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The Automotive Industry Has Entered A Stage Of High Quality Development
- Feb 04, 2019 -

According to the latest data released by the China Association of Automobile Manufacturers, although China's automobile production and sales have experienced negative growth for the first time in 28 years, they have ranked first in the world for 10 consecutive years.This also marks the growth stage of China's auto industry entering the brand up and high quality development. In the opinion of industry experts, although China's auto market may take three years to adjust, the growth potential is still there, and the prospect is worth looking forward to.

Production and sales for the first time in 28 years of negative growth

The data shows that in the whole year of 2018, China's automobile production and sales completed 27.809 million units and 28.081 million units respectively, and the production and sales volume decreased by 4.2% and 2.8% respectively compared with the same period of the previous year. In the first half of the year, except for February, sales in the remaining months were higher than the same period in 2017.In the second half of the year, the auto market continued to experience negative growth, with the annual growth rate dropping to 2.8%. This has also become the first negative growth in China's automobile production and sales since 1990.

"In 2018, China's auto industry is facing greater pressure. The growth rate of production and sales is lower than expected at the beginning of the year. The growth rate of major economic efficiency indicators in the industry has slowed down and the growth rate has dropped."Chen Shihua, assistant secretary-general of the China Automobile Association, said that on the one hand, due to the impact of the full exit of the small-displacement automobile purchase tax preferential policy; On the other hand, due to the decline in macroeconomic growth rate and consumer confidence, it is still facing greater pressure in the short term.

"In the domestic automobile market in 2018, the passenger car experienced a sharp decline, especially the SUV's decline was more serious, which dragged down the overall downturn of the car market."According to Cui Dongshu, secretary-general of the National Passenger Vehicle Market Information Association, the passenger car market has experienced a serious decline. Although it meets the high-volume and high-volatility volatility expectations, many complicated factors have adversely affected the auto market.

The data shows that the four types of passenger cars have experienced negative growth in 2018, and the cross-type market continues to shrink.Among them, the production and sales of cars decreased by 4% and 2.7% respectively compared with the same period of 2017; the production and sales of SUV decreased by 3.2% and 2.5% respectively compared with the same period of 2017; the production and sales of MPV decreased by 17.9% and 16.2% respectively compared with the same period of 2017; cross-type passenger car production and sales decreased by 20.8% and 17.3% respectively over the same period of 2017.

In 2018, the self-owned brand passenger cars showed a downturn overall.Statistics show that in 2018, a total of 9.98 million self-owned brand passenger cars were sold, down 8% from the same period last year, accounting for 42.1% of total passenger car sales, down 1.8 percentage points from the same period in 2017.Among them, the sales of cars was 2.399 million, an increase of 1.9% year-on-year, accounting for 20.8% of the total sales of cars, an increase of 0.9 percentage points over the same period of 2017;SUV sales of 5.8 million units, down 6.7% year-on-year, accounting for 58% of total SUV sales, down 2.6 percentage points over the same period in 2017;MPV sales were 1.328 million units, down 23.1% year-on-year, accounting for 76.6% of total MPV sales, down 6.9 percentage points from the same period in 2017.

“In 2018, the decline in the domestic auto market was mainly due to the sharp decline in production and sales of self-owned brands.”In Cui Dongshu's view, consumption upgrading is a clear highlight of the auto market in 2018. The low-end consumption in the middle and low-end has caused the overall sales of independent brands to be sluggish.

"At present, China's auto industry is still in the period of popularization, and there is a large room for growth. The auto industry has entered the growth stage of brand-oriented and high-quality development." Chen Shihua said.

whether the 2019 car market "recover warm"

For the trend of the domestic automobile market in 2019, the China Automobile Market Forecast Report released by the China Automobile Association believes that China's automobile market will stop growing. It is estimated that the automobile sales volume will be 28 million units, which is the same as that in 2018, with a growth rate of zero.

The "Report" predicts that passenger cars are expected to sell 23.6 million units in 2019, which is the same as in 2018; commercial vehicles are expected to sell 4.4 million units, a slight increase of 1%.

"China's auto market needs about three years to ease, but the requirement needs to exist."Xu Haidong, assistant secretary-general of the China Automobile Association, said that as of the end of 2017, the number of cars per 1,000 people in China was 156, far lower than that of the developed countries such as the United States and Japan. As the country’s economic development and people’s income increase, cars still have larger Growth space. At the same time, the sustained and steady growth of our population continues to provide new car buyers.

Compared with the "zero growth" judgment of the China Automobile Association, the Travel association is optimistic.

"The recently held Central Economic Work Conference has identified seven key tasks for 2019: first, to promote high-quality development of manufacturing; second, to promote the formation of a strong domestic market; third, to promote the rural revitalization strategy; fourth, to promote regional coordinated development; The fifth is to accelerate the reform of the economic system; the sixth is to promote all-round opening up; the seventh is to strengthen security and improve people's livelihood. Compared with the Central Economic Work Conference held in 2018, the meeting has highlighted development and market." In Cui Dongshu's view, The Central Economic Work Conference will have an important positive impact on boosting the auto market in 2019.

"The Central Economic Work Conference emphasized that while fully affirming the achievements, we must see that the economic operation is stable and volatile, the external environment is complicated and severe, and the economy is facing downward pressure.We believe that the word 'worry' in ‘Change in stability, worry in change ' reflects the central government’s high priority for short-term steady growth pressure to prevent employment risks brought about by the rapid economic downturn. This is a forward-looking risk-predictive judgment that will help to resolve risks early." Cui Dongshu said.

“Automobile is one of the most important commodities in the domestic market and a basic tool to promote market consumption.At a time when the external economic environment is deteriorating and the anti-globalization tide is surging, China's acceleration of the formation of a strong domestic market is not only the need of economic development, but also the requirement to maintain strategic strength.Expanding consumption and boosting investment are good ways to deal with export pressures.Strengthening the development of production and sales in the automobile industry is an important opportunity to build a domestic large market from both ends of supply and demand and to change the export-oriented economy that relies on the United States as an internal demand. ”Cui Dongshu believes that "if the automobile market rebounds in reverse in 2019, it will help to adjust the economy, stabilize consumption, and boost confidence."

"There should be confidence in the future growth of the automobile market. Confidence is more important than gold, and consumer confidence should be established." Cui Dongshu believes that the high base factor affecting the growth of the automobile market in 2019 and the impact of the growth of the property market will be alleviated.

"At present, the car is the only consumer product that has not been fully satisfied in China. In 2018, the overall demand of the automobile market was severely weak, and there was a serious negative growth. This is a low base, which is conducive to the growth of the automobile market in 2019." Cui Dongshu said.

New energy vehicles stand out

It is noteworthy that the "China Auto Market Forecast Report for 2019" issued by the China Automobile Association agrees with the Travel association that there is a model that will continue to maintain rapid growth in 2019, namely new energy vehicles.

Data show that in 2018, China's new energy vehicle production and sales completed 1.27 million and 1.256 million, respectively, an increase of 59.9% and 61.7% over the same period in 2017.Among them, the production and sales of pure electric vehicles were 986,000 and 984,000 respectively, up 47.9% and 50.8% respectively over the same period of 2017; The production and sales of plug-in hybrid vehicles were 283,000 and 271,000, respectively, an increase of 122% and 118% respectively over the same period in 2017.

"In 2019, China's new energy vehicles are expected to sell 1.6 million units, an increase of 33.3% year-on-year." Xu Haidong said that the changes in production and sales of new energy vehicles are highly correlated with subsidy policies.In 2019, the reduction in subsidies will certainly have an impact on the sales of new energy vehicles, but the completion of the sales target of 1.6 million vehicles will still be a high probability event.

"Overall, in 2018, the production and sales of new energy vehicles in China exceeded 1.2 million units, which is a good result.If the subsidy policy of 2019 can continue the continuation period in January 2018, the transition period from February to May, and impose reasonable subsidy standards, new energy vehicles will continue to develop rapidly." Cui Dongshu said.