China Automobile Dealers Association: Automobile retail sales are expected to reach 1.955 million units in October 2020

The consumption environment continued to improve in September, and the retail market grew steadily

With the stable recovery of the macro economy, the auto market has entered the traditional peak sales season. Driven by the national "Consumption Promotion Month" held by the Ministry of Commerce, local auto shows, car purchase subsidies, dealer profit concessions and other marketing activities are in full swing, supporting the continued recovery of auto market consumer demand. In September, narrow passenger car retail sales further increased month-on-month, reaching 1.913 million units, a year-on-year increase of 7.5%.

The positive trend of the auto market will continue in October

On the basis of the improvement of the domestic epidemic prevention and control situation, the consumption demand of the service industry will be steadily released in the fourth quarter. Investment in infrastructure will continue to play a strong role in supporting the economy under the impetus of stimulus policies. The recovery of overseas demand will promote exports to maintain a positive trend. The enthusiasm for the introduction of local stimulus policies has not diminished, and it has penetrated into the district and county markets. Manufacturers and dealers continue to promote sales and promotion. Overall, the external environment of the auto market continued to improve in October, and the retail market is expected to continue to grow steadily.

1. Manufacturer sales trends

Terminal monitoring results show that the overall market discount rate has been about 16.1% since October, which is basically the same as last month. Manufacturers are striving to achieve their annual sales targets, and there is a trend of increasing marketing and promotion efforts. According to dealer surveys, the manufacturer's retail target in October this year increased by 6.4% year-on-year, accounting for about 80% of the overall market sample volume. It is preliminarily estimated that the narrow passenger car retail market this month is around 1.955 million vehicles, an increase of about 6.0% year-on-year.

2. Weekly trend analysis

The average daily sales of major manufacturers increased by 5.7% and 15.3% year-on-year in the first and second weeks, respectively, with a cumulative increase of 12.0%. Driven by the October Golden Week promotion, the retail market showed a good start. It is expected that the sales in the third week will maintain the strong performance of the first two weeks, with an average daily growth of about 17.0% year-on-year. The sales growth rate in the fourth week is expected to be 5.7% year-on-year, but due to the increase of 2 days compared with the same period last year, the average daily sales volume was about -29.5% year-on-year. It is estimated that the retail sales in October will reach 1.955 million vehicles.

3. The economy is recovering steadily and the momentum of the auto market is increasing

According to data from the National Bureau of Statistics, the total retail sales of consumer goods in September increased by 3.3% year-on-year, of which the year-on-year growth rate of automobiles exceeded 11%, showing a good recovery trend. The intensity of the introduction of local consumption promotion policies has reached its peak in the recent period, and most of them have been implemented at the district and county level. The subsidy amount has also increased slightly compared with the middle of the year, which has a more direct impact on car purchases. Investment and infrastructure continue to deepen and consolidate, driving the domestic economy to stabilize and improve. With the accelerated recovery of the service industry in the fourth quarter, residents' income expectations have increased significantly. Entering the fourth quarter, the pressure on various automobile manufacturers to achieve their annual sales targets has increased, and the intensity of marketing and promotion has basically maintained the previous level, promoting the further release of consumer demand. The continuous improvement of the external environment and domestic demand has prompted the recovery of the automobile market to enter the fast lane.

In summary, the market expects the retail sales of narrow passenger cars to reach 1.955 million units in October, a year-on-year increase of about 6.0%. Driven by the policy of stabilizing growth, the macro-economy, auto market policies and market factors continue to provide positive support to the auto market. The current epidemic prevention and control is still in a critical period of preventing external imports and internal rebound. The international environment is becoming increasingly complex and changeable, which has brought many uncertainties to the rapid recovery of the domestic economy. In addition, terminal inventory should also be wary of the huge pressure brought by the concentrated rush at the end of the year.