The auto market was generally stable in January, with supply stabilizing and dealer inventory levels picking up, down slightly 1.8% to 58.3% year-on-year. Looking back on the past year, despite the challenges, 53.8% of dealers have achieved profitability, the highest proportion in the past four years.
In terms of used cars, dealers' earnings also improved slightly, with gross margins rising from 5.1% to 8.5%. In 2021, the national used car trading volume was 17.5851 million units, an increase of 22.62% year-on-year and an increase of 17.84% over 2019. Overall, the used car market will continue to prosper, with transaction volume expected to exceed 19 million units in 2022, an increase of about 9% year-on-year.
The China Automobile Dealers Association recently released data showing that the overall automobile market was stable in January, the supply tended to be stable, and the inventory level of dealers rebounded, a slight decline of 1.8% to 58.3% year-on-year. Considering that some dealers rushed sales before the Spring Festival, and the actual sales of orders reserved last month were converted into January, passenger car sales in January are expected to be the same as in December last year, with about 2.3 million units; In February, the traditional sales off-season, sales are expected to be about 1.4 million units, down 40% month-on-month.
Looking back on the past year, the supply of chips has continued to be tight, products are "in short supply", and the overall preferential range and price discount of the automobile market have been significantly narrowed, which objectively helped dealers digest inventory, which also greatly promoted the profitability of dealers.
In 2021, despite the challenges, 53.8% of dealers achieved profitability, the highest proportion in the past four years. Among them, luxury/imported brands ride the dust, and profitable dealers account for up to 77.9%; The proportion of profitability of independent brands is the lowest, only 42.1%. However, the circulation association said that the data of independent brands is mainly affected by marginal enterprises, and the leading enterprises such as Geely, Changan and BYD have very good profit performance.
From the perspective of profit structure, after-sales and financial insurance are still the main sources of profit for dealers. In 2021, dealers' after-sales profits accounted for 51.3%, and financial insurance accounted for 19.6%. In addition, due to the "tight demand" of products, the profit from dealer new car sales increased sharply by 8.7 percentage points year-on-year to 12.9%, exceeding expectations.
According to reports, the increase in the proportion of new car sales profits is mainly driven by luxury/import and independent brands, which account for 19.5% and 16.1% respectively, which are higher than the average. In contrast, the joint venture brand is only 5.8%, indicating that the profit margin of the joint venture brand in the new car sales link is seriously squeezed.
It is worth noting that in 2021, the profitability of dealer used car business has increased slightly, and the gross profit margin has risen from 5.1% to 8.5%. The circulation association said that the impact of the policy and the gradual attention of dealers and manufacturers are the main reasons for the increase in the gross profit margin of second-hand cars.
In terms of policy, the tax reduction of second-hand car distribution and inter-provincial communication office have effectively solved the problems of high transaction costs, long cycles and inconveniences in different places. The data shows that in 2021, the national second-hand car trading volume was 17.5851 million units, a substantial increase of 22.62% year-on-year, an increase of 17.84% over 2019.
Focus on January this year, the used car source showed a seasonal contraction, the decline rate of about 8%; At the same time, the new year's market also leads to the need to re-evaluate the age of the car, and the age of the car only recognizes the "year" and does not recognize the "month" is the industry practice. Based on the above factors, the volume of used car transactions decreased relatively in January.
However, with the extension of the delivery cycle of the new car market, the price increase trend of second-hand cars is still continuing, and the retention rate of used cars at all levels has generally increased. As a hot area at present, the retention rate of new energy vehicles has also increased significantly, and the macro factors of price increase are mainly the improvement of ownership, recognition and use experience.
According to the data, by the end of 2021, the scale of charging facilities nationwide will reach 2.617 million units, with 1298 replacement power stations, serving nearly 8 million new energy vehicles, providing strong support for the development of the mainland new energy vehicle industry. With the continuous improvement and maturity of the new energy vehicle market, products have gradually moved towards the mainstream, and the proportion of second-hand new energy vehicles of more than 80,000 yuan in 2021 has increased significantly year-on-year.
Overall, the mainland used car market will continue to prosper. The circulation association said that 4 to 6 years is a regular car replacement cycle, and the new cars purchased in 2016 have basically entered the active period of car replacement, while the domestic new car sales for three consecutive years from 2016 to 2018 exceeded 28 million. Therefore, from the perspective of ownership, market laws and policy levels, the second-hand car trading volume from 2022 to 2024 will enter a new active period. It is expected that the volume of used car transactions will exceed 19 million units in 2022, an increase of about 9% year-on-year. (China Economic Network reporter Chen Mengyu)