On February 14, the latest sales data released by the National Passenger Car Market Information Association (hereinafter referred to as the "Passenger Car Association") shows that in January 2022, the retail sales of the passenger car market were 2.092 million units, down 4.4% year-on-year.
"Down 4.4% year-on-year and only 0.6% month-on-month, it seems to us to be more than expected." Cui Dongshu, secretary general of the Association, said that due to the Spring Festival holiday, production and sales began on January 26 in a semi-stop state, and the market only fell slightly, far below the previously estimated loss of production and sales of 15%.
Source: Multiplying Association
Domestic sales declined, but exports rose sharply by 91% in January to 169,000 units, which also brought overall sales of 2.261 million units in the month, a difference of nearly 100,000 units from the wholesale sales of 2.17 million units, meaning that the inventory of the automotive industry fell by 100,000 units in January. "The retail boom has brought a good market response."
Everything is good in the market, but the impact of chip shortages continues. Since 2022, many car companies have struggled to overcome the pressure of parts shortage, and have had to increase product prices, and new energy vehicles with the largest amount of chips have become the hardest hit areas for price increases. At present, some car companies such as BYD, SAIC R Automobile and SAIC-GM-Wuling have raised the price of new energy models.
Tesla CEO Elon Musk admitted that 2022 is still plagued by a shortage of parts supply, and Bosch CEO Stefan Hartung expects that the chip shortage will be significantly alleviated in the second half of this year, and normal production capacity will be restored in 2023.
The demand side continues to be strong, the supply chain is tight but there is no solution for the time being, can new energy vehicles break through 5 million sales as expected in 2022? How many car companies will be forced to join the army of price increases?
Independent rise, joint venture decline
One of the things that is worth noting about january sales is that the sales performance of the independent and joint ventures has diverged.
In January, self-owned brand retail sales reached 940,000 units, up 11% year-on-year and 1% month-on-month. The domestic retail share of independent brands was 45.5%, an increase of 6.4 percentage points year-on-year, compared with the 41% share in 2021, an increase of 4.5 percentage points. The territory of independent brands is constantly expanding.
Many independent car companies ushered in a good start, with a growth rate of up to two or even three digits.
At the end of January, Hongqi and Dongfeng Fengshen released their January report cards, with Hongqi's sales up 30% year-on-year to 42,000 units, and Dongfeng Fengshen's sales of 97% year-on-year to 19,000 units, a record high. After Dongfeng Fengshen launched the Yixuan GS, Yixuan MAX and other models last year, it gradually began to rebound, and the current growth trend is still continuing.
SAIC's own brand camp sales also rose to varying degrees, with SAIC passenger cars up 18% year-on-year to 68,000 units, SAIC Roewe up 20% to 42,000 units, and SAIC Maxus up 45% year-on-year to 18,000 units.
In January, Great Wall Motor sold 139,000 new vehicles, an increase of 73% year-on-year, of which the Haval brand increased by 61% year-on-year to 94,000 units, and the Haval H6 sold 46,000 units in a single month, up 76% year-on-year, winning the SUV sales championship for the 92nd time. During the same period, Changan Automobile's self-owned brand sales increased by 12.59% y/y to 226,000 units. Geely Automobile, on the other hand, saw a 6% year-on-year decline, with officials saying it was mainly affected by the early Spring Festival holiday and sporadic epidemics in various places, with sales of 146,000 units in January.
Source: Great Wall Motors
While most of the independent brands rose, the sales of joint venture brands suffered Waterloo in January. Even Japanese brands, which have always been strong in hardiness, have also experienced a rare decline, of which Honda China's total sales volume was 146,600 units, down 6.9% year-on-year, and Nissan's terminal sales in China reached 133,500 units, down 8.7% year-on-year. Mazda's sales in China remained in decline, down 7% y/y to 19,000 units.
As the leader of Japanese brands, Toyota fell by double digits. In January, GAC Toyota sold 99,900 units, up 11.25% year-on-year, while FAW Toyota dragged its feet and sold only 51,700 units in January, down 37.7% year-on-year.
Cui Dongshu said that the decline in mainstream joint venture brand retail sales is mainly due to the shutdown of factories in local areas due to the epidemic factory, and the production capacity has affected the terminal market. Take FAW Toyota, for example, after the Financial Associated Press reported that Toyota's Tianjin plant was shut down from January 10 to 21. The plant mainly produces the main hot models such as the Corolla, the Asian Dragon, and the Crown Land Amplifier.
This has also led to a further reduction in the share of joint venture brands. Mainstream joint venture brand retail sales of 860,000 units in January, down 17% year-on-year and 7% month-on-month. Among them, the retail share of Japanese brands fell by 2.2 percentage points to 19.2%, the share of German brands was 23.5%, down 2.3 percentage points, and the market share of the United States was 8.2%, down 1.2 percentage points year-on-year. At the same time, luxury car retail sales were 290,000 units, down 5% year-on-year.
The price increase of new energy vehicles did not affect sales
New energy vehicles are still the main force in sales. According to the Association of Passenger Vehicles, the wholesale volume of new energy passenger vehicles reached 411,000 units in January, an increase of 141.4% year-on-year, and retail sales reached 347,000 units, an increase of 132% year-on-year. Among them, the wholesale sales of pure electric vehicles were 333,000 units, an increase of 130.4% year-on-year; plug-in hybrid sales were 79,000 units, an increase of 202.1% year-on-year.
Specific to car companies, Tesla's wholesale sales in China are 59,845 (including 40,499 exports), SAIC-GM-Wuling 40,007, Chery Automobile is 21,179, and North-South Volkswagen's wholesale new energy vehicles are 13,661, accounting for 59% of the mainstream joint venture brand.
As early as the Spring Festival, the new force car companies could not wait to release the January report card, Xiaopeng Automobile delivered 115% year-on-year to 12,900 units; Ideal Automobile followed, delivery reached 12,300 units, an increase of 128.1% year-on-year; Nezha Automobile once again ranked among the top three, delivering 11,000 vehicles, a year-on-year increase of 402%.
In terms of traditional car companies, BYD, which has become the main force of new energy vehicles, played a stable role, selling 95,000 vehicles in January, an increase of 126.1% year-on-year and 0.11% month-on-month. Among them, EV models sold 46,400 units, an increase of 220.7% year-on-year. GAC Aean also tasted the sweetness of new energy, with sales of 16,000 units in January, an increase of 117.93% year-on-year, under the GAC Group, GAC Aean has become the brand with the highest growth rate.
While the sales of new energy vehicles are increasing, the penetration rate is also rising. The wholesale penetration rate of new energy vehicle manufacturers reached 19% in January, an increase of 10 percentage points compared with 8.4% in January 2021. In the new energy vehicle market, independent brands have a lot of right to speak. In January, the penetration rate of independent brands reached 32%, of which the penetration rate of luxury brands was 22.9%, and the penetration rate of mainstream joint venture brands was only 2.7%.
Entering 2022, the new energy vehicle market still has great potential. Cui Dongshu, secretary general of the Association of Passenger Vehicles, once said that the original sales of new energy passenger vehicles in 2022 were expected to be 4.8 million, and should now be adjusted to more than 5.5 million, and the sales of new energy vehicles in 2022 are expected to exceed 6 million, and the penetration rate will reach about 22%. The China Automobile Association also predicts that in 2022, the sales of new energy vehicles will increase by 47% year-on-year to 5 million units.
New energy vehicles have gradually shifted to market-driven, and from the current policy orientation, subsidies will be completely withdrawn in 2022. According to the relevant documents jointly issued by the Ministry of Finance, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, and the National Development and Reform Commission, the subsidy standard for new energy vehicles in 2022 will be reduced by 30% on the basis of 2021, and vehicles licensed after December 31, 2022 will no longer be subsidized.
Although the subsidy decline has been brewing for a long time, many people still express concern about this matter. A joint venture brand 4S store sales staff believes that at present, new energy vehicles are far from competing with fuel vehicles, and many customers' first choice is still fuel vehicles. "Without subsidies, it will be more difficult for us to convince them that it will be more difficult to buy new energy vehicles."
Not long ago, Feng Xingya, general manager of GAC Group, called for the introduction of a (new) subsidy policy as soon as possible, in view of the market and consumer demand, continue the comprehensive subsidy for new energy vehicles, and accurately set subsidy standards for qualified models. "It is proposed to extend the subsidy policy until 2025."
Subsidy slides superimposed on factors such as raw material prices have led to a collective increase in the price of new energy vehicles, and many car companies have raised the price of vehicles. However, in Cui Dongshu's view, although new energy vehicle companies are facing cost pressure, car companies have the ability to resolve, and the slight price increase of new energy vehicles will not affect the increase in terminal sales.
Cui Dongshu said frankly that the current new energy vehicle market has entered the marketization stage, but it has not completely got rid of subsidies. In this context, Cui Dongshu believes that it is also very important to promote the consumption of traditional fuel vehicles in 2022.
"At present, China's new energy vehicle market is growing rapidly, and the traditional fuel vehicle market continues to decline rapidly, which is not conducive to the steady and sustained growth of the automobile market." Cui Dongshu said that the price of some consumers when buying fuel vehicles is still the first consideration, and the price of A-class cars in independent brand fuel vehicles is concentrated in the range below 80,000 yuan, and encouraging family consumption of fuel vehicles is still of positive significance at this stage.
Author | Qin Zhangyong
Edit | Li Huanhuan