21st Century Business Herald reporter Du Qiaomei Beijing reported that after three consecutive years of decline, China's auto market finally resumed positive growth in 2021.
Despite the repeated epidemics and uncertainties such as chip shortages, in 2021, mainland automobile production and sales reached 26.082 million units and 26.275 million units, respectively, up 3.4% and 3.8% year-on-year.
Among them, full-caliber passenger car sales in 2021 were 21.323 million units, up 6.2% year-on-year, but down 1.6% from 21.662 million units in 2019.
Thanks to the gradual recovery of China's automotive industry, the gross profit margin of new cars in automobile dealers will turn positive in 2021, and the operating conditions have improved.
On February 10, the "2021 National Dealer Survival Survey Report" released by the China Automobile Dealers Association showed that 70% of dealers completed more than 80% of the annual task indicators; the proportion of dealers who completed the annual sales target was 29.4%; from the perspective of profitability, the profitability of dealers rose to 53.8% in 2021, and the loss surface fell to 17.5%, compared with 2020, the profit side increased by nearly 15 percentage points, while the loss side fell by 16 percentage points.
In addition, although the inversion of dealer new car sales prices still exists, it is significantly better than in 2020. The proportion of dealers without price inversion increased by 2.9 percentage points to 29.4%, and the profit from dealer new car sales increased, from 1.3% in 2020 to 1.5%.
However, in 2022, under the influence of repeated epidemics and chip shortages, there may be insufficient support in the short-term market, and dealers are still facing risks such as insufficient market demand, reduced passenger flow, insufficient resource supply, and declining after-sales profits.
Market demand weakened and inventory levels picked up
According to the latest issue of the "China Auto Dealer Inventory Alert Index Survey" VIA (Vehicle Inventory Alert Index) released by the China Automobile Dealers Association, the inventory warning index of Chinese auto dealers in January 2022 was 58.3%, down 1.8 percentage points year-on-year and up 2.2 percentage points month-on-month, and the inventory warning index was above the boom-bust line.
The higher the inventory warning index, the lower the demand in the market, the greater the inventory pressure, and the greater the operational pressure and risk.
This also means that although the supply of cars has stabilized into 2022 and dealer inventory levels have rebounded, they have not yet returned to normal levels. The mismatch between supply and demand caused by low inventories still needs some time to adjust.
"From a data point of view, the inventory warning index in January this year is closer to the boom-bust line than in 2020 and the same period in 2021, but approaching the boom-bust line does not mean that the market has reached the ideal level." Qiu Kai, director of the Industrial Coordination Department of the China Automobile Dealers Association, said that from the feedback from dealers, compared with previous years, consumers' demand and enthusiasm for car purchases before the Spring Festival have weakened.
"On the one hand, in January 2021, the demand for car purchases after the epidemic was rapidly released, and the market as a whole continued the trend of recovering growth in 2020; at the same time, the impact of chip shortage in the same period last year was not fully revealed, so the sales of new cars reached 2.36 million units in January last year. On the other hand, this year's Spring Festival is earlier than in previous years, and some consumer demand has been released ahead of schedule in December last year; the repeated epidemic and chip shortage in January have affected the supply of tight models and dealer gathering. Qiu Kai further pointed out.
Judging from the sub-index situation, the inventory, market demand and average daily sales index in January fell sharply, and the overall demand and sales trend of the automobile market were weak.
"In January, dealers as a whole were in the stage of digesting inventory at the end of the year, so the inventory index was declining. From the perspective of market demand, in the first half of January, the overall demand for car purchase was relatively strong, which was manifested in an increase in the number of customers with limited mentions; in the second half of the month, near the Spring Festival, the demand gradually weakened. From the perspective of sales volume, consumer demand for existing cars increased in January, and there was a certain contradiction between supply and demand due to the shortage of dealers. Coupled with the impact of the epidemic on consumers entering stores and vehicle deliveries, the sales index declined in January. Qiu Kai said.
It is worth noting that in January 2022, the auto consumption index fell off a cliff and fell to 25.4, which is close to the lowest point in nearly three years. Among them, the demand sub-index in January 2022 is only 18.7.
Considering that some dealers continue to rush sales before the Spring Festival, and the actual sales volume converted into January of the reserved orders in December 2021, the China Automobile Dealers Association expects that the sales of full-caliber passenger cars in January 2022 will be the same as that in December last year, about 2.3 million units.
Insufficient market support, february sales expected to fall by 40% month-on-month
"After the peak season for car purchases in December last year and January this year, sales in February are likely to deteriorate, and the dealer inventory coefficient is expected to increase month-on-month next month." Qiu Kai expected.
During the Spring Festival, automobile sales activities were suspended, resulting in a decrease in the number of car sales days in February, affecting automobile sales; after the holiday, consumers returned to work one after another, from the holiday mode to the working mode, and the willingness to buy cars during this transition period was affected, and the demand release of the automobile consumer market was also affected.
At the same time, February is the traditional trough of automobile sales, low automobile sales, coupled with the recent epidemic sporadic sporadic, increased epidemic prevention and control efforts, and restrictions on the movement of people in some areas have inhibited automobile consumption.
According to the survey, more than 70% of dealers said that the market demand declined in February, mainly due to the demand for car purchases has been released before the holiday, the consumption power of demand after the holiday has declined, resulting in a decline in transaction volume, and due to the impact of the epidemic, the market demand recovery period is longer than usual.
The traditional sales off-season, the vacuum period after the Spring Festival, and the impact of the recurrence of the epidemic, the short-term market support is insufficient; coupled with the chip problem may last until the second half of this year to be fully resolved, the association expects full-caliber passenger car sales in February this year to be about 1.4 million units, down about 40% month-on-month.
However, with the gradual easing of the chip crisis and the listing of new products, dealers are generally optimistic about the annual sales scale in 2022, 90% of dealers believe that 2022 will maintain positive year-on-year growth, of which 40% of dealers believe that they can achieve more than 10% growth; only 10% of dealers believe that the overall sales will decline in 2022.