Automobile consumption is unimaginably miserable, and it is time for the big car market to fight a defense war

"Now the consumption power is exhausted, and it is unimaginably tragic." Recently, a sales friend of a Japanese main engine factory admitted that the market demand has suddenly dropped sharply. This is the most intuitive feeling of the industry for the entire April car market.

According to the April narrow passenger car retail sales forecast report released by the Association of Passenger Vehicles, the preliminary estimates show that the national retail sales of narrow passenger cars this month are expected to be 1.1 million units, down 31.9% year-on-year.

The problem of supply-side production reduction and suspension can still be difficult to alleviate in the resumption of work and production, but due to the overall unoptimistic economic environment, how to boost the dismal demand at the terminal and the sluggish consumer confidence is the root pain of car companies that is more difficult to reverse.

When the Shanghai Composite Index fell below 3,000 points on April 25, economist Guan Qingyou admitted that "the stock market will not lie...", and the current capital market has intuitively and truly reflected consumer confidence.

Especially for bulk consumer goods such as automobiles, although various localities are trying to introduce subsidy policies to issue consumption coupons, it is difficult to say that in the short term of the epidemic, the purchasing power of consumption and consumer confidence may still be difficult to say that there is a substantial recovery.

01 April sales volume collective fracture, inventory warning index as high as 66.4%

On the first day of May, when the workers were enjoying the "May Day Golden Week" made up by the transfer, the new car-making forces continued to open the monthly sales data contest, but the great contrast with their positive actions to show their achievements was the withering of the April sales data.

The three giants of the new forces, Weilai, Xiaopeng and Ideal, collectively encountered Waterloo.

Ideal car deliveries in April were 4,167 units, down 62.2% month-on-month; new car deliveries of Xiaopeng and NIO were 9,002 units and 5,074 units, respectively, down 41.6% and 49.2% month-on-month, respectively. Among them, Weilai and Ideal have experienced year-on-year declines of 28.6% and 24.8%.

Xiaopeng's new forces in March sold the championship throne, and was unexpectedly usurped by the second-tier new forces that came after zero runs, but even if the champions ran zero, only 9,087 vehicles were sold in April. The second-tier new force Nezha also performed well, with 8,813 units delivered in April.

As a relatively outstanding representative of the transformation of traditional car companies, GAC Aean held the 10,000-vehicle mark with a performance of 10,212 vehicles, achieving a year-on-year increase of 23%, but the month-on-month decline also reached 49.7%.

It is worth celebrating that as the champion of new energy sales, BYD successfully held the mark of 100,000 units per month, and the industry speculated that the company is expected to counterattack the joint venture car company to become the national passenger car sales champion in April.

In general, it is the new energy brands that ranked low in previous years that have withstood the pressure and have not collapsed too exaggeratedly, but the new forces that have previously led the sales list have a lot of pressure and suffered the pain of sales fractures. Compared with the gratifying situation of the four new forces breaking through 10,000 in March, the situation of no new forces breaking through 10,000 in April is particularly cold, and most of them have dropped significantly from the previous month.

New energy vehicles that are under special policy care are still like this, and the fuel vehicle market will naturally not be better. According to the latest Volvo Cars data, the company's global sales in April were 47,150 units, down 24.8% year-on-year (15,574 units), of which sales in China fell by 47.8%.

Although the rest of the mainstream car companies did not announce the overall sales, but the data on the insurance volume of mainstream manufacturers as of April 17 exposed by the automobile commune showed that the head joint ventures including Volkswagen, Honda, Toyota and other heads have declined significantly, with a decline of 30% at the less and 60% in the most.

At the sales terminal, the China Automobile Dealers Association released the latest issue of the "China Auto Dealers Inventory Early Warning Index Survey", showing that the Inventory Warning Index of Chinese Auto Dealers in April 2022 was 66.4%, up 10 percentage points year-on-year. Reached its highest peak since March 2020.

For fluctuations in sales data, most OEMs attribute this to supply chain issues. Indeed, the epidemic in Shanghai has had a huge impact on vehicle factories and parts suppliers in the Jiangsu, Zhejiang and Shanghai regions. However, under the full impact of the epidemic, the automotive industry is not only affected by the supply side, the weak terminal demand in the weak economic environment is the most critical pain point that determines the market trend.

In previous years, March to May has always been the peak sales season of the automobile market in the first half of the year, and the terminal promotion range is large. Around the Beijing Auto Show in April, the number of new cars listed will also increase significantly, and the number of customers visiting the store and the overall sales volume of car companies will show a significant upward trend.

However, due to the impact of the epidemic this year, the Beijing Auto Show was postponed, and the listing of a number of blockbuster new cars was changed to online or postponed, superimposed on factors such as epidemic control and control, dealers in Jilin, Shanghai, Shandong, Guangdong, Hebei and other places were affected by the entry and transaction of stores.

In terms of specific brands, car purchase consulting platform car fans revealed that the number of mercedes-benz and BMW stores in April fell by 40% month-on-month, and Audi fell by 60%. In addition, according to the platform's statistics, the terminal entry volume of Volkswagen and Nissan in early April fell by 70% compared with the end of March, and the number of honda stores fell by 60%.

02 I am more afraid of not being able to sell than not being able to produce it

In the face of the dilemma of the epidemic, in order to expand automobile consumption, many provincial and municipal governments across the country have done everything in their power before the May Day Golden Week.

Before May Day, the Guangdong Provincial Development and Reform Commission issued the "Announcement on New Energy Vehicle Purchase Subsidy Activities", and within 5-6 months, individual consumers can receive subsidies of 8,000 yuan / car for new energy vehicles within the scope of the "Guangdong Provincial Automobile Trade-in Special Action" promotion model. The promotion models cover a total of 45 new energy passenger cars from BRANDS SUCH ASD, Xiaopeng Motors, Dongfeng Nissan, Dongfeng Honda, GAC Honda, and GAC Aean. At the same time, the General Office of the People's Government of Guangdong Province also added 30,000 car purchase indicators to Guangzhou and 10,000 car purchase indicators to Shenzhen from May to June this year.

Shenyang, the hardest hit area of the epidemic, proposed that the Shenyang Municipal Government invest 100 million yuan to issue car consumption subsidies to individual consumers who buy cars in Shenyang, and encourage automobile scrapping and rural automobile consumption.

Ningbo City, Zhejiang Province, recently launched the "2022 Happy Red May • You Consume Me Help" consumption voucher distribution activity, with a total amount of more than 300 million yuan. Among them, the automobile consumption coupon, as the largest consumption coupon in par value, is divided into two grades: "100,000 yuan minus 3,000 yuan" and "150,000 yuan minus 5,000 yuan".

However, various measures have not stopped the cold flow of the "May Day Golden Week" car market.

In Guangdong, an E-an dealer under Guangwu Auto Trade said that the number of customers arriving at the store on the first day of May 1 increased by nearly 40% month-on-month, but it fell by about 6% compared with the same period last year, and the number of orders was the same as last year. An insider of Guangdong Youdao Group said that before May Day, the epidemic in Guangzhou was somewhat repeated, and the location of some of the group's Great Wall brand dealers was within the control range of Baiyun District, which had a greater impact. This year's order volume has dropped significantly year-on-year.

During the May Day period, the Beijing market was even worse in the midst of epidemic control policies. "In previous years, the 'May Day' holiday will usher in a small peak of car purchases, the average daily number of people entering the store is maintained at about 120 people, and the proportion of car viewing and car purchase is more than 70%. However, this year's 'May Day' holiday has few dozens of people entering the store every day, and other stores in the market are generally the same. The head of sales of a self-owned brand 4S store in Beijing Asian Games Village said.

There are many measures to promote consumption, why are consumers less willing to buy it?

On the one hand, compared with the large amount of "preferential treatment" such as halving the automobile purchase tax and exempting electric vehicles from purchase tax in that year, the subsidy of several thousand yuan this year is not large.

More importantly, under the epidemic, the fixed income of residents has decreased, the property income has shrunk, coupled with the external environmental impact such as the tide of rising automobile prices and rising oil prices, consumers are reluctant to spend with their wallets in place.

According to the National Bureau of Statistics, the total retail sales of consumer goods in mainland China fell by 3.5% year-on-year in March this year, which means that consumption power has declined. In addition, after the epidemic, many companies are facing rising costs and declining revenues and profits. It is more difficult for those enterprises with poor anti-risk ability, especially the self-employed households in the catering industry who rely on offline consumption, and the offline education and tourism-related industries are also under serious pressure.

These factors will directly hit the residents' consumption purchasing power and consumer confidence, especially for consumer goods such as cars, everyone will become extra cautious, netizens who work in educational institutions said that because the epidemic has led to unstable income, temporarily abandoned the car purchase plan.

In addition to consumer subjective factors, the obstruction of dealer store operations under the control of the epidemic is also a key factor causing the inventory index to be high.

According to data from the China Automobile Dealers Association, in the sample of 94 cities surveyed, dealers in 34 cities have closed stores due to the provisions of epidemic prevention and control policies. Among them, more than 60% of dealers whose store closure time is more than one week, and dealers in Shanghai are particularly serious, basically in a state of total silence.

It can be seen that under the epidemic, compared with the supply-side production capacity problem, the demand on the consumer side is even worse. Talking about the sales expectations of the current automobile market, Chen Shihua, deputy secretary-general of the China Automobile Association, also said frankly: "The impact of consumer demand in the terminal market on the growth of the automobile industry may be greater than the supply chain difficulties in the short term. ”

03 The car market in May is difficult to say optimistic

In terms of the progress of epidemic prevention and control, the new domestic cases showed a significant downward trend after entering May, and the average daily new case continued to be less than 1,000, especially in Shanghai, a major automobile town, which has rapidly dropped to more than 200 new cases per day after May 2. Automobile-related enterprises in Shanghai and Changchun have begun to resume work and production in an orderly manner.

Judging from this trend, the overall economic environment in the second half of the second quarter is expected to show a clear recovery trend.

However, this recovery trend is only compared with the current cold situation, the automotive industry chain as a whole to restore the pre-epidemic level, in the current epidemic has not completely subsided in the context, it still takes a long time.

As for when will the automotive industry return to normalcy? Cui Dongshu, secretary general of the Association, said that 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 recovering to a good level from mid-May to June.

In other words, the supply side will still be in the process of capacity climbing throughout May, and the normal state before the epidemic will be reached as soon as June.

On the demand side, Cheng Shi, chief economist of ICBC International, believes that the probability of the global market being released by the concentrated release of suppressed demand after the current round of the epidemic is small.

Cheng Shi analyzed that under the impact of the epidemic, if the disposable income of residents can recover quickly after the epidemic in the short term, the possibility of suppressed (retaliatory) consumption behavior in the resident sector will increase.

Combined with the actual situation in China, the average growth rate of per capita disposable income of Chinese residents before the epidemic was 8.5%, while the average growth rate of disposable income of Chinese residents after the epidemic has dropped to 6.5%. At the same time, the growth rate of per capita wage income of Chinese residents has fallen from 8.7% before the epidemic to 7.0% after the epidemic (compound growth in 2020-2021).

Therefore, Cheng Shi judged that from the perspective of changes in absolute income levels, it is difficult for residents' disposable income to provide basic support for retaliatory consumption after the current round of epidemic.

In addition, many netizens said that they had planned to buy a car in the near future, the recent rise in oil prices, new energy vehicles also followed the price increase, looking at those who did not dare to refuel the owners of the spit, they decisively gave up buying a car, or wait.

The supply-side boost relies on the joint efforts of parts suppliers and automakers, while the improvement of the consumer side depends on the encouragement of consumer confidence in the overall economic environment and the improvement of the operating environment.

Zhou Wei, director of the New Energy Vehicle and Fiscal and Taxation Policy Research Office of China Automobile Center, pointed out that whether automobile consumption can continue to recover depends on the economic environment in the end, and stimulating consumption can only be an auxiliary means.

This means that even if the epidemic is stable, the production of car companies has entered normalization, and the recovery of the automobile terminal market will still take a while, although the automobile market will show a warming trend in May, it will still be relatively sluggish compared to the pre-epidemic situation.

In the long run, dynamic zero clearance will be the mainstream policy in the face of the epidemic in China, whether it is the economic environment or the automobile industry, we cannot expect to return to the pre-epidemic overnight. Therefore, under the current two-way pressure on the supply side and demand side, car companies need to work harder to open their minds, stabilize production at the same time, cultivate and maintain more potential users, in order to quickly recover after the situation improves.