China Passenger Car Association: Analysis of my country's passenger car production capacity issues in 2021

After three years of continuous negative growth, it finally turned to positive growth. According to statistics released by the Passenger Car Market Information Joint Committee, domestic automobile manufacturers sold 21.456 million broad passenger cars (including micro cars) in 2021 , a year-on-year increase of 6.6% .

By the end of 2021 , the national passenger car production capacity totaled 40.89 million vehicles, with a capacity utilization rate of 52.47% . Although it was 4% higher than 48.45% in 2020 , it is still in a serious overcapacity range.

According to the statistics of the China Passenger Car Association, there are 86 companies with sales in 2021. The total production capacity of these companies is 37.038 million vehicles, and the corresponding overall capacity utilization rate is 57.93% . It can be seen that among the total passenger car production capacity, the remaining companies have 3.85 million vehicles of production capacity that are completely idle.

The capacity utilization analysis of 86 enterprises is as follows.

Table 1 is the result of analyzing the overall situation of enterprise capacity utilization by sorting them by sales volume.

Table 1 Analysis of passenger car production capacity by company sales in 2021

The 16 companies with sales of more than 600,000 vehicles had a total sales of 16.6106 million vehicles, accounting for 77.42% of the total sales, and a total production capacity of 20.39 million vehicles, accounting for nearly 50% of the total production capacity. The average capacity utilization rate of these 16 companies was 81.03% , which was within a reasonable range.

The combined sales of the 22 companies with sales of more than 200,000 vehicles accounted for 88.86% of the total sales , leaving the other 64 companies with a market share of less than 13% .

There are 29 companies with sales of less than 10,000 vehicles. The production capacity of these companies accounts for 13% of the total , while their sales account for only 0.46% of the total , and the average capacity utilization rate is only 2.02% .

Even within each range of sales data, the capacity utilization rates of specific companies vary greatly.

Table 2 is the result of analyzing the overall situation of enterprise capacity utilization by sorting the enterprise capacity utilization values.

Table 2 Analysis of passenger car production capacity in 2021 by enterprise capacity utilization rate

The capacity utilization rate of 11 companies is higher than 100 % , which means they have basically been running three shifts and have to work overtime on weekends. Among the 11 companies, 6 are wholly foreign-owned or joint ventures in China, and 5 are domestic companies. In 2021 , the capacity utilization rate of 4 new energy vehicle companies exceeded 100% , including Tesla.

The capacity utilization rates of 8 companies are between 80% and 100% , including 3 joint ventures and 3 new energy vehicle companies , and their production capacities are normal.

The capacity utilization rates of 10 enterprises are between 60% and 80% , of which 4 are joint ventures , which should mean they have surplus capacity.

The capacity utilization rates of the four companies are between 40% and 60% , among which three mainstream automobile companies have reduced their capacity utilization rates due to a sharp drop in sales in recent years.

The remaining enterprises definitely have excess capacity, or even serious excess capacity. In particular, the capacity utilization rate of 29 enterprises is less than 10% . These small-scale enterprises with low sales volume not only have serious excess capacity, but also many enterprises are still experiencing negative growth when the industry has a 6.6% growth. Without fundamental changes, it is basically hopeless for these enterprises to reverse the situation of excess capacity.

In the context of overall overcapacity in passenger vehicle production capacity, companies that already have production qualifications have 10.46 million units of production capacity under construction that will be completed and put into production one after another.

In 2021 , sales of new energy passenger vehicles reached 3.326 million, while the dedicated production capacity of new energy passenger vehicles has reached 5.695 million, with a capacity utilization rate of 58.4% . Most of the capacity under construction is new energy vehicles, and part of the existing capacity of traditional automobile companies can also be used to produce new energy vehicles on the same line.

Therefore, while solving the problem of overcapacity in traditional automobiles, the automobile industry must also prevent overcapacity in new energy vehicles.