China Automobile Dealers Association: Automobile consumption increased by 12% in October 2020, and new energy vehicle production increased by 94% to 160,000

According to the data from the National Bureau of Statistics, the automobile production in October this year was 2.48 million units, an increase of 11%, which is a very good high growth. The added value of automobiles in October 2020 was 14.7%, which is at a recent high and better than last year's trend. The total retail sales of automobile consumer goods in October increased by 12% year-on-year, with strong growth for four consecutive months. At present, the automobile production this year is expected to grow positively, and new energy vehicles will grow rapidly year-on-year.

Sales of automobile products have improved significantly. In the face of the impact of the epidemic, the central and local governments have introduced a number of policy measures to stabilize and promote automobile consumption, and the effect is gradually showing. In October, the retail sales of automobile products of units above the designated size have continued to grow strongly year-on-year. According to the data from the China Passenger Car Association, the wholesale sales of passenger cars in October increased by 9% year-on-year, achieving stable positive growth.

The previous downturn in social consumption was mainly due to the negative growth in the auto market. Recently, the amount of auto consumption has been huge, and the effect of boosting consumption has been outstanding. Overall, stimulating auto consumption is an important opportunity to improve the manufacturing industry, and policies to stimulate auto consumption should be further implemented. In particular, stimulating first-time car purchases by car-free people is much more effective than upgrading purchases to boost consumption.

1. The automobile consumption trend rebounded significantly in October 2020

In October, the total retail sales of automobile consumer goods increased by 12% year-on-year, which is already very good. In October, the total retail sales of consumer goods reached 3857.6 billion yuan, a year-on-year increase of 4.3%, and the growth rate was 1.0 percentage point faster than the previous month. Among them, the retail sales of consumer goods other than automobiles reached 3486.8 billion yuan, an increase of 3.6%.

From January to October, the total retail sales of consumer goods reached 31,190.1 billion yuan, down 5.9% year-on-year, of which the retail sales of consumer goods other than automobiles reached 28,142.8 billion yuan, down 6.0%.

Auto consumption was relatively sluggish in 2018 and 2019, with entry-level consumption still insufficient and mid- to high-end consumption upgrading performing outstandingly. Auto consumption in 2020 was affected by the Spring Festival at the beginning of the year and then by the epidemic, but is now gradually recovering. After July, the contribution of automobiles to consumption was positive.

2. Automobile production stabilized in October 2020

In terms of products, in October, 427 out of 612 products increased year-on-year. Steel products were 118.48 million tons, up 14.2% year-on-year; cement was 241 million tons, up 9.6%; ten nonferrous metals were 5.45 million tons, up 9.0%; ethylene was 2.02 million tons, up 16.5%; automobiles were 2.481 million, up 11.1%, of which new energy vehicles were 165,000, up 94.1%; power generation was 609.4 billion kWh, up 4.6%; crude oil processing was 59.82 million tons, up 2.6%. In October this year, automobile production was 2.48 million units, up 11%, which was a large increase, and the growth rate of sedans was 8%, which was also a good high growth.

3. The added value of automobiles has stabilized at a high level in 2020

In October, the added value of industrial enterprises above designated size increased by 6.9% year-on-year, the same growth rate as in September. From a month-on-month perspective, in October, the added value of industrial enterprises above designated size increased by 0.78% over the previous month. From January to October, the added value of industrial enterprises above designated size increased by 1.8% year-on-year.

In terms of industries, in October, the added value of 34 out of 41 major industries maintained year-on-year growth. The ferrous metal smelting and rolling processing industry grew by 11.2%, and the automobile manufacturing industry grew by 14.7%.

The added value of automobiles in October 2020 was 14.7%, which is at a recent high and better than last year. The added value of the automobile industry increased by 4.9% in 2018 and 1.8% in 2019, which is lower than the average level of added value of the manufacturing industry. This year's growth rate has returned to normal levels, making a significant contribution to the stable growth of the manufacturing industry.

4. New energy vehicle production in October increased by 32% to 130,000

By product, in October, the average daily automobile sales were 80,000, an increase of 11.1%. Considering the lower growth rate of 74,000 in October 2019, this year's growth performance is relatively good.

In October, the average daily production of cars was 31,000 units, a year-on-year increase of 7.5%. In October last year, the average daily production of cars was 30,000 units. This year, due to the recovery of market demand, the production in October was relatively strong.

In the past two years, commercial vehicles have been strong, while passenger vehicles have been weak. In 2019, the consumption structure was further unfavorable to consumption. The production growth rate of sedans was low, weaker than the average growth rate of automobiles, and the production growth rate of SUVs was lower than the overall growth rate of automobiles, which became a sluggish factor that suppressed consumption.

In 2018, 1.3 million new energy vehicles were produced, a 40% increase over 2017. In 2018, 1 million new energy passenger vehicles were produced, continuing to maintain a strong high growth trend. In 2019, 1.19 million new energy vehicles were produced, with a weak growth rate of -1%. From January to October 2020, 940,000 new energy vehicles were produced, with a weak growth rate of -3%. However, the production of new energy vehicles in October was 165,000, an increase of 94%.

5. Automotive investment showed negative growth in October 2020

From January to October, the national fixed asset investment (excluding farmers) was 48,329.2 billion yuan, a year-on-year increase of 1.8%, and the growth rate was 1.0 percentage point higher than that from January to September.

In the secondary industry, industrial investment fell by 2.2% year-on-year, a decrease of 1.1 percentage points from January to September. Among them, mining investment fell by 8.4%, a decrease of 1.1 percentage points; manufacturing investment fell by 5.3%, a decrease of 1.2 percentage points; among them, automobile investment rebounded to -15.4%.

In October 2020, automobile investment rebounded significantly, and the problem of sluggish investment in the automobile industry caused by the cooling of new energy has gradually improved.

6. The squeeze effect of the car market consumption caused by the surge in housing prices continues to be strong

The hot property market from 2016 to 2019 had a great impact, and the gradual cooling in the later period promoted the auto market well. From January to October, the sales area of ​​commercial housing was 1,170.73 million square meters, a year-on-year decrease of 1.8%, and the decline was narrowed by 1.5 percentage points compared with January to August.

At present, the real estate market is booming in October, and sales in the eastern region have skyrocketed. This is also the last way to reap the benefits. The current income of residents cannot support continued high debt.

The rebound speed of the property market is relatively strong. The growth rate from June to October was surprisingly high.

The booming property market is mainly supported by residents' deposits and prepayments, and loans are also at a high level. This has a certain diversion effect on the car market's car purchase funds. The wealth effect of the property market has a certain promoting effect on the demand for high-end cars.

7. The auto market consumption in 2020 needs continuous policy support

In October, the total retail sales of consumer goods reached 3,529.5 billion yuan, up 3.3% year-on-year, of which the retail sales of consumer goods other than automobiles reached 3,142.8 billion yuan, up 2.4%.

From January to October, the total retail sales of consumer goods was 2733.24 billion yuan, down 7.2% year-on-year. Among them, the retail sales of consumer goods other than automobiles was 2465.88 billion yuan, down 7.2%. At present, the problem of sluggish consumption is still prominent, but automobile consumption has stabilized at 12%. In the future, automobile consumption should gradually pick up to support the growth of overall consumption.

The consumption of refined oil in October fell significantly, which is also due to the sales loss caused by low oil prices, but this is also a good effect in promoting auto market consumption. After all, low oil prices also lower the threshold for use.

In the overall social retail, the retail sales of goods above the quota performed strongly, which was the first reversal in recent years, reflecting that automobile consumption has a good effect in promoting overall bulk consumption.