Production and sales of Chinese auto mobile market in April were nearly halved, and the supply chain needs to be relieved
The automobile industry of China calls for “unified big market”
No matter from which point of view, China’s auto industry chain and supply chain have undoubtedly experienced the most severe test in history.
According to data released by the China Association of Automobile Manufacturers on May 11, in April this year, automobile production and sales reached 1.205 million and 1.181 million respectively, down 46.2% and 47.1% month-on-month, and down 46.1% and 47.6% year-on-year. Among them, April sales fell below 1.2 million units, a new monthly low for the same period in the past 10 years. From January to April this year, the production and sales of automobiles were 7.69 million and 7.691 million, down 10.5% and 12.1% year-on-year, ending the growth trend in the first quarter of this year.
Faced with such a rare and huge challenge, the market undoubtedly needs more powerful policies. In the “Opinions of the General Office of the State Council on Further Unleashing Consumption Potential and Promoting the Continued Recovery of Consumption” (hereinafter referred to as the “Opinions”) issued before the “May 1st” holiday, “new energy vehicles” and “green travel” have once again become the driving force for the continuous recovery of consumption. main event.
”The introduction of this document at this time is mainly to consider that the current situation of insufficient domestic demand has worsened, especially the shrinking consumer demand caused by the epidemic, and it is necessary to guide the recovery of consumption through policies.” Research on Digital Economy and Financial Innovation of Zhejiang University International Business School Pan Helin, co-director and researcher of the center, believes that considering that supply and demand have not returned to normal in some areas due to the pressure of epidemic prevention and control, it is not yet time to “comprehensively boost consumption”.
In his view, the current downturn of China’s auto industry is that the rebound of the epidemic has led to a phased contraction of auto production capacity, while the lack of production capacity has led to a decline in auto sales. “This should be a short-term problem, and the auto industry is expected to return to normal in the second half of the year. Smart electric vehicles, in particular, will remain the vane of upgrading the consumer market.”
The entire industry chain is facing severe challenges, and what problems remain to be solved in the recovery of supply and demand
This round of epidemic is fierce, and Jilin, Shanghai, and Beijing, which have been hit successively, are not only the production centers of the automobile industry, but also key consumer markets.
According to Yang Xiaolin, a senior auto media person and an analyst in the auto industry, the challenges faced by the auto industry now almost run through the entire industry chain, and it is difficult to recover quickly in a short period of time. “From the Northeast to the Yangtze River Delta to the Beijing-Tianjin-Hebei region, all the key layout areas of the automobile industry chain. When the pause button is pressed in these places due to the epidemic, the automobile industry chain in the whole country and even the world will encounter a blockage point.”
Cao Guangping, an independent researcher of new energy vehicles, believes that the direct and indirect impact of the new crown pneumonia epidemic on China’s auto industry cannot be ignored. On the one hand, the lockdown in Shanghai and other places has forced suppliers and OEMs to shut down, and car sales are also facing difficulties.
”After many efforts, most car companies have resumed work at present, but the recovery of the industrial chain is difficult to achieve overnight. If there is a blockage in any link, the rhythm and efficiency of the automobile production line may be slow and inefficient.” He analyzed that the production and consumption of the automobile industry Full recovery may take until the second half of the year, but the specific recovery progress depends on the situation of epidemic prevention and control and economic trends.
According to data released by the Passenger Car Market Information Joint Conference, in April, the production of the five major car companies in Shanghai dropped by 75% month-on-month, the production of major car companies in Changchun dropped by 54%, and the production of cars in other regions dropped by about 38%.
In this regard, Cui Dongshu, secretary-general of the China Passenger Transport Association, analyzed that the national radiation effect of the parts system in Shanghai is prominent, and some imported parts are in short supply due to the epidemic, and domestic suppliers of parts and components in the Yangtze River Delta region cannot supply in time. , and some even completely shut down, outage. Coupled with the reduced logistics efficiency and uncontrollable transportation time, the problem of poor automobile production in April became prominent.
According to the statistics of the Passenger Car Association, the retail sales of the passenger car market in April reached 1.042 million units, a year-on-year decrease of 35.5% and a month-on-month decrease of 34.0%. From January to April this year, the cumulative retail sales were 5.957 million units, a year-on-year decrease of 11.9% and a year-on-year decrease of 800,000 units. Among them, the year-on-year decrease of about 570,000 vehicles in April, and the year-on-year and month-on-month growth of retail sales were at the lowest value in the history of the month.
”In April, customers from dealers’ 4S stores in Shanghai, Jilin, Shandong, Guangdong, Hebei and other places were affected.” Cui Dongshu told reporters bluntly that the sharp drop in auto retail sales in April reminded people of March 2020. In January, when the new crown pneumonia epidemic broke out, auto retail sales fell by 40% year-on-year.
Since March this year, the domestic epidemic has spread to many points, affecting most provinces across the country. In particular, some unexpected factors exceeded expectations, which brought greater uncertainty and challenges to the smooth operation of the economy. Consumption, especially contact consumption, was greatly affected, so the recovery of consumption was further under pressure.
In this regard, the “Opinions” propose that efforts should be made to respond to the impact of the epidemic and promote the orderly recovery and development of consumption from three aspects: focusing on ensuring market players, increasing assistance to enterprises, ensuring supply and price stability of basic consumer goods, and innovating consumption formats and models. .
”Consumption is the final demand, a key link and an important engine for smoothing the domestic cycle. It has a lasting driving force for the economy and is related to ensuring and improving people’s livelihood.” The relevant person in charge of the National Development and Reform Commission said in an interview with the media, “Opinions” On the one hand, the formulation and promulgation of the draft is to take a long-term perspective and focus on smoothing the national economic cycle, opening up the entire chain and each link of production, distribution, circulation, and consumption, and providing more solid support for cultivating a complete domestic demand system, forming a strong domestic market, and building a new development pattern; On the other hand, focusing on the current situation, coordinating epidemic prevention and control and economic and social development, actively responding to the impact of the epidemic on consumption, striving to stabilize current consumption, effectively guaranteeing consumption supply, and promoting the continuous recovery of consumption.
In fact, from the “14th Five-Year Plan” to the long-term goal of 2035, from the Central Economic Work Conference in the past two years to this year’s “Government Work Report”, all plans have been made to promote consumption, emphasizing the need to improve residents’ consumption ability and willingness, Innovate consumption formats and models, tap the consumption potential of counties and townships, reasonably increase public consumption, and promote the continuous recovery of consumption.
Some analysts believe that the impact of the epidemic on consumption is phased. With the effective control of the epidemic and the gradual emergence of policy effects, the normal economic order will be restored quickly, and consumption will gradually pick up. The fundamentals of long-term improvement in consumption have not changed.
The China Automobile Dealers Association said that with the release of previously suppressed car purchase demand, it is expected that car production and sales in May will achieve a month-on-month increase.
While promoting the resumption of work and production in the automobile industry, measures to stimulate automobile consumption have been introduced intensively from the central to the local level. It is understood that Guangzhou has added 30,000 car purchase indicators, and Shenzhen has added 10,000 car purchase indicators. The Shenyang Municipal Government has invested 100 million yuan to provide auto consumption subsidies to individual consumers (no household registration limit) who purchase cars in Shenyang.
Statistics show that from January to April this year, the production and sales of new energy vehicles reached 1.605 million and 1.556 million, a year-on-year increase of 1.1 times, with a market share of 20.2%. Among the main varieties of new energy vehicles, compared with the same period of the previous year, the production and sales of pure electric vehicles, plug-in hybrid electric vehicles and fuel cell vehicles continued to maintain a rapid growth momentum.
Therefore, in the next process of promoting the recovery of production and sales of the automobile industry and releasing the vitality of consumption, new energy vehicles will undoubtedly be the “main force”.
Let new energy vehicles be the “main force” to stimulate consumption, starting from the elimination of local protectionism
It is worth noting that the “Opinions” propose that it is necessary to orderly remove institutional barriers and hidden barriers in some key service consumption areas, promote the coordination and unification of standards, rules and policies in different regions and industries, and simplify and optimize the procedures for obtaining relevant licenses or certificates. .
The “Opinions of the Central Committee of the Communist Party of China and the State Council on Accelerating the Construction of a National Unified Market” previously issued proposes to speed up the establishment of a unified national market system and rules to break local protection and market segmentation. To promote the construction of a unified national market, the automobile industry will obviously become the main force. However, a thriving new energy vehicle market is also considered to be the hardest hit by local protectionism.
On the one hand, since some of the subsidies for new energy vehicles are borne by local finance, many local governments will tilt the subsidy funds to car companies that build local factories. From limiting the wheelbase of vehicles to stipulating the size of the fuel tank of plug-in hybrid vehicles, under various seemingly bizarre subsidy regulations, other brands are “precisely” excluded from the local subsidies for new energy vehicles, and local car brands can “Exclusive”. This artificially adjusted the price order of the new energy vehicle market, resulting in unfair competition.
On the other hand, when purchasing taxis, buses and official vehicles in various places, many provinces and cities are either openly or secretly inclined to local car companies. Although there are such “rules” in the era of fuel vehicles, this situation will undoubtedly dampen the enthusiasm of enterprises to strengthen technology research and development and improve the strength of new energy vehicle products. In the long run, it will definitely have a negative impact on the entire new energy vehicle industry chain.
”The more severe challenges we face, the more we must have a global view of the whole country.” Yang Xiaolin bluntly said that the fragmentation of the domestic market and the “hidden mystery” of local subsidies for new energy vehicles have their specific causes and forms of existence. With the gradual withdrawal of subsidies for new energy vehicles from the historical stage, local protectionism in the new energy vehicle market is expected to greatly improve.
”Without financial subsidies for new energy vehicles, they will accelerate their return to the unified national market. But we still have to be vigilant against those non-market barriers and give consumers the right to diversify their choices.” He reminded that some places cannot be ruled out. Continue to build barriers to protect local enterprises through licensing, government procurement and other means. Therefore, in terms of market supervision and circulation mechanism, more national policies should be introduced.
In Pan Helin’s view, local governments use high subsidies and credit support, and even directly through government capital investment to promote the development of the new energy vehicle industry, thus forming the industrial advantage of new energy vehicles. But it could also be a breeding ground for local protectionism.
”Accelerating the construction of a unified national market means that in the future, we must focus on eliminating this form of local protectionism, and let all regions attract new energy vehicle companies more equally.” He said that localities should reduce competition in financial subsidies, Instead, it will focus more on providing corresponding services for enterprises on an equal footing and creating a service-oriented government.
”If the local government intervenes in the market inappropriately, it is equivalent to pulling the sidelines in the market competition. This is not only not conducive to the market law of survival of the fittest, but also may blindly protect backward production capacity, and even form a ‘the more protection, the more backward, the more backward The vicious circle of more protection.” Cao Guangping told reporters bluntly that local protectionism has a long history. In the process of bail-out enterprises and release consumption vitality, the behavior of local governments should not only reasonably apply the hand of macro-control, but also always adhere to the Conducive to the goal of unifying the formation of a large market.
Obviously, accelerating the construction of a large domestic unified market is an important part of improving the socialist market economic system, and it is of fundamental strategic significance for building a new development pattern with the domestic large circulation as the main body and the domestic and international dual circulations mutually promoting each other.
The “Opinions of the Central Committee of the Communist Party of China and the State Council on Accelerating the Construction of a Large National Market” proposes to improve the market information exchange channels, unify the property rights transaction information release mechanism, and realize the connection of the national property rights transaction market. Promote the unified interface construction of information authentication platforms of the same type and the same purpose, improve interface standards, and promote the flow and efficient use of market information. Information such as market entities, investment projects, output, and production capacity shall be disclosed in accordance with the law to guide the dynamic balance between supply and demand.
”This means that the synergy between industries and between the upstream and downstream of the industry chain will be greatly strengthened.” According to an analysis by industry experts, making the auto industry bigger and stronger requires both the role of the market and the inseparability of “promising” The government”, “The most important thing at the moment is to base itself on domestic demand and smooth the circulation, and gradually lift all kinds of unreasonable restrictions in the process. For example, the issue of car purchase restrictions is worth studying.”
The “Opinions” require that in order to steadily increase the consumption of automobiles and other large-scale consumption, all regions shall not add new automobile purchase restrictions, and the regions that have implemented purchase restrictions shall gradually increase the number of automobile incremental indicators, relax the qualification restrictions on car purchasers, and encourage the purchase of restricted areas except for individual megacities. Implement policies to differentiate indicators in urban areas and suburbs, regulate car use more through legal, economic and technological means, gradually cancel car purchase restrictions according to local conditions, and promote the transition from purchase management to use management of consumer goods such as cars.
From ensuring supply to releasing consumption vitality, from ensuring production to smoothing domestic circulation, the production line of the automobile industry shoulders the important task of expanding and strengthening the real economy and ensuring employment, and is connected to the people’s yearning for a better travel life. Affecting the course of China’s economic giant. More than ever, people need the “lubricant” that ensures the high-quality operation of this long chain of the automotive industry.
Post time: May-13-2022