At present, due to the impact of the epidemic, many companies' operations and production have been shelved, and with the easing of the epidemic in Shanghai, Jilin and other places, the resumption of work and production has become an urgent problem. A few days ago, some car company employees have successively returned to work, and the resumption of work in all walks of life is also proceeding in an orderly manner. So what difficulties or challenges will they encounter? Does the industry supply chain model need to change? What are the lessons that companies have learned from the pandemic?
Flush and Yinxi Finance organized online special activities around the current situation, problems and future development of the current "resumption of work and production", and invited executives of listed companies, industry veterans and well-known analysts to discuss the impact of the current epidemic on all walks of life online.
This interview focuses on the automotive industry, and the invited guests include Cui Dongshu, secretary general of the Association, and Cui Yan, chief analyst of the automotive industry at Huaxi Securities.
The dilemma and opportunity for the automotive industry to resume work and production
Since March, the national epidemic has been showing a multi-point sporadic state, and the operation of national automobile enterprises has ushered in a sudden decline.
Cui Dongshu, secretary general of the Association, said that in January and February this year, the situation of the entire automotive industry remained in a good state, with output in the first two months increasing by 18% year-on-year, and the retail situation was the same as last year. But in March, automobile production was the same as last year, retail sales fell by 10% year-on-year, the first few weeks of April the industry was more difficult, retail sales fell by 40% year-on-year, wholesale sales fell by 50%, the current industry production and marketing pressure is larger, the epidemic has brought serious impact on the recent production and resident consumption of the automobile market.
Cui Yan, chief analyst of the automotive industry at Huaxi Securities, pointed out that the supply chain tension caused by the epidemic in Shanghai is the main reason for the "downward state".
Why is Shanghai so important?
Not long ago, He Xiaopeng, chairman of Xiaopeng Automobile, said: "If the supply chain enterprises in Shanghai and the surrounding areas cannot find a way to dynamically resume work and production, then all the automakers in the country will face suspension of work and production in May." ”
The Yangtze River Delta region, especially Shanghai, is very important in the national automotive industry. Cui Dongshu said that the epidemic in Shanghai has not only brought disaster to local factories, but also had a serious impact on automobile production in enterprises in the Yangtze River Delta and even other regions. From the perspective of the supply chain of the automobile industry, the construction of the supporting system of China's parts and components is established with Shanghai as the core. Each parts group basically has its own headquarters or core production base around Shanghai.
According to Cui Yan, the automobile production capacity in Jiangsu, Zhejiang and Shanghai accounts for about 27% of the national automobile production capacity, while Shanghai is also a key channel for import and export, and the auto parts imported from Shanghai Customs account for about 1% of the size of China's parts market. In addition, among the A-share listed companies, there are about 192 involved in auto parts, of which Jiangsu, Zhejiang and Shanghai account for 105, accounting for up to 55%, and the proportion of the actual scale will be higher.
Secondly, the automotive industry chain involves a large number of parts, and once there is a lack of individual parts, it will affect the scheduling of the whole vehicle. Generally speaking, for every vehicle produced, the car company will be equipped with no more than two car parts, most of the main engine factories pursue efficient production, and their parts inventory is relatively small. Some OEMs in non-epidemic areas will also passively reduce production due to the shortage of parts, which will further affect the entire industrial chain.
As for which link is more damaged, Cui Yan believes that the main production capacity of automotive chips, wiring harnesses, and thermal management is concentrated in Shanghai and the surrounding core components production.
Specifically, the direct impact of the shutdown of Enterprises in Jiangsu, Zhejiang and Shanghai mainly involves the main engine factories with factories in Shanghai, such as SAIC Motor and Tesla, which have stopped production since the end of March. In terms of indirect impact, it is mainly the suspension of production by Jiangsu, Zhejiang and Shanghai parts manufacturers, the restriction of import and export, and the impact of production logistics, which will affect the main engine factories in other regions.
Cui Dongshu: Resuming work and production requires a process
On April 16, Shanghai released the first batch of 666 key enterprises in Shanghai to resume work and production, of which about 249 are automobile-related enterprises, 40% of which are related to automobiles and supply chains, including SAIC and Tesla factories, and the overall situation is gradually improving.
In terms of restoring production capacity, Cui Yan believes that the key nodes have begun to resume production since April 18, whether it is the main engine factory in Shanghai or the supply chain. According to its understanding, the capacity elasticity of the factory is still relatively large, and the follow-up can make up for the previous supply gap by working overtime and working in two shifts, and it is expected to complete the recovery of production capacity in June.
According to the situation learned by Cui Dongshu, SAIC, Tesla and other enterprises started the stress test of resuming work and production from the 18th, including personnel protection, supply chain support, logistics support, production management and workers' epidemic prevention measures. For large enterprises, the conditions for stress testing are relatively good, but from the perspective of the conditions of many parts and components companies, there are situations such as small production areas and lack of placement sites for employees, which bring problems to closed-loop management.
At present, the resumption of work and production of vehicle enterprises is still in a state of steady progress in all aspects of the resumption of work, and there is still a certain distance from the real resumption of production. Objectively speaking, the national vehicle industry shows signs of recovery and still needs a process.
In terms of specific time nodes, April 18 can be regarded as the first inflection point for the resumption of production and work, after which the recovery of the industry will be clearer from the end of April to May, gradually returning to the normal scale of single-shift production, and finally returning to a good level from mid-May to June.
The automotive supply chain is changing
As an industry that pays great attention to lean production, the entire efficiency of the automotive industry chain runs very quickly, but under the epidemic, this high efficiency has led to a very low level of inventory, that is, the shortage of some parts.
Cui Yan believes that under the influence of the epidemic, not only the epidemic in Shanghai, including the epidemic in the past two years, has actually brought some medium- and long-term impacts and changes to the entire automotive supply chain.
The first change is that the main engine factory accelerates the autonomous control of parts and enhances the independent research and development capabilities of core components. Compared with the domestic and global markets, the proportion of China's auto industry in the world is increasing year by year, and even in the era of intelligent electric, the important role played by China's automotive industry chain is actually greater than that of the era of fuel vehicles. More and more domestic car companies have begun to seek more domestic supply chains on key components and entered the stage of accelerated substitution in domestic production.
The second change, in the electric age, coupled with the impact of the epidemic, the entire supply chain may tend to be flat and modular. Like some electric vehicle companies will further promote the flattening of the supply chain, while strengthening modular production capacity.
Under such a general trend, the anti-risk ability of the automotive industry supply chain will be further strengthened, so the third change has occurred, that is, most car companies may choose to disperse the supply chain, such as increasing the B plan or even the C plan, thus forming risk dispersion, and this change may be medium- and long-term.
Cui Yan: The logic of medium- and long-term investment in the automotive industry remains unchanged
The Federation expects that the second quarter of this year will be affected by the pressure of the current situation and will be in the stage of recovery and adjustment. Overall, auto retail sales may fall by 30% to 40% in April, and the overall decline of 15% to 20% in the second quarter.
From the perspective of investment links, Cui Yan believes that the epidemic is relatively a short-term disturbance version, and the capital market is actually more about expectations. In the short term, it is recommended to gradually grasp the bottom opportunity under pessimism, in the medium and long term, the investment logic of the automobile industry has not changed, which comes from the transformation of smart electric vehicles.
In the past, the fuel vehicle brand advantage powertrain has been iterative for more than 100 years, for electric vehicles, its brand power and product strength come from the level of intelligent electrification, which is a huge opportunity for independent car companies, and some domestic OEMs have strong competitiveness. In terms of supply chain, the supply chain system of traditional fuel vehicles is actually very closed, but in the era of intelligent electric, it has shown new characteristics.
First, the speed of model iteration is shortened. Originally iterated in three or four years, now there may be new product iterations in two or three years. Second, the time to enter the supply chain is shorter. It may take more than two years to enter the supply chain system, but now it takes almost 6 to 9 months for Tesla or new forces to enter the supply chain, and many will become exclusive.
Cui Yan is very optimistic about these trends in the domestic independent supply chain, from another point of view, it also means that investors are optimistic about the increase in the electric vehicle industry, in the context of change, some independent brands and supply chain companies will further seize market share.