(Text/Pan Yuchen Editor/Lou Bing) "In the next 3-5 years, 80% of China's fuel vehicle brands will be 'shut down and turned'. During the 2022 China Electric Vehicle 100 Conference held on March 25-27, The remarks of Zhu Huarong, chairman of Changan Automobile, triggered a heated discussion in public opinion.
Zhu Huarong said that in the past 2021, there are still 85 brands in the traditional fuel vehicle market, of which 34 brands have monthly sales of less than 1,000 vehicles, and 9 brands have disappeared. In his view, this is due to the accelerated development of new energy vehicles, the competition in the fuel vehicle market has become more intense.
Zhu Huarong also introduced Changan Automobile's electrification strategy, saying that it plans to achieve sales of 1.05 million new energy vehicles by 2025, accounting for 35% of new car sales; by 2030, it will sell 2.7 million units, accounting for 60% of the total.
Judging from the data disclosed by third-party institutions such as the Association of Automobile Manufacturers, the difference in production and sales between automobile manufacturers is obvious. In 2021, of the 86 car companies with sales included in the statistics of the Association, 29 sold less than 10,000 vehicles.
At the same time, the overcapacity phenomenon of the mainland automobile industry is still relatively serious. According to the data previously disclosed by the Association of Passenger Vehicles, by the end of 2021, the total production capacity of passenger cars in the country will be 40.89 million, and the capacity utilization rate will be less than 53%, which is in the range of serious excess.
Among them, the total production capacity of 86 enterprises with sales volume is 37.038 million vehicles, but only 29 have a capacity utilization rate of more than 60%, which is equivalent to the number of enterprises with an utilization rate of less than 10%, the overall capacity utilization rate is less than 58%, and the annual production capacity of 3.85 million vehicles is completely idle.
The Association pointed out that the fundamental reason for the decline in the capacity utilization rate of car companies is that sales continue to decrease. However, even in the case of overall overcapacity, there are still 10.46 million vehicles under construction among qualified car companies that will be put into production.
Among the 29 car companies with annual sales of less than 10,000 vehicles, their sales volume is less than 0.5% of the total, but the production capacity accounts for 13% of the total, and the average capacity utilization rate is only 2%. As Zhu Huarong said, the only option for these seriously overcapacity enterprises is to stop production lines, gradually disappear from the market and even declare bankruptcy.
Although Zhu Huarong said that the demise of some fuel vehicle brands was caused by the rise of new energy vehicles, the Association also issued a warning that the sales volume of new energy passenger vehicles in 2021 was 3.326 million units, but the production capacity of new energy passenger cars has reached 5.695 million units, and the capacity utilization rate of new energy vehicles is only 58.4%, which is only 5 percentage points higher than the industry average.
In addition, most of the current production capacity under construction is used to produce new energy vehicles, and some of the existing production capacity of traditional fuel vehicle companies are also producing new energy vehicles in collinear lines. Therefore, the Association warned that new energy vehicles that seem to be in full swing also have the risk of overcapacity.
Specifically, among the 11 enterprises with a capacity utilization rate of more than 100%, 4 are new energy vehicle companies, and 3 new energy vehicle companies have a capacity utilization rate of more than 80%.
In fact, there are only 3 new energy vehicle companies in China with annual sales of more than 400,000 units, BYD, Tesla and SAIC-GM-Wuling, and only three other great wall motors, GAC Aegean and SAIC Passenger Cars with annual sales of more than 100,000 units. However, there are more than 10 pure new energy vehicle companies with annual sales of less than 10,000 vehicles.
Considering that the scale of the new energy vehicle market is still expanding, some brands and models with insufficient sales are still in the stage of production and sales shortly after the release time, but even in the overall market growth environment of 170%, there are still a few companies such as Guojizhijun and Guihang Lotus that have experienced a 50% decline.
From the current industrial structure, the cumulative sales of A00-class micro-small scooters in 2021 will reach nearly 1 million, accounting for 30% of the total sales of new energy passenger cars, accounting for 36% of pure electric vehicles, 7 percentage points ahead of the second-place B-class vehicles. The A00-class car is also the product most affected by the rising price of chips and battery materials, in addition to providing new energy credits for car companies, itself is not helpful to the profitability of enterprises.
Take a look:
Although it is still debatable whether 80% of the fuel vehicle brands will really be shut down at that time, Zhu Huarong's remarks do reflect the current huge differences in production and sales between different car companies, and the large number of car companies in the industry but serious overcapacity.
However, as far as Changan Automobile Group, which is led by Zhu Huarong, currently has a cumulative annual production capacity of about 4 million vehicles in China, but its annual production and sales last year were about 2.3 million vehicles, and the capacity utilization rate was also less than 60%.
Another shortcoming of Changan Automobile is the new energy vehicle. According to the data of the Association of Passenger Vehicles, the cumulative sales of Changan's own brand new energy passenger vehicles in 2021 will be 76,500 units, accounting for only 6% of the total sales of Changan's own brands, and 99.9% of them will be provided by the micro-small scooter Ben Ben E-Star. As for the sales of new energy vehicles in joint ventures such as Changan Ford and Changan Mazda, they are even more negligible.
In order to break the situation, Changan Automobile has always had plans to develop high-end new energy brands and models. In May 2021, Changan Automobile renamed its previous joint venture with NIO as "Avita Technology" to establish a new brand representing high-end electric vehicles. The first model, the Avita 11, is scheduled to be launched in the second quarter of this year, with deliveries opening in the third quarter.
In the mainstream electric passenger car market between 100,000 and 300,000 yuan, Changan New Energy completed nearly 5 billion yuan of financing in January this year, planning to launch a new new energy brand and three new pure electric vehicles. The C385, the first model based on a pure electric platform, is scheduled to be available in the middle of this year.
According to the plan, Changan Automobile's annual sales of new energy vehicles will reach 1.05 million units by 2025, accounting for 35% of the proportion of new car sales, nearly 30 percentage points higher than the current proportion, becoming China's "top two" new energy brand. However, in terms of current performance, Changan Automobile, which only has a ben E-Star to conquer the new energy market, cannot even rank among the top ten in the industry. Therefore, the addition of Avita and new new energy brands determines whether the Chinese head automobile group can smoothly get on the right track in the electrification transformation.
This article is an exclusive manuscript of the Observer Network and may not be reproduced without authorization.