In the future, while continuing to strengthen the core position of Shanghai's automotive industry chain, it is necessary for the industry and enterprises to seriously consider how to establish a resilient industrial chain system.
Text | Du Qiaomei
On May 10, the Association released the operation of the domestic passenger car market in April 2022. According to the data, due to the impact of the multi-point sporadic domestic epidemic, the domestic passenger car retail sales in April this year were 1.042 million units, down 35.5% year-on-year, down 34.0% month-on-month, and the year-on-year and month-on-month growth rate were at a record time in the month; the cumulative retail sales from January to April were 5.957 million units, down 11.9% year-on-year, down 800,000 units year-on-year, and the sales volume in April alone fell to 570,000 units year-on-year.
"In April, the new crown pneumonia epidemic was distributed in many places across the country, and dealers in Shanghai, Jilin, Shandong, Guangdong, Hebei and other places were affected by the entry and transaction of dealers and 4S stores." Cui Dongshu, secretary general of the Association, said.
By brand, luxury car retail sales in April were 120,000 units, down 54% year-on-year and 50% month-on-month. As 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 broken again.
Mainstream joint venture brand retail sales of 450,000 units, down 42% year-on-year and 24% month-on-month. In April, the retail share of Japanese brands was 24.5%, down 0.5 percentage points year-on-year; the share of German brands was 19.4%, down 5.2 percentage points year-on-year; the retail share of the U.S. market reached 6.4%, down 3.1 percentage points year-on-year; and the legal share of Peugeot Citroen Automobile increased by 0.4 percentage points.
The retail sales volume of independent brands was 480,000 units, down 19% year-on-year and 37% month-on-month. It is worth noting that with the decline in the share of joint ventures and luxury, the domestic retail share of independent brands reached 46.4% in April, an increase of 9.6 percentage points year-on-year; the cumulative share from January to April was 46%, an increase of 8.3 percentage points compared with the same period in 2021. Especially in the new energy market, independent brands have achieved significant increases, head enterprises have performed well, and the share of traditional car brands such as BYD Automobile, Geely Automobile, Changan Automobile and Chery Automobile has increased significantly.
At the same time, the reduction in production has also affected the export of car companies. In April, passenger car exports (including vehicles and CKD) under the statistical caliber of the Association of Passenger Vehicles were 91,000 units, down 17% year-on-year and 15% month-on-month.
In terms of new energy vehicles, the retail sales of new energy passenger cars in April were 282,000 units, up 78.4% year-on-year and down 36.5% month-on-month. From January to April, domestic retail sales of new energy passenger vehicles were 1.352 million units, up 128.4% year-on-year.
It is worth noting that although the year-on-year decline is larger, compared with traditional fuel vehicles, the penetration rate of new energy vehicles continues to increase. The domestic retail penetration rate of new energy vehicles in April was 27.1%, an increase of 17.3 percentage points from 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%.
From the model point of view, the pure electric wholesale sales in April were 214,000 units, an increase of 39.9% year-on-year; plug-in hybrid sales of 66,000 units, an increase of 96.8% year-on-year, to a certain extent, which verified the market prediction of some manufacturers that "plug-in hybrid is the first step in the transformation of oil vehicle potential passengers"; the "dumbbell type" structure of the pure electric market has improved, and the wholesale sales of A00 grade have been 78,000 units, down 34% month-on-month, accounting for 37% of the share of pure electric; and the wholesale sales of A0 are 44,000 vehicles, accounting for 20% of the share of pure electric A-class electric vehicles accounted for 27% of the pure electric share; sales of B-class electric vehicle models fell 29% year-on-year and 73% month-on-month.
In April, the trend of the new energy passenger car market diverged, and BYD's pure electric and plug-and-mix dual drives consolidated the leading position of its own brand new energy; traditional car companies represented by Chery Group and GUANGZHOU AUTOMOBILE Group performed relatively prominently in the new energy sector. In terms of traditional car companies, BYD, SAIC-GM-Wuling, Chery Automobile, and GAC Aean achieved new energy sales of more than 10,000; in terms of new forces, the sales of new forces such as Xiaopeng, Ideal, Nezha, Zero Run, Weilai, and Weima were less than expected year-on-year and month-on-month, especially the month-on-month decline of Xiaopeng, Ideal, and Weilai in the first camp was larger.
Driving consumption is key
For sales in May, the Association said that due to the new crown pneumonia epidemic and the Crisis in Ukraine, the risks and challenges exceeded expectations, and 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 continue to face 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, some service industries are running sluggishly, the income of residents under the epidemic has declined, the purchasing power of consumption in the automobile market has been damaged, and the willingness to buy cars has declined in the near future.
However, with the gradual resumption of work and production, Changchun's automobile manufacturing capacity was quickly revived in May, some enterprises in Shanghai gradually resumed production in mid-to-late April, and the supply problem was gradually improved.
On the consumer side, the delayed consumer demand in March and April should have a certain release, which is conducive to the gradual recovery of sales in May. During the May Day period, orders and deliveries have improved significantly compared with April, but compared with the same period last year, there is still a year-on-year decline of more than 30%, the market recovery pressure is relatively large, and it is expected that there will be a large negative year-on-year growth in sales in May.
However, due to the impact of high oil prices, more consumers will be inclined to buy new energy vehicles, so it is expected that the retail sales of new energy vehicles in May will achieve high growth compared with April.
"At present, the national passenger car domestic retail market in the first four months has suffered a lot of losses, and to achieve the goal of 5% retail retail growth in 2022, it will take the average monthly retail sales in May to December to increase by 100,000 units year-on-year." Considering the value of the contribution of the automobile and its related industries to GDP and the size of the workforce, we do not want retail sales to grow negatively throughout 2022, so we still need to jointly increase efforts to promote consumption. Cui Dongshu pointed out that promoting consumption is the key to recovering losses.
Cui Dongshu said that due to the meticulous deepening management of epidemic control, the current automobile consumption environment is under great pressure. Some dealers are facing severe measures such as store closures, and some consumers show a hibernating mentality of consumption contraction. Boosting consumer confidence requires a concerted effort.
According to the statistics of the China Automobile Dealers Association, more than 20% of the car dealers in the country have recently closed their stores. Once the auto 4S store is closed, it will lead to the interruption of the dealer's passenger flow, and it will be difficult to complete the whole process of sales such as car viewing, inquiry, test drive, and car ordering, and the demand for car purchase will be seriously restricted. Although there are measures such as live car sales to retain the customer's car purchase enthusiasm, offline communication is still an important guarantee for the transaction.
Therefore, under the trend of normalization of the epidemic, we should increase the business stability of automobile 4S stores, and give certain shopping coupons and other consumption promotion measures to stimulate car purchase consumption under the epidemic, improve the automobile consumption environment, and enhance consumer confidence.
The resilience of the industrial chain needs to be strengthened
"The impact of the shanghai epidemic on the supply side of automobiles is huge. As a parts distribution center, a large number of parts and components companies gather around Shanghai, accounting for more than 80% of the shares of many parts. Cui Dongshu said that due to the inability of personnel to arrive at the post, the current recovery status of the parts industry around Shanghai is poor, and only 50%-60% of the production capacity is restored.
Shanghai has always been the industrial chain hub of the national automobile manufacturing system, which is the result of the good layout of the vehicle and parts system cultivated by the Shanghai automobile industry for decades. In particular, European and American parts and components enterprises took the lead in layout, and spilled technology to Jiangsu and Zhejiang independent parts and components enterprises, so historical reasons coupled with the advantages of the industry, Shanghai evolved into a hub of the national automotive industry community.
"At present, the bottleneck facing the automotive industry should be parts, not the recovery of production capacity of OEMs. The comprehensive resumption of work and production in Shanghai is a sign that the automotive industry has resumed work and production back to its original position. Cui Dongshu told the think tank Jun that the Shanghai epidemic is expected to have an impact of about 40% on national automobile sales.
According to the data, passenger car production in April was 969,000 units, down 41.1% year-on-year and 46.8% month-on-month, and the pressure was enormous. 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.
Among them, the production of the five major car companies in Shanghai fell by 75% month-on-month, the production of the joint venture main car companies in Changchun fell by 54% month-on-month, and the overall decline in other regions was 38%, and the national radiation effect of the parts system in Shanghai was highlighted.
"The aggregation of the industrial chain needs to be further strengthened to ensure the resilience of the industrial chain." Cui Dongshu suggested that while continuing to strengthen the core position of Shanghai's automotive industry chain in the future, the industry and enterprises need to seriously consider how to establish a resilient industrial chain system.
On the one hand, enterprises should strengthen the resilience of the supply chain and improve the strategic planning, management and execution of the supply chain.
On the other hand, enterprises urgently need to establish effective risk monitoring capabilities in the existing supply chain system to quickly and accurately assess the impact of major risks on their sales and profits, and formulate corresponding emergency measures. Enterprises need to improve the corresponding core capabilities: supply chain strategic design, dynamic integration of supply chain planning, end-to-end supply chain data transparency and collaboration, and optimization of operating models.