Affected by the epidemic and other factors, in April, some vehicle manufacturing enterprises and parts companies in the core areas of the automobile industry, such as Shanghai and Jilin, fell into a state of suspension of production, and automobile production and sales declined. The China Automobile Dealers Association said that as the epidemic situation improves in May, the demand for car purchases that were suppressed in the early stage will be released, while the relevant departments of the state and local governments have successively introduced some policies to promote consumption, and automobile OEMs have also introduced support measures, and it is expected that car sales in May will increase month-on-month.
While promoting the resumption of work and production in the automotive industry, in recent times, measures to stimulate automobile consumption have been intensively introduced from the central to the local level. For example, Guangzhou increased the number of car purchase indicators by 30,000 and Shenzhen by 10,000 car purchase indicators. The Shenyang Municipal Government invested 100 million yuan to issue automobile consumption subsidies to individual consumers (household registration is not limited) who bought cars in Shenyang.
Xin Guobin, vice minister of the Ministry of Industry and Information Technology, said in an interview a few days ago that the mainland automobile industry has strong resilience, large market space and deep gradient, and with the effectiveness of epidemic prevention and control, we are full of confidence in the synchronous recovery of supply and demand, and the loss of production and marketing in the second quarter is expected to be made up in the second half of the year, and stable growth is expected to be achieved throughout the year.
The policy mix punches to boost automobile consumption
Automobile is an important pillar industry of the national economy, the industrial chain is long, and the role of driving economic growth is very obvious. Automobiles are also an important consumer goods for residents, accounting for about 10% of the total consumption of society.
Affected by the epidemic and other factors, in the entire first quarter, domestic automobile production and sales were 6.484 million units and 6.509 million units, an increase of 2.0% and 0.2% year-on-year, respectively, and the growth rate was 6.8 percentage points and 7.3 percentage points behind that of January to February, and the production and marketing situation was not optimistic.
According to the China Association of Automobile Manufacturers, the year-on-year growth rate of the industry in the first quarter fell significantly, mainly due to the recent outbreak of epidemics in China, the obvious increase in the difficulties of market players, the smooth flow of the economic cycle encountered some constraints, and the new downward pressure was further increased.
Since April, the supply and demand ends of the automotive industry have continued to be under pressure. According to the weekly report data reported by key enterprises, the China Association of Automobile Manufacturers estimates that in April 2022, the sales volume of the automotive industry is expected to complete 1.171 million units, down 47.6% month-on-month and 48.1% year-on-year; from January to April 2022, sales are expected to complete 7.68 million units, down 12.3% year-on-year.
At this stage, the factor that has the greatest impact on the automobile market is mainly the epidemic. This round of epidemic broke out in many places in March, and the epidemic prevention and control situation in Northeast China, Jiangsu, Zhejiang, Shanghai and other places as an important town in the automobile industry is even more severe, and has successively opened sealing and control management. Affected by the epidemic prevention and control, logistics have been blocked, the production rhythm of some parts and components enterprises has been disrupted, and there has been a shortage of parts supply, resulting in the suspension of production of vehicle production bases in central China, south China, northeast China and other places. At the same time, dealers in the sealed areas also stopped operating activities, and consumer demand declined.
As an important starting point for boosting consumption, automobiles have been intensively introduced from the central to local governments to stimulate automobile consumption. The executive meeting of the State Council held on April 13 pointed out that to encourage bulk consumption of automobiles and home appliances, all localities must not add new car purchase restriction measures, and the gradual increase in automobile purchase indicators has been implemented. Support the consumption of new energy vehicles and the construction of charging piles.
On April 21, the Ministry of Commerce revealed at a regular press conference that it will encourage bulk consumption of automobiles and home appliances, deepen the reform of the field of automobile circulation, expand the circulation of second-hand cars, support the accelerated development of new energy vehicles, and encourage localities to carry out green smart home appliances to the countryside and replace old with new.
On April 25, the General Office of the State Council issued the "Opinions on Further Releasing Consumption Potential and Promoting the Sustained Recovery of Consumption", which proposed to "consolidate and expand consumption in key areas, encourage qualified areas to carry out new energy vehicles and smart home appliances to go to the countryside, and promote brand consumption and quality consumption into rural areas".
There has also been a response from all over the world. The General Office of the Guangdong Provincial Government recently issued a notice on several measures to further promote consumption in Guangdong Province, including encouraging automobile consumption, promoting the consumption of home appliances, and issuing consumption coupons. The notice said that during the period from May to June, on the basis of the original, Guangzhou increased 30,000 car purchase indicators, Shenzhen increased 10,000 car purchase indicators, and various localities must not introduce measures to restrict car purchases.
The Shenyang Municipal Bureau of Commerce and the Municipal Finance Bureau jointly issued the "Implementation Opinions on Promoting Automobile Consumption", which clearly states that nine policy measures to promote automobile consumption will be launched in the city. One of the measures is that the municipal government invested 100 million yuan to issue car consumption subsidies to individual consumers (household registration is not limited) who buy cars in Shen. Individual consumers who purchase non-operating new cars in Shenyang automobile sales enterprises can apply to the government for automobile consumption subsidies.
Automobile sales are expected to grow positively in the second half of the year
With the effective control of the epidemic, the promotion of the resumption of work and production, and the implementation of policies to promote consumption, the automobile market is expected to gradually pick up.
At present, some enterprises have resumed work and production, and the obstructed logistics have gradually become smooth. By the end of April, most of the automobile production plants and automobile industry chain enterprises in Jilin and Shanghai, which had been seriously affected by the epidemic, had begun to resume work and production, and the business activities of dealers had gradually been carried out, and the production and sales of automobiles had improved.
The Ministry of Industry and Information Technology has built a supply chain coordination platform for key industrial chains such as automobiles, focusing on key areas such as the Yangtze River Delta and the Pearl River Delta, promoting the solution of problems such as employee return to work, logistics and transportation reflected by industrial chain enterprises one by one, and focusing on ensuring the coordinated production of upstream and downstream enterprises, with points with chains and chains to ensure the smooth operation of key industrial chains.
According to the data released by the Ministry of Industry and Information Technology, as of April 28, the resumption rate of the first batch of 666 "white list" enterprises in Shanghai was 86.8%, of which the resumption rate of vehicle and parts supporting enterprises in the automobile manufacturing industry reached 77%, and the resumption rate of integrated circuit design, manufacturing, packaging and testing and other related enterprises was 91%. The 50 key enterprises monitored by Jilin Province have a resumption rate of 98%.
Huachuang Securities pointed out that with the resumption of work and production after the epidemic and the resumption of logistics, it is expected that the retail and wholesale data in May will be significantly restored, and in an optimistic situation, the lack of retail and production in the industry is expected to make up for it before June, and in the pessimistic situation, it is expected to achieve substantial positive growth in the second half of the year.
The China Automobile Dealers Association also said that as the epidemic improves in May, the previously suppressed demand for car purchases will be released. At the same time, the relevant departments of the state and local governments have successively introduced some policies to promote consumption, and automobile OEMs have also introduced support measures. Overall, vehicle sales are expected to increase month-on-month in May, and sales may fluctuate due to the uncertainty of the epidemic.
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