Car market correct callback period

Last year, the growth rate of China's auto production and sales dropped significantly, which is a huge contrast to the rapid growth of 30% or even 50% in previous years. The market has undergone a significant correction, although it has been affected by changes in the economic environment at home and abroad. But more importantly, under the background of rapid growth and policy stimulus in previous years, the development of the automotive industry has the necessity and necessity of a short-term correction. Surprisingly, it is in line with the laws of the development of the industry.

Rise in the ratio of deposits and sales Surges in supply and demand surfaced In 2009 and 2010, China’s auto market maintained an ultra-high growth of more than 30%, and the market has doubled in size on 10 million vehicles in two years. In 2011, the market began to enter the correction period. Mainly reflected in the following aspects:

From the perspective of growth rate, the growth rate of production and sales dropped significantly. In 2011, the cumulative production and sales volume were 18.42 million units and 18.51 million units, respectively, which were only 0.84% ​​and 2.45% higher than the same period of last year, and the increase rate was more than 30 percentage points lower than the same period of last year. The growth rate was the lowest level in 13 years.

From a structural point of view, in contrast to the previous short-term decline, the growth rates of passenger cars and commercial vehicles both fell sharply in 2011. Commercial vehicles even experienced negative growth. At the same time, as the main driving force for the growth of the automotive market, basic passenger cars (sedans) and The growth rate of crossover passenger vehicles (minivans) has dropped significantly. In particular, the number of models under 1.6 liters and crossover passenger vehicles have shown negative growth.

From the perspective of supply and demand, total inventory growth has been rapid, dealer inventory has increased significantly, and the contradiction between supply and demand has become increasingly prominent. At present, the inventory sales ratio of most dealers exceeds the safety stock level of 1.5 months, and the ratio of stock sales to some independent brand dealers even exceeds 3. According to the data released by the National Association of Passenger Vehicle Market Information (CPCA), the sales volume of passenger cars in China was nearly 800,000 less than the manufacturer’s wholesale volume announced by the China Association of Automobile Manufacturers in 2011, and most of them became Inventory in the hands of dealers.

The conclusion of the policy callback must also be necessary. The author believes that the sharp correction of the auto market in 2011 has both a certain historical inevitability and is also necessary for the long-term growth of the auto market in China.

In response to the global financial crisis, the Chinese government introduced a number of stimulus policies aimed at expanding domestic consumption in 2009. In response to the expansion of automobile consumption, the following policies have been issued: the purchase tax for vehicles with a displacement capacity of 1.6 liters or less has been halved; “cars go to the countryside”; “replacement of old cars” and subsidies for energy-saving vehicles have been introduced. The growth of the auto market in the previous two years also proves that these policies have indeed played a positive role in driving automobile consumption and ensuring stable growth of the national economy.

At the same time, however, policies have also had a certain impact on the market in the later period: Some consumers are spending ahead of time under preferential policies, and potential consumer energy is concentrated and released early. As stimulus policies were withdrawn in early 2011, the growth momentum of the market was slowly becoming apparent.

Therefore, the stimulus policy is not only the main reason supporting the rapid growth of the automobile market in the past two years, but also an important factor leading to a sharp drop in the growth rate in 2011. Of course, in addition to policy factors, the rise in refined oil prices, the Japanese tsunami caused Japanese manufacturers to reduce production, the decline in automobile exports, and some cities have introduced restrictions on purchase restrictions, which also aggravated the 2011 automobile market correction, but all Not the main reason.

It should be noted that after the rapid growth of the automotive market, the current market correction is indeed necessary, which is conducive to solving some of the contradictions and problems covered by high growth.

Since the "Tenth Five-Year Plan" period, China's automobile production and sales have maintained a sustained and rapid growth, of which passenger vehicles have maintained an average annual increase of 40%. The rapid expansion of the market to cover a lot of deep-seated contradictions and problems, negative impact on the automotive market sustained and healthy development to continue to appear, as a challenge to national energy security increasingly severe decline in product quality, competitive disorder, circulation patterns and service system lags The problems are becoming increasingly prominent. Industrial organizations and industrial competitiveness need to be optimized and improved urgently, and the requirements for sound laws and regulations and the rationalization of systems and policies are increasingly pressing. The past two years have been particularly prominent in the challenges brought about by the growth of automobiles in the sustainable development of cities. Traffic congestion, environmental pollution, and fuel supply caused by rapid market growth have become increasingly prominent not only in large cities but also in medium-sized cities. It has become an important social issue affecting residents' happiness and urban harmony.

The market correction will cause these problems to “fall out”. This will not only help the government straighten out the management mechanism for the auto market, the auto industry, and auto consumption, but also help manufacturers and distributors adjust their production and business strategies, solve outstanding problems, and clarify development ideas. As the saying goes, “The sharp knife does not miscut the firewood.” At the same time, the callback is also conducive to guiding consumers to form a reasonable and scientific consumption concept, so as to lay a solid foundation for the future development of China’s auto industry and auto market.

China's auto demand remains strong after a short period of time Only by knowing and understanding the development stage of China's auto market and auto consumption will it be possible to have an objective and clear judgement on this callback and future trends of the auto market.

The author believes that in the medium to long term, China's auto demand is still in a period of rapid growth, this round of callback will not have a long-term negative impact on China's auto market growth in the medium term. According to my research on the growth of the automobile market in more than 30 countries around the world, the growth in automobile demand has some typical international experience. Not only North America, Western Europe, Japan and South Korea and other economies conform to these laws, but major developing countries are also following this. Path ahead.

International experience shows that when the per capita GDP is in the range of 4500 to 12,000 international dollars (Madison 1990, the same below), it is a period of accelerated demand for automobiles. When the per capita GDP reaches 4,500 to 9,000 international dollars, the number of 1,000-person vehicles will increase from 20 to 100, and the average annual growth rate will be maintained between 18% and 19% for 9 to 10 years; when the per capita GDP reaches 9,000 to 12,000 The international dollar, the number of thousand people autos has increased from 100 to 200 cars, an average annual increase of 11% to 12%, the time lasts roughly 6 to 7 years. In 2011, the number of 1,000-person vehicles in China is about 70, which is still in a period of rapid growth from 20 to 100.

According to international experience, under normal circumstances, the ownership of thousands of people in China will maintain an average annual growth rate of 18% to 19% in the next two to three years. After the 1,000 people own more than 100 vehicles, the market will gradually enter a stable growth period of about 6 years, and the average annual growth rate will maintain about 10% to 12%.

As China is still in a golden period of growth in the auto market, the time for this callback will not be too long, and the factors leading to the market correction are expected to be digested within the next two years. In the absence of major macroeconomic fluctuations at home and abroad, the growth rate of China's automobile production and sales in 2012 will rebound from the previous year. The sales of automobiles will reach 20 million to 20.3 million units in the same year, and the growth rate of production and sales will remain at 8% to 10%. %; The market trend of the previous low and high after the year will be presented.

After undergoing a short-term correction, China's auto market will gradually enter a stage of stable growth, and it will be difficult to see high growth rates of more than 30%. This poses a challenge to China's auto industry and auto management. It also provides pressure and motivation for market transformation and the formation of automotive society, creating opportunities.