Domestic brands emerge in the auto market

Compared with the double-digit growth in 2016, China's auto market showed a clear slowdown in growth in the first half of the year.

The latest data from the China Association of Automobile Manufacturers shows that in the first half of 2017, my country's automobile production and sales were 13.5258 million and 13.3539 million respectively, up 4.64% and 3.81% year-on-year, and the overall growth rate slowed down. Among them, the production and sales of passenger cars in the first half of the year were 11.4827 million and 11.253 million respectively, up only 3.16% and 1.61% year-on-year, and the growth rate slowed down by 4.16% and 7.62% compared with the same period last year. Data from the China Passenger Car Association shows that from January to June this year, the sales volume of broad passenger cars was 10.8 million, down 0.2% year-on-year. This is the first time in 13 years since 2005 that the sales volume of my country's passenger car market in the first half of the year has declined.

Undoubtedly, the Chinese auto market, which has ranked first in the world in production and sales for eight consecutive years, has now entered a slow-moving channel. Under this, the auto market is undergoing a top-down, inside-out "de-bubble" adjustment.

Traditional car market must be broken before it can be rebuilt

Although the growth rate of the auto market has slowed down to varying degrees, the traditional top three sales companies, SAIC Volkswagen, SAIC GM, and FAW-Volkswagen, still firmly occupy the position of the first group of domestic auto companies. However, due to the large base, the growth of SAIC Volkswagen, FAW-Volkswagen, and SAIC GM has begun to show weakness in the cold market. For example, SAIC Volkswagen achieved sales of 970,000 vehicles in the first half of this year, which is basically the same as the same period last year. Compared with the previous double-digit growth, this is also a slow growth after the sales growth of 0.25% in the first half of 2015 and the slight increase of 2.88% in the first half of 2016.

Compared with the steady progress of the top three, domestic brands and Japanese brands have become the biggest highlights of the auto market in the first half of the year. According to statistics from the China Association of Automobile Manufacturers, in the first half of 2017, the sales of Chinese brands, German brands, Japanese brands, American brands, Korean brands and French brands were 4.939 million, 2.275 million, 1.989 million, 1.352 million, 431,000 and 188,000 respectively, accounting for 43.9%, 20.2%, 17.7%, 12%, 3.8% and 1.7% of the total passenger car sales respectively. Among them, Japanese brands have the fastest growth rate, with a market share of 2.3 percentage points higher than the same period last year, and Dongfeng Honda has achieved a 34.9% increase. Compared with Japanese brands, domestic brands have also achieved a 1.14% increase in market share, among which Geely's growth rate in the first half of the year was as high as nearly 90%, and the sales of 550,200 vehicles also increased its market share among domestic brands from 6.46% in the first half of last year to 11.14% in the same period this year. At the same time, the company also raised its full-year sales target by 10% to 1.1 million vehicles, and SAIC Passenger Vehicle's year-on-year growth of 113% was even more eye-catching, with sales of 233,600 vehicles in the first half of the year.

The strong growth of domestic and Japanese brands has made it increasingly difficult for some niche brands to survive. Some Korean and French brands that are in trouble have entered the "cold winter" ahead of schedule. Data shows that from January to June, Dongfeng Peugeot Citroen Automobile sold 147,800 vehicles, a year-on-year decline of 48%. Compared with its production and sales target of 700,000 vehicles, its target achievement rate in the first half of the year was only 21%. Beijing Hyundai's sales in the first half of the year fell by 42.4%, relegating to 13th place in overall sales.

Judging from the current situation in the Chinese market, some brands have reached the countdown stage of life and death. Although some brands have broken through for several years, the results are still not good. "The trend of industrial development is unstoppable. Whoever grasps the trend and follows the trend will occupy the market and survive. On the contrary, if you can't survive, it is inevitable to withdraw from the Chinese market. There are precedents before, such as Daihatsu and Peugeot, and Peugeot came in later." An industry insider commented.

It is gratifying that despite the cold market in the first half of 2017, sales in June have increased significantly. "The rebound in June is a good sign, indicating that the overdraft in the auto market caused by the purchase tax policy last year is gradually being digested and has returned to normal in June." In the view of Shi Jianhua, deputy secretary-general of the China Association of Automobile Manufacturers, the rebound in sales in June is an important signal of the recovery of the auto market.

New energy regulation starts

Although the overall auto market is growing slowly, new energy vehicles, as an emerging industry, have given China's auto market new growth momentum. Data shows that in June, the production and sales of new energy vehicles reached 65,000 and 59,000 respectively, up 43.4% and 33.0% year-on-year, and up 25.9% and 30.1% month-on-month respectively; in the first half of the year, the production and sales of new energy vehicles reached 212,000 and 195,000 respectively, up 19.7% and 14.4% year-on-year respectively. From the perspective of auto companies, BYD, BAIC New Energy, and FAW Toyota occupied the top three sales in the first half of the year, and from the perspective of plug-in hybrid, pure electric, and ordinary hybrid technologies, each company represents a technical direction, and new energy has entered the "Three Kingdoms" era.

Compared with the annual sales target of 800,000 vehicles, the cumulative sales of 195,000 vehicles in the first half of the year are less than 1/4 of the annual target. This is related to the adjustment of the subsidy policy for new energy vehicles, which almost stagnated sales in January. At the same time, the high base in the second half of last year may bring considerable pressure to this year's sales growth rate. Industry experts pointed out that the sales volume in the second half of last year accounted for 55%, which was significantly higher than the level in previous years, and the policy environment was weaker than last year, and the market growth rate expectations may face downward adjustments. Regarding the sales of new energy vehicles in 2017, Xu Yanhua, deputy secretary-general of the China Automobile Association, said that there are many factors that affect the market situation of the new energy vehicle industry in 2017, such as policy adjustments such as subsidies and access, and there are both central and local policies, and the adjustment of policies will have a certain lag effect. With the stability of policies and markets, it is basically not a big problem to achieve the annual sales target of 700,000 vehicles. If sales can explode, the expected target of 800,000 vehicles will be achieved.

While the production and sales of new energy vehicles have maintained rapid growth, the policy side has sent out various adjustment signals. From improving policies on automobile investment, to the draft for comments on the dual-credit management method, to the "Recommended Model Catalog for the Promotion and Application of New Energy Vehicles", "Catalog of New Energy Vehicle Models Exempted from Vehicle Purchase Tax", and "Announcement on Road Motor Vehicle Production Enterprises and Products", the new energy vehicle industry has once again ushered in a series of policy dividends in June and July. In June, the National Development and Reform Commission and the Ministry of Industry and Information Technology jointly issued the "Opinions on Improving the Management of Automobile Investment Projects", and the Ministry of Industry and Information Technology drafted the "Parallel Management Methods for Passenger Car Enterprises' Average Fuel Consumption and New Energy Vehicle Credits (Draft for Comments)", and the industry believes that the new energy vehicle industry has ushered in a mid-term turning point. From a policy perspective, the government's second wave of policy support for new energy vehicles has arrived, and this time the policy support is more sustainable and high-intensity.

While favorable policies are frequently released, the new energy vehicle market has also ushered in its first large-scale cleanup. Not long ago, the Ministry of Industry and Information Technology announced the 297th batch of "Road Motor Vehicle Production Enterprises and Products" announcement, of which 3025 new energy vehicles did not comply with the management regulations of the "Announcement" and were suspended from production and sales from the date of the announcement, involving a total of 243 domestic new energy vehicle companies. It is generally believed in the industry that the current development of new energy vehicles in my country is still in a critical stage of climbing over hurdles and overcoming difficulties. This conveys a clear message to the outside world: the new energy vehicle market will be strictly regulated. The number of companies and vehicles involved in this suspension announcement is the largest in the past two years. Among them, a large part of the catalog suspension is due to the abandonment of the application by car companies.

"Judging from the market performance in the past five years, the market's cycle of rising and falling back takes about half a year, and then enters the bottoming stage in July and August, and then begins to rebound. Even if the market enters the trough period, it will still grow steadily." In response to such industry voices, we hope that the auto market in the second half of the year will still have bright spots worth looking forward to.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.