30 million vehicles! The annual production and sales scale of China's automobiles is expected to reach a record high

In 2023, the annual production and sales scale of China's automobiles will exceed that of 2017 and hit a record high, and there is no suspense, and it is expected to exceed the 30 million mark for the first time.

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Zuo Maoxuan

The performance of China's auto market continued to improve, exceeding expectations.

On December 11, the China Association of Automobile Manufacturers (CAAM) announced that vehicle production and sales in November reached 3.093 million units and 2.97 million units, up 29.4% and 27.4% y/y, respectively.

From January to November this year, automobile production and sales reached 27.111 million units and 26.938 million units, up 10% and 10.8% y/y, respectively.

In November, the auto market continued to be hot, and with the help of consumption waves such as the "Double 11" promotion, the demand for car purchases was further released. In the same month, the production and sales of automobiles increased month-on-month and year-on-year, passenger cars continued to have a good trend, commercial vehicles maintained rapid growth, and new energy vehicles and automobile exports led the industry growth.

"With the continuous effect of the policy, the continuous development of auto shows and promotional activities in various places, coupled with the sprint of the last month of the enterprise, it is expected that the automobile market will continue to improve in December, and the phenomenon of 'warping' at the end of the year will be reproduced. Automobile production and sales are expected to hit a record high for the whole year, exceeding expectations to achieve the annual forecast target. On December 11, Chen Shihua, deputy secretary-general of the China Automobile Association, said.

Previously, the highest annual production and sales scale of Continental Automobile was created in 2017, when the production and sales of automobiles were 29,015,400 and 28,878,900 respectively.

Combined with the trend of the auto market in recent months and the phenomenon of "tail-lifting" at the end of the year, there is no suspense that the annual production and sales scale of China's automobiles will hit a record high in 2023.

If the scale of automobile production and sales continues to be at the level of about 3 million units in December, China's automobile production and sales are expected to exceed the 30 million mark this year.

However, it should be pointed out that the scale of China's automobile production and sales exceeded the 30 million mark, which is inseparable from the continuous growth of China's automobile exports in recent years. In 2017, the export volume of automobiles was about 1 million units, and this year, it is expected to exceed 5 million units for the first time.

In other words, the domestic auto market has not yet recovered to its historical peak, and the overseas market is an important driving force for the current growth of China's auto market.

The share of independent brands is nearly sixty percent

Passenger vehicle production and sales in November totaled 2.705 million units and 2.604 million units, up 7.6% m/m and 4.7% m/m and 25.6% and 25.3% y/y, respectively. The reason for the rapid growth of the month was affected by the tail factor at the end of the year on the one hand, and the low base of the same period last year on the other hand. From January to November, passenger vehicle production and sales totaled 23.441 million units and 23.272 million units, up 8% and 9.3% y/y, respectively.

Although the passenger car market has maintained a rapid growth rate, the pattern within the industry has continued to adjust in the past two years due to the acceleration of new energy vehicles to replace fuel vehicles.

In November, the market share of Chinese brand passenger cars reached 59.7%, and the market share of Chinese brands has been close to 6%, and the market share is increasing.

In the first 11 months of this year, the sales volume of Chinese brand passenger cars was 12.978 million, a year-on-year increase of 23.8%, and the market share reached 55.8%, an increase of 6.6 percentage points over the same period last year, and the growth rate was much higher than that of the market.

This year, the market share of Chinese brand passenger cars exceeded 50% for the first time (49.9% in 2022) and will exceed 55%.

Judging from the current trend, the monthly market share of Chinese brand passenger cars is expected to exceed 60% next year.

In contrast, the market share of German and Japanese automakers, which had previously achieved good development in the Chinese market, has continued to decline in the past two years.

According to the data released by the Passenger Car Association, in November this year, the top three wholesale sales of passenger car companies were occupied by Chinese brands, namely BYD, Chery and Geely, and Chinese brands accounted for 7 of the top 10.

Although FAW-Volkswagen, SAIC Volkswagen, and SAIC-GM, which have been in the top for many years, are still in the top 10, their rankings have fallen sharply compared with before. There is not a single Japanese automaker in the top 10.

In the process of accelerating the new energy transformation in the Chinese market, joint venture brands are currently facing huge market pressure. Combined with the current new energy product planning rhythm revealed by various car companies, the situation faced by joint venture car companies next year may be more severe than this year.

The production and sales of new energy vehicles exceeded one million for the first time in a single month

In November, the new energy vehicle market set another record, with monthly production and sales exceeding one million units for the first time.

Production and sales totaled 1.074 million units and 1.026 million units, up 39.2% and 30% y/y, respectively, with a market share of 34.5%.

From January to November, the production and sales of new energy vehicles reached 8.426 million units and 8.304 million units, up 34.5% and 36.7% y/y, respectively, and the market share reached 30.8%.

In addition, with the popularization of new energy vehicles in China, the structure of the new energy vehicle market is also continuously optimized.

Previously, in the initial stage of the development of new energy vehicles, China's new energy vehicle market once presented a "dumbbell" structure of "two large ends and small middle", that is, the two markets of small scooter electric vehicles and high-end electric vehicles took the lead in development, which is related to the cost and performance of batteries. However, since the beginning of this year, the new energy vehicle market has developed towards a more mature "spindle-shaped" structure, which has been recognized by more consumers in the mainstream market.

In the first 11 months of this year, among the new energy passenger vehicles, with the enrichment of model varieties, the large number of new models on the market, the price of models and other factors, A00 class cars decreased significantly year-on-year, and the sales of other levels increased to varying degrees year-on-year.

At present, the sales of new energy vehicles are still mainly concentrated in the A-class, with a cumulative sales of 3.106 million units, a year-on-year increase of 48%. At the same time, this year's B-class and C-class cars have also maintained rapid growth. The proportion of models at all levels in the new energy vehicle market is closer to that of fuel vehicles.

From the perspective of the price of different new energy models, from January to November, the sales of new energy passenger vehicles of 80,000 yuan and below showed a double-digit year-on-year decline, and the sales of more than 80,000 yuan showed positive growth year-on-year, of which 35-400,000 yuan increased the most.

At present, the sales of new energy are still mainly concentrated in the price range of 15-200,000 yuan, with a cumulative sales volume of 2.514 million units, a year-on-year increase of 57.1%. In this price range, the sales of new energy vehicles are quite close to the sales of fuel vehicles.

At present, the price of fuel vehicles is concentrated in the price range of 10-150,000 yuan. On the whole, the competitive trend of "the same price of oil and electricity" will continue, and the mainstream market of new energy vehicles will be the main market segment for new energy vehicles to further accelerate the replacement of fuel vehicles.

Next year, it may continue to maintain a strong growth trend

Despite the ongoing price war, China's auto market is expected to hit a record high this year, far exceeding industry expectations. For the trend of the auto market next year, the industry is generally optimistic.

The Federation of Passenger Cars expects that the overall retail sales of passenger cars in 2024 will be 22.2 million, an increase of 3% from 2023. If Russia's exports continue to grow strongly, considering the contribution of 4.3 million passenger car exports, the overall narrow passenger car sales will be 26.5 million units, up 5% year-on-year.

Overall, new energy vehicles will continue to grow.

The Federation of Passenger Cars is relatively optimistic about the market growth of new energy vehicles in 2024. The wholesale of new energy passenger vehicles is expected to reach 11 million, with a net increase of 2.3 million, a year-on-year increase of 22%, and a penetration rate of 40%, and new energy passenger vehicles maintain a strong growth momentum.

However, Cui Dongshu, secretary general of the passenger association, pointed out that the new energy vehicle market in 2024 will face certain pressure on the structure of demand groups.

At present, the scale of the taxi online car-hailing market is close to temporary saturation, and the congestion pressure brought by online car-hailing has increased, and the income has declined significantly. The online car-hailing market is facing problems such as platform promiscation and declining work cost performance, which is on the eve of reshuffle and optimization, and the demand for pure electric and plug-in hybrid models in the unit electric vehicle market is gradually flattening.

In the private market, the proportion of new energy in cities with purchase restrictions has declined, and the proportion of sales in small and medium-sized cities and county and township markets has increased significantly. Therefore, in the context of the current market size developing to a certain level, the growth rate will slow down. The strategy of oil and electricity parity has played a tenacious supporting role in the current market, but the profit level of related enterprises is under deep pressure in the short term.

From the perspective of industry benefits, it is difficult for enterprises that lack stable cash flow to grow sustainably. Many new energy vehicle companies are still facing certain loss pressure, and it is difficult to continue to expand the scale of loss-making car sales.

However, due to the decline in lithium carbonate prices and the fall in battery prices, the trend of oil-to-electricity conversion continues, and the price war will continue further. The situation in the fuel vehicle market is still relatively difficult, and for joint venture car companies, how to accelerate the transformation of new energy in China while ensuring that existing fuel vehicles can achieve certain profits will be a long-term issue.

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