Firmly grasp the "steering wheel" of the automobile market under the epidemic situation
Editor's Note
The China Automobile Dealers Association recently released the latest issue of the "China Auto Dealer Inventory Warning Index", showing that the auto dealer inventory warning index in March this year was 63.6%, up 8.1% and 7.5% year-on-year and month-on-month, respectively, the highest level in the same period in the past three years. How to understand the sharp rise in the inventory warning index, what is the current car market consumption experiencing, how to hold the "steering wheel" of the car market, and where should the car market go in 2022? This issue of News Insight focuses on the Chinese auto market under the epidemic situation, and analyzes the above issues one by one, so stay tuned.
Photo credit:Xinhua News Agency
■ Li Hainan, reporter of China Economic Times
China's auto market has gone through the first quarter of 2022 in the "overall market is in a slump range".
According to the results of the latest issue of the "China Auto Dealer Inventory Early Warning Index" released by the China Automobile Dealers Association, the inventory warning index of Chinese auto dealers in March 2022 was 63.6%, up 8.1 percentage points year-on-year and 7.5 percentage points from the previous month, and the inventory warning index was above the boom-bust line. Among them, the epidemic in March rebounded in many places, and automobile production, sales, consumption and travel were greatly affected, resulting in the overall market in a slump range.
Su Hui, executive vice president of the Tangible Market Chamber of Commerce of the China Automobile Dealers Association, interpreted the above data in an interview with the China Economic Times reporter and gave suggestions on how to get out of the downturn in the current automobile market.
The repeated epidemic situation, the continuous rise in oil prices, and the cooling of the automobile market due to multiple factors
The repeated outbreak of the epidemic has become the primary factor in the cooling performance of the automobile market in March this year. The survey results show that in March, affected by the epidemic, many provinces and cities increased their epidemic prevention and control efforts, which had a significant impact on consumer travel and car purchase, especially in late March, the collection of customers and deliveries fell sharply, and it is expected that it will be difficult to recover in the short term.
The "six consecutive increases" in oil prices and the price increase of new energy vehicles have also made the car market "worse", coupled with the continued downturn in consumers' willingness to buy cars, the sales rhythm of dealers has been disrupted, which has led to a decline in car sales. The China Automobile Dealers Association expects full-caliber narrow passenger car terminal sales to be around 1.6 million units in March, a 10% year-on-year decline.
Coupled with the impact of many auto shows due to the repeated epidemic situations can not be carried out normally and other factors, in March, less than 10% of dealers can complete the task indicators of the month, and nearly half of the dealers only complete about 70% of the task indicators. The survey results show that in the sample of 90 cities surveyed, dealers in 25 cities have suspended business for several days due to epidemic prevention and control.
"The continued rise in inventory warning data reflects the downturn in the auto market." Su Hui believes that this round of epidemic has affected megacities such as Beijing, Shanghai, and Shenzhen, and the impact of the epidemic and prevention and control measures have been transmitted to the car market, leaving the overall market in a recessionary range. Objectively, consumers' consumption expectations have also shifted to conservative and wait-and-see.
"The uncertainty of the epidemic counterattack and the complex international situation have made the automobile market bear the impact of insufficient supply in the industrial chain and energy price fluctuations while bearing the market downturn and the intensification of uncertainty." Su Hui stressed that according to comprehensive research, the current automobile market is experiencing a more severe situation than the beginning of the outbreak in 2020.
Su Hui believes that because the prediction of the impact of the future epidemic is not yet clear, it will take time for the auto market to truly digest the negative impact, and it is necessary to regain consumer confidence in order to look forward to a new round of market recovery. In the short term, sales will remain sluggish in April due to the impact of epidemic prevention and control, postponement or cancellation of vehicles in many places.
Nevertheless, the China Automobile Dealers Association also believes that if the epidemic is controlled in mid-to-late April, the backlog of market demand in the short term will be released quickly, and sales in April are expected to be slightly better than the same period last year, and sales in May will increase by about 10% year-on-year.
Stabilizing the Stock Market and putting survival in the first place
Even so, the increased uncertainty in the future automotive market cannot be ignored. The China Automobile Dealers Association suggests that dealers should rationally estimate the actual market demand and reasonably control the inventory level according to the actual situation.
In Su Hui's view, the current factors plaguing the automobile market are not insufficient consumption in the simple sense, but the lack of consumption expectations and consumer confidence, "To reverse this situation, we must rely on the improvement of the national epidemic situation and the recovery of economic confidence, which is not a day's work." Su Hui stressed that for the majority of car companies and dealers, it is necessary to maintain a calm expectation of the car market in 2022, compared with expecting a rebound in the car market during the year, ensuring how to survive is the first priority.
In addition, from the perspective of maintaining the healthy development of the automobile industry, Su Hui believes that it is necessary to reaffirm and determine the industrial policy that "stability" is the main keynote. It is necessary to restrain the entire automotive industry in accordance with the government's policy requirements and standards for stabilizing production, stabilizing the people's hearts, and stabilizing the market. "We must stabilize the stock, stabilize the customers, and let the market have confidence." He stressed.
After all, it is an indisputable fact that dealers are profitable and slow to withdraw funds. The survey results show that in March, under the control of epidemic prevention, some car companies were forced to stop production or reduce production, and some models were undersupplied. Superimposed car supply-side impact, raw material prices rise, car prices rise or discount narrowing, weak demand and consumer confidence in car purchase weakened, dealers' profit space is limited. At the same time, under the epidemic situation, the normal sales work of dealers cannot be carried out smoothly, and the decline in sales has led to an increase in inventory, resulting in a slow return of dealers' funds.
Su Hui reminded that based on the known impact of the epidemic prevention and control policy on the automobile market, as well as the impact of the international complex situation on the interior of the automobile industry chain, including chips, the automobile industry department and automobile manufacturers and dealers have actually formed a relatively consistent cognition, that is, to press the "treasure" on the stock car market, to tap the market potential of the stock car market by increasing the intensity of automobile services, promoting preferential maintenance and repair, etc., to stabilize fixed automobile consumer customers, and then give priority to ensuring market stability.
Stabilizing the market requires a combination of macro and micro policies
Su Hui frankly said that in his decades of career, he rarely saw the current sluggish car market, but in the face of a variety of uncertainties and unknown expectations of "containment", he always tried to find a way out.
First, we must do everything we can to restore confidence in the fight against the epidemic. Fighting the epidemic is a top priority at present, which is related to the overall economic and social development. "If the epidemic shows no signs of easing, it will be difficult to restore confidence in economic growth, which will affect the recovery of specific industries, and the automotive industry is no exception." Su Hui said.
Second, we must really make great efforts to organize cars to go to the countryside, and through tapping the market potential of rural areas and fourth- and fifth-tier cities, we must form an echo with the stabilization of the stock car market. Su Hui believes that the epidemic prevention and control situation in rural areas and fourth- and fifth-tier cities is relatively optimistic, and there is still potential to actively promote automobile consumer demand. He stressed that on the one hand, for large cities and other areas where the epidemic is seriously affected, it is necessary to stabilize the stock car market; on the other hand, for places where the epidemic is relatively moderate, it is necessary to promote cars to the countryside. This is also a valuable historical experience that has been proven to be a driving role in the automotive industry.
Third, we must take precautions and respond to potential energy crises. Su Hui believes that the international situation in 2022 is becoming increasingly complex, coupled with the transmission effect of the Russian-Ukrainian war on the energy market will gradually spill over, the automotive industry should earnestly consider the potential risks that may exist, continue to adhere to the equal emphasis on new energy and traditional energy, so that consumers can establish a correct concept of automobile consumption.
Fourth, we must encourage energy conservation to take the lead and make efforts to promote the development of hybrid vehicles. Su Hui believes that based on the response to the potential energy crisis, this year should promote hybrid power, to first emphasize energy conservation priority, including electricity consumption, fuel consumption, natural gas consumption, we must first focus on saving. "Pure electricity consumption is actually putting energy consumption in the front of the power sector." Su Hui stressed that it is not blindly promoting pure electric vehicles, the policy level should be fully considered, and energy conservation should be encouraged and guided, including encouraging megacities such as Beijing and Shanghai to continue to encourage combined travel, such as public transportation and green travel, rather than blindly encouraging private car travel.
"The automotive industry and the macro economy are like the relationship between fish and water, and the main tone of economic stability and progress is also applicable to the current development of the automobile industry." Su Hui said that as long as the macro policy is stable and market confidence is gradually restored, the automotive industry can gradually get out of the haze, and the top priority is to sink down, implement comprehensive measures, stabilize the market, and smoothly pass through the extraordinary period.
Why car consumption is weak
■ China Economic Times reporter Lin Chunxia
Affected by the rebound of the epidemic, the sharp rise in oil prices, the decline in subsidies for new energy vehicles and the increase in automobile sales prices, the domestic automobile consumer market has experienced a downturn.
According to data recently released by the China Automobile Dealers Association, the inventory warning index of automobile dealers in March this year was 63.6%, up 8.1% and 7.5% year-on-year, respectively, the highest level in the same period in the past three years. The China Automobile Dealers Association expects full-caliber narrow passenger car terminal sales to be around 1.6 million units in March, down about 10% year-on-year. The sharp rise in the inventory warning index means that dealers are seriously slow to sell, and it also means that automobile consumption has gradually entered a weak period.
Consumers' willingness to buy a car continues to be sluggish
Recently, a reporter from the China Economic Times found in an interview that consumers' demand for the purchase and use of cars is declining significantly.
Ms. Lin of Beijing told this reporter that after the treatment of an old car in her family, she wanted to buy a new energy vehicle recently, but due to the rebound of the epidemic in many places, the closure of the community, travel was affected, coupled with the recent sharp rise in oil prices, the decline in subsidies for new energy vehicles and the increase in the sales price of automobiles, she temporarily cancelled the car purchase plan and wanted to wait for a period of time to buy a car.
Ms. Lin also said that now people advocate green travel, go out to take the bus, subway or find an online car, do not have to spend gas, do not have to find a parking lot, but easier. Especially in big cities like Beijing and Shanghai, it is very troublesome to go out to find parking spaces, and it is more convenient to take an online car.
Mr. He from Zhejiang also feels the same way. He told this reporter, "Affected by the epidemic, many local enterprises have gone out of business, it is becoming more and more difficult to make money, and everyone's purchasing power is not too strong." ”
Most of the respondents said that the car as a consumables does not maintain its value, perhaps bought 1 million yuan this year, in a year or two may only be worth 800,000 yuan, 500,000 yuan, the price fell very quickly. Therefore, people's demand for car purchase and use is declining.
"As a means of transportation, cars have become very popular in some families in China, and it is not uncommon to buy a car now." Mr. Ho said.
He found that some of his friends and colleagues around him did not change cars as often as before. "In the past, some of my friends changed cars more frequently, and some friends changed new cars just two or three years after the car was bought. And everyone's comparison psychology is very heavy, you buy Audi, I buy Mercedes-Benz, BMW, or other better cars, and now this comparison has also declined, everyone is more rational about car consumption, can not change the car without changing. And travel is also greener, can not drive without driving, used to be wherever you go to drive yourself. Now there are many platforms such as online car-hailing and driving, and you can choose a variety of travel modes. In particular, some companies, which originally had several cars, now simply sell the car and directly use the online car to run the business, so the cost is lower. ”
Mr. Chen, a person from Hebei business circles, told this reporter that the decline in the people's willingness to buy cars has a lot to do with factors such as rising oil prices, the continuous spread of the epidemic, and the adjustment of new energy vehicle consumption policies. "Originally, it was a dull year for automobile consumption, and after the cost increased, everyone's consumption was more cautious." The key is that in recent years, the people's income has also been greatly affected by the epidemic, everyone can not buy a car without buying, can insist on a period of time, the car is old and really need to change the car, just think about changing fuel saving or new energy vehicles. "In short, everyone should choose a car with a higher cost performance and a relatively low comprehensive cost." Now more people choose new energy vehicles than before, the reason is to save costs.
"The cost of driving is too high, and I often take public transportation or walk when I go out, and it's not like driving every day." Mr. Chen said that when we change cars in the future, we will also consider new energy vehicles, because new energy vehicles are low-carbon and environmentally friendly, and the cost of use is low.
The automotive market still has a lot of space
Although some people's willingness to buy cars and consume has declined, there is still a lot of rigid demand space in the market. Mr. Wang of Hebei is a consumer with rigid demand, he told this reporter that he just changed a Buick car in March this year, it has been less than a month, his original old car has been driving for 12 years, the time is a little long, afraid of unsafe. Mr. Wang said that he still likes fuel cars, stable performance, convenient refueling. He believes that the performance of new energy vehicles needs to be further improved, and charging is not convenient, so it is not as good as fuel vehicles with gas stations everywhere.
Mr. Wang believes that Chinese mouths are many, the rigid demand in the automobile market is still very large, and some consumers who buy luxury cars basically use bank loans. "The Buick car I bought, only more than 100,000 yuan, is full payment. The salesman at the car dealership asked me to take out a loan, and I didn't want to take out a loan. ”
Although there is no shortage of consumers like Mr. Wang, under the impact of factors such as the spread of the epidemic and the sharp rise in oil prices, under the influence of many uncertainties at home and abroad, compared with the hot sales scenes in previous years, the "scenery of that time" in today's automobile market is difficult to reproduce in the short term.
In this regard, the China Automobile Dealers Association said that under the control of epidemic prevention, some car companies were forced to stop production or reduce production, and some models were undersupplied. Superimposed on the impact of the supply side of the car, consumer confidence in car purchase weakened, dealer sales rhythm was disrupted, car sales declined, profit margins were limited and difficult to recover in the short term, and it is expected that the auto market will remain sluggish in early April. If the epidemic is effectively controlled in mid-to-late April, the backlog of market demand in the short term will be released quickly, and sales in April will be slightly better than the same period last year, and sales in May will increase by about 10% year-on-year.
It is crucial for the automotive market to regain confidence
At the beginning of April, a news that "the inventory warning index of Chinese auto dealers in March was 63.6%, the highest in the same period in the past three years", attracted great attention from all walks of life. While revealing the current situation of China's auto market, this also shows the re-appointment of the "XiaoyangChun" in China's auto market.
According to the latest "China Auto Dealer Inventory Early Warning Index Survey" released by the China Automobile Dealers Association, the epidemic in March fought back in many places, and automobile production, sales, consumption and travel were greatly affected, resulting in the overall market in a slump range. According to the survey, in March, the inventory warning index of Chinese auto dealers was 63.6%, up 8.1 percentage points year-on-year and 7.5 percentage points month-on-month, the highest level in the same period in the past three years.
The sharp increase in the inventory warning index means that dealers are seriously slow to sell. As a result, car sales have declined, profit margins have been limited, and it is difficult to recover in the short term. In this regard, there is a strong pessimism in the market, believing that similar situations will continue until April this year, and if the epidemic prevention and control situation does not really improve, the downturn in the auto market will continue.
The increasingly obvious wait-and-see attitude of consumers and the conservative sales orientation of dealers are together constituting the "background" of China's auto market since the first quarter of 2022.
How to regain confidence in the automobile market is of great importance, which is not only related to whether the automobile industry can smoothly survive this round of impact and return to the right track of development, but also closely related to the development of the entire national economy.
The automobile industry carries the release of huge national consumption power and contributes greatly to tax revenue and fiscal revenue. Maintaining the stability and health of the automotive industry is indispensable for reading the word "stability" in the macro economy. In addition, the automobile industry chain is long, which has a huge effect on absorbing and absorbing employment, and is of great benefit to stabilizing employment. How long is the employment chain in the automotive industry? Some people have made such an analogy: up to academicians, scientists, down can extend to car washes, car watchers.
It can be seen that from the perspective of the contribution of the automobile industry and the whole industry to the entire national economy, the automotive industry cannot be allowed to "lie flat". As a result, regaining confidence in development is the only option facing the automotive industry.
Precise policy is the key to preventing a further decline in market confidence.
In view of the repeated impact of the epidemic on the automobile market, we can actively expand the innovation of the automobile sales model, such as diverting traffic to the line and maintaining the necessary sales channels to meet consumer demand; for the vehicle management department, bank suspension of business and other financial services that affect the provision of financial services, remote service docking can be given priority to ensure that demand is responded to in a timely manner and is good for automobile consumption.
In response to the epidemic factors, such as commodities copper, aluminum and iron, power battery raw material nickel cobalt lithium prices rose, as well as new energy vehicle subsidies decline, oil prices rose sharply and other factors, caused by the downturn in the car market. It can be planned from the perspective of firmly ensuring supply and stable prices at the national level, and continuing the subsidy policy to maintain the willingness to buy a car.
After all, the real influence on the willingness to consume in the automobile market is still in the holder of currency to be purchased consumers, the policy can be touched by the stimulation of consumer demand release, so that consumers want to consume, dare to consume, willing to consume, and these are based on a healthy, stable, open, harmonious economic and social order as the premise, otherwise, blindly through the policy to increase the number of "fast forward button" in accordance with the promotion of consumption may not necessarily get an effective response from the market, consumers vote with their feet The premise is that the automobile market can provide products and services that meet consumer demand. The only way for policy is to provide a more stable market environment and related services.
The crowd gathered firewood and the flames were high! To ensure that the automobile market regains confidence in development, it also needs the joint efforts of national policies, the automobile industry and the entire industry, and even public opinion and consumers themselves.
The copyright of this official account belongs to China Economic Times. If the content of this article is reproduced or quoted, it must be approved and indicated to be transferred from the China Economic Times.
Producer 丨 Wang Hui Li Piguang Wang Yu Liu Weimin
Chief Editor 丨 Mao Jinghui Editor 丨 Jiang Shuai