Author: Song Jiating
In the long battle with the COVID-19 pandemic, April 2022 is coming to an end. This period is not satisfactory - since the beginning of this year, China's Tianjin, Changchun, Guangzhou, Shanghai and other major automobile towns have been suspended due to the epidemic, including FAW Toyota, North and South Volkswagen, SAIC-GM, Tesla and other domestic and foreign car companies have been stuck for more than ten days, and market losses are difficult to estimate.
In the third week of April, Changchun announced that the social surface was cleared and enterprises gradually resumed normal production; the Shanghai Municipal Commission of Economy and Information Technology also established a "white list" system for key enterprises and started to resume work and production. After a week, 70% of Shanghai has resumed work and production.
The rescue policy has also given a shot in the arm to restore the vitality of the auto market.
On April 20, the General Office of the State Council issued the Opinions on Further Releasing Consumption Potential and Promoting the Sustained Recovery of Consumption, which requires a steady increase in bulk consumption such as automobiles, and no new car purchase restriction measures in various regions, and at the same time requires that the purchase restriction areas gradually cancel the purchase restriction on automobiles according to local conditions, and promote the transformation of consumer goods such as automobiles from purchase management to use management.
This means that the car purchase restriction policy that has lasted for more than ten years since 2010 has finally been relaxed. In the past ten years, in addition to the implementation of the license plate auction system in Shanghai, Beijing, Tianjin, Guangzhou, Shenzhen, Hangzhou and other cities have successively implemented car purchase restriction policies.
The original intention of car purchase restriction is to control urban congestion and exhaust gas pollution. However, in the process of fighting the epidemic for two consecutive years, the domestic automobile industry has suffered heavy pressure and the growth has stagnated, and the relevant departments have repeatedly proposed to promote the transformation and upgrading of automobile consumption, relax and optimize the automobile purchase restriction policy, and promote the transformation of automobile purchase restriction to guided use.
It is not yet known how much benefit the cancellation of the purchase restriction will bring to the automobile industry, but the current automobile industry is deeply affected by the double impact of sluggish production and sales, and the resumption of work is only the first step, and then it is necessary to resume work and production, but also to boost consumption from the consumer side.
The impact of Omikeron far exceeded expectations
Judging from the war and epidemic situation in the first four months, the impact of the new crown strain, Aomi Kerong, is far beyond human imagination.
According to the association, the cumulative sales of passenger cars in the first quarter of this year were 4.915 million units, down 4.5% year-on-year. Among them, due to the spread of the epidemic in Many Places in March, Jilin and Shanghai successively entered silent management, and the suspension of the two major automobile towns brought a considerable impact on automobile production and sales, and the retail sales of passenger cars were 1.579 million units, down 10.5% year-on-year. FAW-Volkswagen, BMW Brilliance, SAIC-GM and other companies all fell by more than 30% in March.
Originally, the industry thought this was already the peak, but from the actual situation, the situation in April was obviously worse. A screenshot of a widely circulated document shows that as of April 17, a number of mainstream joint venture car companies and mainstream self-owned brand car companies fell by more than 50% in the month.
Under this premise, the auto industry association is pessimistic that the retail sales of passenger cars in April will be around 1.1 million units, down 31.9% year-on-year.
It is worth noting that it is not only automakers that have been impacted, but also not only the automotive industry.
Soochow Securities pointed out in the research report that Shanghai is not only one of the most important automobile production bases in China, but also the location of multiple industries such as machinery, electrical equipment, chip semiconductors and other industries in the world, so Shanghai is not only the Yangtze River Delta, the Chinese market, but also an important part of the global supply chain.
Last week, semiconductor maker ON Semiconductor announced that its services to materials, equipment and service providers in China had been disrupted due to the closure of Shanghai, Shenzhen, Suzhou and Leshan, and it would have to consider closing its Global Distribution Center in China. In the automotive business, ON Semiconductor is the world's seventh-largest supplier of automotive semiconductors in 2020, with a market share of 4.2%.
Not only ON Semiconductor, according to public reports, Apple's three major suppliers are also facing difficulties in stopping production, and the delivery date of Apple-related products has been greatly delayed.
In this regard, Yu Chengdong, CEO of Huawei's consumer business and CEO of smart car BU, which spans the automotive and consumer electronics businesses, sent a circle of friends saying that if Shanghai cannot resume work and production, the technology and industrial industries involved in the Shanghai supply chain may face a complete shutdown by May.
Not only Huawei, but also He Xiaopeng, the founder of Xiaopeng Motors, also expressed concerns and called for and hoped that more government and competent departments would make different efforts and make every effort to coordinate the resumption of work and production.
First-line dealers: production and sales are two virtual, supported by inventory
It is easy to stop work and difficult to return to work. At present, the first-tier market, especially the level of automobile dealers, is still difficult to be optimistic.
FROM THE MARKET LEVEL, RENFA MEDIA LEARNED THAT FAW Toyota's first-line dealers have been more seriously affected by the suspension of production for more than ten days due to the suspension of production of the two most important production bases in Tianjin and Changchun.
In particular, dealers in East China are deeply affected by the pain of "cooking without rice".
Qian Jin, an investor in FAW Toyota Hangzhou, told RENQI Media that because FAW Toyota's new cars were running through Shanghai to all parts of East China, after the new cars produced about a week before the factory stopped production arrived in Shanghai Port, they could not operate due to logistics stoppages, resulting in no new cars arriving at the store for more than a month.
This has created problems for front-line sales, and as of now, the dealership has lost 100 new car sales a month, an 80% decrease from the previous one.
"There has been no car (shop) for more than a month." He lamented that if no new cars arrived at the store, they could only rely on dozens of stock cars to support them first, which made customers who could deliver cars in April have to delay delivery. In April, almost 100% of orders failed to be delivered on time.
In particular, the best-selling models, FAW Toyota's newly listed SUV have the highest attention, but they have been in a state of difficulty in finding a car. The dealer told reporters that at present, the store should receive orders or pick up, but because of the uncertain delivery time, it can only greet customers in advance and indicate in the order that delivery may be delayed.
This makes the order quite variable. "If you really want to postpone, can customers wait, will they change other brands, we can't control this, we can only talk about it when the time comes." He sighed.
The same is true for FAW Toyota dealers in the Beijing area. The best-selling models without exception do not have a current car, need to be booked in advance, according to different model configurations, some need to wait about 1 month before mentioning the car.
For first-line dealers, it is not only the problem of no car, but also the problem of insufficient passenger flow. The above-mentioned Hangzhou dealer told RENQI Media that the store's passenger flow this year fell by about 30% compared with the same period last year, and he further said that the situation across the country was similar.
In his view, the impact of the epidemic is only one of the reasons, and the change in customers' consumption habits is also an important reason. But it's clear that traditional car dealers haven't found an effective solution to the problem.
In view of the overall sales pressure this year, many dealers have said that they expect manufacturers to be able to appropriately adjust the supply and demand structure according to the current situation, such as the production volume of best-selling models and profitable models has been raised a little more, and the production of models with poor profitability has declined a little.
"Overcome difficulties together": cash support, assessment and reduction
The automotive industry generally believes that although enterprises have resumed production one after another and logistics and transportation have gradually unsealed, it will take a long time for the overall industrial chain to recover to the pre-epidemic level.
In particular, FAW Toyota, because the main production bases in Changchun and Tianjin happen to be located in several central control areas, FAW Toyota has also encountered a more serious impact than other automobile brands. Originally, FAW Toyota planned to hit the sales target of one million vehicles this year, but the epidemic counterattack that began at the beginning of the year has made this annual target variable sharply increase.
On the basis of not giving up the profit target and not giving up the two major goals of the 2022 million vehicle target, FAW Toyota has launched a multi-solid support policy to boost the confidence of front-line dealers.
The first is to implement financial support for medium- and high-risk dealerships. Faw Toyota promised to give up to 25,000 yuan of financial support to each store in response to the distribution stores identified as medium- and high-risk areas within March 2022, as well as the local government's explicit announcement to achieve municipal, or district- and county-level, street administrative area control, or to implement full nucleic acid testing in the city, district, or county, and street of about 247 dealerships.
The second is to provide dealers with multi-faceted marketing advice to help stores operate normally. Among them, the implementation of non-contact showroom reception, door-to-door delivery and other marketing actions, while ensuring a safe working environment, in order to bring customers and employees a sense of peace of mind, sense of security; strengthen online means such as live broadcasting, follow up to meet customer service needs; strengthen the store products, services and other training work, continue to improve the staff's business capabilities, better provide customers with high-quality service experience.
The third is to adjust or reduce the assessment and evaluation of distribution stores according to the epidemic situation. For dealers who are difficult to operate normally due to the epidemic, FAW Toyota will adjust or reduce their assessment and evaluation, and each business department will adjust or reduce the period evaluation of multiple business projects according to the development trend of the epidemic.
In this regard, FAW Toyota dealers said that at present, the above policies have been implemented, especially for dealers whose stores have been affected by the epidemic or whose operations cannot be sustained, manufacturers will adjust their targets for the month, "all stores have them."
In addition, the new car that resists hitting is even more exciting. What makes FAW Toyota dealers feel very happy is that toyota pure electric vehicle bZ4X is finally going on the market. According to the plan, on April 28, bZ4X officially opened pre-sale, after the "May Day" new car can arrive at the store, dealers are full of confidence in this electric vehicle, but there is still a lot of uncertainty about when the new car can start delivery.