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China's car market is not as good as expected peak 30 million vehicles has become a bottleneck? Let's see what experts from all walks of life say.

iconMay 14, 2019 10:31
Source:SMM

SMM News: after 2018, the global auto market has been declining, the economic situation in 2019 has not been able to recover, the downward trend still exists. According to the latest data released by the Federation of Rivers, retail sales of chivalrous passenger cars fell 16.9 percent to 1.508 million units in April from a year earlier, down 13.8 percent from the previous month, while retail sales of passenger cars totaled 6.595 million from January to April. The cumulative year-on-year decline was 11.9 per cent.

Is the continued decline after 28 years of continuous growth a temporary twists and turns or a permanent inflection point for China's car market? With such a long decline, coupled with the worst industrial change in a century, how can we understand this complex situation?

| the downward trend of the car market has become a trend, but it is not a difficult problem to break through 30 million vehicles. |

With the liberalization of domestic automobile foreign equity ratio and the reduction of import tariffs, the open competition in the industry has been pushed to a higher level. The sharp decline of new energy subsidies has made the new energy vehicle industry, especially the fast-growing new energy enterprises, face a downward impact, but at the same time, it also brings opportunities for joint venture brands with technology reserves to develop new energy vehicles. The early arrival of the sixth country, the acceleration of automobile "new four modernizations", the upgrading of consumption structure and so on, all indicate that China's automobile market has taken the lead in entering the ultimate stage of competition.

The differentiation pattern is more obvious, and the "shuffle and knockout stage" of the industry has entered the white-hot, whether it is new or old enterprises, joint ventures or independent enterprises, group enterprises or single enterprises, will be fully entered the development of hard power competition test, There will be a risk of collapse in the next two or three years.

"what is basically certain now is that, after 27 years of rapid climbing, the Chinese auto market reached a peak of about 28.88 million vehicles in 2017. although it still dominates the position of the world's first market, it has not crossed the peak of 30 million vehicles after all." At the 11th China Automotive Blue Book Forum in 2019, Jia Ke, editor-in-chief of Automobile Business Review and co-founder of Auto APP, mentioned that the decline of the car market will be a permanent inflection point, and it will be difficult to grow in the future.

However, Jiang Zili, deputy general manager of BAIC Group, believes that with this round of industrial reform and adjustment and the upgrading of the application of the "four modernizations", there will still be a certain amount of room for growth in the overall automobile market after the "consolidation period" in these two or three years. The automobile industry is also bound to usher in a new stage of "spiral development". It is not a difficult problem to break through 30 million vehicles, but it is difficult to say whether it is 35 million vehicles or 40 million vehicles.

Xu Changming, deputy director of the National Information Center, gave a more optimistic figure. "according to our judgment for several years in a row, I think it will rise from 28 million to 42 million." Up to now, I think there has been no change in this judgment. What has changed is the point in time at this peak point. "

In his view, there is a proportional relationship between car ownership and the two peaks of car sales in each country, that is, 15 times the number of cars sold. The 15-fold relationship refers to the 15-year life of a car, which is a replacement cycle, as is the case in Japan, France, the United States, and so on. But focusing on the number of cars owned by a thousand people, China still lags far behind the three major car markets, which means that China still has great potential to tap.

But at the same time, he also pointed out that for the future, the competition between different model levels will be very fierce, the development of enterprises need to focus on the improvement of their own product technology, rather than rely on the growth brought about by the expansion of the total market.

| Industrial change is accelerated, and a few new forces are expected to make a breakthrough. |

"China's automobile industry is entering a new stage of development; in a sense, a new round of competition between Chinese automobile brands and foreign brands is also beginning. With a new round of changes in the technology industry, this will also be the best opportunity for the rise of Chinese car brands, "Jiang said.

Chen Anning, vice president of the Ford Motor Group and president and chief executive officer of Ford China, said that China's automobile industry has reached a critical stage of transition to intelligent travel, and how to adapt to the new trend and choose the right direction of development has become an unprecedented challenge. Henry Ford once said, "Free travel promotes human progress." More than 100 years later, technology has made many possibilities impossible, but the basic desire for freer and safer ways to travel has never changed.

In the face of the reform of the automobile industry and the acceleration of the reshuffle of the industry, how can the new power enterprises break through? Zhao Fuquan gave his opinion. "A few new forces are expected to break through, and most of them are under pressure to survive," he said. "if small enterprises want to survive in the future, there is no other way to unite and alliance. This is a general trend."

However, in the view of Ding Lei, chairman of Chinese Express and CEO, this is a great opportunity, not how to survive, but how to seize historical opportunities for development. Enterprises affected by pessimism are considering problems in the past dimension. If we consider it from the perspective of "four modernizations" and from the perspective of "three intelligences", there are still many opportunities.

Li Bin, chairman of Weilai Automobile, said that the change in the automobile industry is not limited to technology, but more about the relationship between the user perspective and the user perspective. From a large time point of view, there is now the integration of the automotive industry, the energy industry and the technology industry, which have a very far-reaching impact on the entire global economic landscape. It is precisely for this reason that in the next few years, in the era of intelligent electric vehicle change, new power enterprises should seize such opportunities, realize the process from innovation, to change, and then to breakthrough, and challenge themselves with courage. Inject new vitality into the long-term economic development of China as a whole.

In the face of the acceleration of industry change, every strategic decision of the enterprise needs to be cautious again and again, because it will be related to the "life and death" of the enterprise itself. But as Chen Zheng, global design director of Changan Automobile, says, innovation means extraordinary opportunities for achievement and, of course, huge risks. For the auto industry, it will take at least three years to see the value of innovation, and it is like a gamble that no one knows what the environment will be like three years later. And this gamble is obviously not limited to automobile design, but also the exploration of technology, the formulation of the strategic direction of the enterprise and so on. How to seize the market opportunity, in the industry competition to obtain an invincible position, obviously need not only wisdom, courage is equally important.

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