Passenger Car Association: Retail sales of 1.042 million units in the passenger car market in April, down 35.5% year-on-year

Yinsimmon Finance learned from the Association that the retail sales of the passenger car market reached 1.042 million units in April 2022, down 35.5% year-on-year and 34.0% month-on-month, and the retail sales growth rate in April was at a record for the month. From January to April, the cumulative retail sales of 5.957 million units decreased by 11.9% year-on-year and 800,000 units year-on-year, of which the impact of 570,000 units in April was greater.

According to the association, the new crown pneumonia epidemic spread in many places in April, 29 provinces across the country reported confirmed cases or asymptomatic infected people in April, and dealers in Shanghai, Jilin, Shandong, Guangdong, Hebei and other places were affected by the entry and transaction of dealers 4S store customers. Retail sales fell more sharply in April, and the comparable monthly growth rate of the year-on-year growth rate is the 40% year-on-year decline in retail sales in March 2020.

Specifically, luxury car retail sales in April were 120,000 units, down 54% year-on-year and 50% month-on-month. The luxury vehicle sales area was affected by the changes in the epidemic prevention and control situation, the production and sales losses were huge, and the original tight balance between supply and demand was once again broken. In April, self-owned brand retail sales of 480,000 vehicles, down 19% year-on-year and down 37% month-on-month. The domestic retail share of independent brands in April was 46.4%, an increase of 9.6 percentage points year-on-year, and the cumulative share from January to April was 46%, an increase of 8.3 percentage points compared with the same period in 2021. The wholesale market share of independent brands in April was 57.7%, an increase of 16.2 percentage points over the same period last year, and the cumulative share of independent brands from January to April was 48%, an increase of 6.7 percentage points compared with the same period in 2021. Autonomy has gained significant increments in the new energy market, the performance of head enterprises has been excellent, and the brand share of traditional car companies such as BYD Automobile, Geely Automobile, Changan Automobile and Chery Automobile has increased significantly.

In terms of joint venture brands, the mainstream joint venture brand retailed 450,000 units in April, down 42% year-on-year and 24% month-on-month. The retail share of Japanese brands in April was 24.5%, down 0.5 percentage points year-on-year. The share of Ashkenazi brands was 19.4%, down 5.2 percentage points year-on-year. The retail share of the US market reached 6.4%, down 3.1 percentage points year-on-year. The legal share of DPCA and other companies increased by 0.4 percentage points.

In terms of production, passenger car production in April was 969,000 units, down 41.1% year-on-year and 46.8% month-on-month. Among them, the production of luxury brands fell by 57% year-on-year and 43% month-on-month; the production of joint venture brands fell by 56% year-on-year and 58% month-on-month; and the production of independent brands fell by 20% year-on-year and 38% month-on-month.

The Association pointed out that due to the shortage of imported parts affected by the epidemic, the suppliers of domestic parts systems involved in the Yangtze River Delta region could not supply in time, and some even completely stopped work and operation, coupled with the reduction of logistics efficiency and uncontrollable transportation time, resulting in prominent production problems. In April, the production of the five main car companies in Shanghai fell by 75% compared with March, the production of the joint venture main car companies in Changchun fell by 54%, and the overall decline in other regions was 38%, and the national radiation effect of the parts system in Shanghai was highlighted.

In terms of new energy vehicles, the wholesale sales of new energy passenger vehicles reached 280,000 units in April, an increase of 50.1% year-on-year and a decrease of 38.5% month-on-month, and the decline was abnormal, and the development of new energy was also affected and impacted by the current epidemic. From January to April, the wholesale number of new energy passenger cars was 1.469 million units, an increase of 119.0% year-on-year. Retail sales of new energy passenger cars reached 282,000 units in April, up 78.4% year-on-year and down 36.5% month-on-month, different from the trend in April of the calendar year. From January to April, domestic retail sales of new energy passenger vehicles were 1.352 million units, up 128.4% year-on-year.

In terms of the new energy vehicle market, it has not yet been affected by the price increase, and the order performance before the price increase is hot, and the order is sufficient. In April, the month-on-month trend of new energy vehicles and traditional fuel vehicles was affected by production, and the shortage of new energy vehicles intensified, resulting in serious delays in undelivered orders. The strong growth of new energy vehicles driven by private car travel under the epidemic situation is of great significance, and the safe travel of the second car of the family is of great significance, echoing the further recognition and adaptation of urban residents to new energy models in short-distance travel.

In terms of new energy vehicle retail, the domestic retail penetration rate of new energy vehicles in April was 27.1%, an increase of 17.3 percentage points compared with the penetration rate of 9.8% in April 2021. In April, the penetration rate of new energy vehicles in independent brands was 54.4%, and the penetration rate of new energy vehicles in luxury vehicles was 5.5%, while the penetration rate of new energy vehicles in mainstream joint venture brands was only 3.7%.

Outlook for the national passenger car market in May

According to the Association, there are 20 full-month working days in May, one more day than in May 2021. Due to the May Day holiday and the early leave in April under the interference of the epidemic, the number of working days in May has increased, which is conducive to the increase in production and sales in May. Due to the increase in risks and challenges caused by the new crown pneumonia epidemic and the conflict between Russia and Ukraine, the country is facing new challenges such as stable growth, stable employment and stable prices, and the supply and demand ends of the automobile market are also facing continuous severe challenges.

From the supply side, the PPI in March rose by 8.3% year-on-year, the loss of nickel ore price fluctuations in the early stage exceeded expectations, coupled with the increase in lithium ore prices, the reduction of transportation efficiency and transportation costs in individual regions, and the cost of domestic car companies has risen significantly. From the demand side, with the decline in the market value of Chinese stocks and domestic stock markets, the sluggish operation of some service industries, the decline in residents' income under the epidemic, the damage to the purchasing power of consumer consumption in the automobile market, and the decline in the willingness to buy cars in the near future.

The Association pointed out that at present, the high point of the domestic epidemic has passed, the resumption of work and production is gradual, and the support policy has accelerated. Changchun's automobile manufacturing capabilities were quickly revived in May. The resumption of work and production of some enterprises in Shanghai began in mid-to-late April, and the supply in May is facing a state of gradual improvement, which will meet the normal supply demand of the industrial chain as soon as possible. At present, the automotive industry chain enterprises have gradually changed from "fire-fighting" emergency response to normalized high-resilience supply chain management.

The HKCC expects a complex marketing environment in 2022. Compared with the multi-point sporadic epidemic in 28 provinces and cities in April, the state of May will be significantly improved, and the delayed consumer demand in March and April should be released to a certain extent, which is conducive to the gradual recovery of retail sales in May. For the Market in May, the orders and deliveries in the first week of "May Day" have improved significantly compared with April, but there is more than 30% year-on-year decline in "May Day" last year, the market recovery pressure is still very large, and Beijing, Zhengzhou and other places affected by the epidemic, the implementation of strict epidemic prevention policies, May is estimated to have a large negative growth compared with last year.

The Association also said that in the current environment, independent driving has become the first choice, and due to the impact of high oil prices, more people will choose to buy new energy vehicles. The supply of new energy vehicles in May will improve significantly month-on-month, and it is expected that the retail sales of new energy vehicles in May will be high growth compared with April.