March, the first full month of sales after the Chinese Lunar New Year, tends to get back on track in the overall auto market. However, the past March 2022 has not been very friendly to many joint venture car brands, and most mainstream joint venture brands have ushered in a significant decline in sales.
Sales of Nissan, Volkswagen, and GM fell sharply
Sales data show that SAIC-GM's sales in March were 88,500 units, down 31.42% year-on-year, and the cumulative sales volume in the first quarter was 274,500 units, down 18.24% year-on-year. Among them, the main brand Buick Automobile sold 163,000 units in the first quarter, down 27.2% year-on-year, a large decline; the Chevrolet brand performed relatively stable, with sales of 52,000 units in the first quarter, a slight decline of 4.9% year-on-year; cadillac brand sales of 47,000 units in the first quarter, down 17.5% year-on-year.
As the best-selling car brand in China, Volkswagen also ushered in a large decline. Both joint venture brands fell year-on-year, of which FAW-Volkswagen sales in March were 126,100 units, a year-on-year decline of 40%; SAIC Volkswagen fell less, with sales of 110,000 vehicles in March, down 2.21% year-on-year, and it is worth mentioning that based on the 50% increase in January this year, SAIC Volkswagen's sales in the first quarter increased by 32.97% year-on-year, with cumulative sales of more than 330,000 vehicles.
The japanese brand, which has always been strong, has also been affected to varying degrees in March.
In March 2022, Nissan Motor China sold a total of 87,900 new vehicles, down 32.6% year-on-year, while Dongfeng Nissan sold more than 67,000 units in March, a year-on-year decline of 33.5%, and sales in the first quarter were 298,800 units, down 15% year-on-year.
In Terms of Honda, Honda's terminal car sales in China in March were 101,000 units, down 33.2% year-on-year. Among them, Guangqi Honda's terminal car sales in March were 53,700 units, and Dongfeng Honda's terminal car sales were 47,361 units. Judging from the performance in the first quarter, Honda's cumulative sales of terminal vehicles in China were about 353,800 units, down 9.3% year-on-year.
Among the top three Japanese and even mainstream joint venture car brands, it seems that only Toyota has resisted the downward trend, with new car sales in China in March reaching 167,300 units, an increase of 0.4% over the same period last year. But it is clear that for Toyota, which has been aggressive in recent years, the slight increase has actually shown a certain sense of difficulty.
It can be seen that for major mainstream joint venture car brands, March can be described as the darkest moment of the post-epidemic period. So behind this, in addition to the repeated epidemics and supply chain shortages, what problems are the joint venture car brands facing?
The outbreak and lack of core cannot be blamed
As we all know, in March this year, the domestic epidemic was repeated, and many places adopted sealing and control measures, and the sales volume of local dealers had an impact, especially in cities with strong auto consumer demand such as Shenzhen and Shanghai, so the overall auto market sales decline is inevitable.
Taking the FAW-Volkswagen brand as an example, its sales volume in Jilin Province in March decreased by nearly 80% year-on-year, and its sales in Shanghai and Shenzhen decreased by nearly 50% year-on-year.
At the same time, the repeated impact of the epidemic is not only the sales link of the terminal market, but also the production rhythm of many automobile companies in the automobile production link, especially the supply of auto parts such as chips has also been seriously affected, resulting in the inability to fully utilize production capacity. Volkswagen Group, for example, has announced the partial closure of its Shanghai plant.
But then again, the impact of the epidemic and chip shortage on the automotive industry is actually universal, but from the perspective of independent brand car sales, in addition to BYD ushered in a surge, Geely, Great Wall, Changan in March independent brand plates have maintained a stable sales performance, even if some of them have declined year-on-year, but the amplitude is relatively slight.
In this way, the decline in sales of joint venture car brands does not seem to be all to blame for the epidemic and lack of cores.
For consumers, the biggest advantage of the joint venture brand is the high quality guarantee, but from the 600,000 Shenyang manufacturing BMW Brilliance X5 to the 1.450 million Chengdu's most expensive specialty Polar Star 1, all reflect the rapid improvement of China's automobile manufacturing level, the quality gap between independent brand models and joint venture brand models is gradually narrowing, and the high-quality advantages of the latter are no longer distinct.
In 2021, the market share of Chinese brand cars will exceed 44%, a new high in the past decade. At the same time, the average sales price of new self-owned brand cars has also risen from 80,000 yuan in 2017 to 93,000 yuan in 2020, and the average selling price of mainstream independent brands such as BYD, Geely, Changan, and Haval has basically exceeded 100,000 yuan. The average selling price of some brands has even surpassed that of joint venture brands, and brand recognition has continued to increase.
Not only that, since the beginning of this year, domestic hybrid technology has ushered in a comprehensive outbreak, especially in the context of oil price surge, whether it is performance, fuel consumption, or price and other aspects of the domestic hybrid model, it is obvious that it will be more and more favored by the market.
However, in the view of Brother Ruan, although the strong rise of independent car brands has brought higher quality choices to the market, it is not easy to win the market share of joint venture car brands, after all, for the Chinese market that has been deeply cultivated for many years, mainstream joint venture car brands have never lacked bottom cards.
A joint venture brand ready to go
In the face of the stock competition in the automobile market and the impact of the new four modernizations, the most important problem facing the joint venture brand is no longer how to increase market sales and expand market share. It is more important to embrace the new era and ensure the competitive strength of the brand in the future era of electrification.
According to the latest forecast of the Association of Passenger Vehicles, the cumulative sales of new energy passenger vehicles in China will exceed 5.5 million units in 2022, and the market penetration rate will reach about 25%. Although affected by factors such as the price increase of subsidized declining models, the sales of new energy vehicles will plummet in the near future, but with the doubling of the scale of the new energy industry chain and the improvement of cost control capabilities, it is expected that the increase in new energy vehicles at the end of 2022 will be stronger.
In fact, it is not difficult to find that the joint venture brand is also accelerating the layout of new energy vehicles. Taking Volkswagen as an example, its ID. family has reached 5 models in the domestic layout, and the product matrix has gradually formed, and about half a year after the first model was listed, the delivery volume exceeded 10,000 units, becoming the first domestic traditional car company with a monthly delivery of pure electric models of a joint venture brand. With the ramp-up of production capacity, the monthly sales of the Volkswagen ID. family have remained above 10,000 units. In contrast, the domestic "Wei Xiaoli" achieved results from 0 to 00,000, which took 3 years.
In addition, Japanese joint venture brands are also actively embracing electrification this year, Dongfeng Honda e: NS1 and FAW Toyota bZ4X two new pure electric SUV will be officially launched in the second quarter of this year, based on the exclusive electric architecture to build, in terms of endurance, performance is also more competitive.
Toyota plans to achieve 100% pure electrification in China, Europe and North America by 2030, and electric vehicles will account for 100% of the group's global vehicle sales by 2035.
Honda Motor also announced that it will not release new fuel vehicles to the Chinese market after 2030, and will bring five new pure electric vehicles. It is worth mentioning that Guangqi Honda recently announced that it will no longer produce and sell the existing products of the GAC Acura brand from 2023, and the purpose is also to integrate the resources of the GAC Acura brand and join the electrification business.
Nissan Motor plans to launch 20 pure electric models and models equipped with Nissan e-POWER technology in the next five years, and by 2026, Nissan's sales of electric vehicle models in China will account for more than 40% of total model sales.
At present, the competitiveness of joint venture brands in the field of electrification is indeed limited, but with the gradual release of brand technical strength and product strength, it is still too early to make a conclusion. Brother Rumble believes that at least until 2025 will usher in the final battle of the automotive market.
In recent years, due to factors such as the suspension of production and chip supply due to the epidemic, the domestic automotive industry has been greatly affected, and the mainstream joint ventures with large sales volume have also been more affected, so the sales volume has declined significantly. But on the other hand, the sales volume of joint venture brands continues to decline, which to a certain extent also shows that the competitiveness of the brand is not as good as before. With the rise of domestic hybrid technology, the field of electrification has also been rapidly occupied by new forces, and joint venture brands must impress Chinese consumers with more sincerity.