. The market competition of "real knives and real guns" has officially begun.
In the past 2021, the word "missing core" ran through the whole year, coupled with the multi-point distribution of the new crown pneumonia epidemic, many car companies were difficult to maintain a normal production beat, production and marketing targets were forced to decrease, and many consumers were also faced with the situation that they could not pick up the car in time, and hunger marketing did not seek to come by itself. And according to statistics, the average price of traditional fuel passenger cars in 2021 is 156,000 yuan, about 10,000 yuan higher than the same period last year. Among them, there are both reasons for consumption upgrading and a slight relationship with the increase in the price of raw materials.
The three major factors of lack of cores, the epidemic and the increase in raw material prices will continue to affect the automotive industry in 2022. In addition, there are some unfavorable factors as follows: the downward pressure on GDP has increased, the real estate market has decelerated sharply, the economic structure has been transformed and upgraded, the restrictions on the shareholding ratio of Sino-foreign joint venture passenger car enterprises have been lifted, the epidemic in foreign countries has affected the supply chain, and the international political situation has been unstable due to the deterioration of the foreign trade environment. Therefore, the statement that "the overall automobile market will show a moderate growth trend in 2022" is still relatively reliable. The sharp rise and fall are not in line with the theme and task of the deep adjustment of the domestic economic structure, nor are they in line with the overall economic trend, but overall the pressure for growth is slightly greater.
In 2021, the commercial vehicle market has risen and fallen dramatically, and the market trend throughout the year is like riding a roller coaster. In the first half of the year, the market was very prosperous under the strong pull of factors such as the switching of National VI emission standards, the control of excess control limits, and the large number of infrastructure projects in the 14th Five-Year Plan. In the second half of the year, after the consumption potential was rapidly overdrawn, sales fell by 30% or 40%. Chinese brand commercial vehicles have always been aimed at "making money", and in the past they have always pursued the ability to save money in vehicles such as pulling more, running faster, lower fuel consumption, and overhauling mileage. Now it is different, and like passenger cars, commercial vehicles have also embarked on the road of consumption upgrading, and have begun to pay more attention to driving comfort, convenience and safety.
In fact, the industry generally continues to be optimistic about the passenger car market, believing that its growth rate will be higher than that of the car market as a whole. In 2021, the new energy passenger car market has blown up for a whole year, and the cumulative sales have exceeded the 3 million mark, an increase of about 1.7 times year-on-year, setting a milestone. It is expected that in 2022, especially in the second half of the year, new models of new energy passenger cars will be listed on the market, the price will continue to decline, and the cumulative sales volume for the whole year is expected to approach 5 million units, an increase of more than 50% year-on-year. Like 2021, new energy vehicles will still be the highest and brightest stars in 2022, and the acceptance and recognition of new energy vehicles by the Chinese people will be further improved. This strong momentum of development will surely encourage all kinds of capital to invest in the construction of charging infrastructure, and it will be more conducive to the promotion of new energy vehicles. In 2022, major Chinese brand passenger car companies will use the strong momentum gained in the new energy vehicle market to launch a collective charge against the high-end luxury car market. But at the same time, foreign brands will also launch a collective charge in China's new energy vehicle market. Competition is intensifying, and Chinese brands will be under unprecedented pressure in terms of quality and reliability. In addition, in the hybrid vehicle market, Chinese and foreign brands will also usher in a scuffle.
In particular, the Regional Comprehensive Economic Partnership (RCEP), which comes into effect on New Year's Day 2022, will greatly promote the export of Chinese brand cars. At the same time, RCEP will also promote the rapid growth of imports of complete vehicles and auto parts, and the market pressure on domestic parts and components companies is much greater than that of vehicle companies. This is the second biggest impact on China's auto parts industry after the restrictions on the joint venture share ratio were first relaxed.
Judging from the summary of experience, new energy vehicles are undoubtedly the main line of development that runs through the development of the automobile industry throughout the year, and there is no doubt that it will be the main line of development in many years to come. In the fiercely competitive Chinese market, the top car companies are not necessarily absolutely safe, and the car companies in the middle and lower reaches of the list are not all without opportunities. From the perspective of sales pull, the sooner the car companies grasp the transformation trend of electrification and intelligence, gain insight into market demand, and provide consumers with more diversified choices, they can occupy a certain opportunity in development.
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