China's car market is cold: domestic brands fell more than 22 per cent in the worst month in 29 years-Shanghai Metals Market

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China's car market is cold: domestic brands fell more than 22 per cent in the worst month in 29 years

Translation 05:04:15PM May 14, 2019 Source:Wall Street news
The content below was translated by Tencent automatically for reference.

SMM News: on May 13, the China Association of Automobile Industries released data on automobile production and sales in China from January to April this year, which showed the following four very surprising results:

1. Car sales as a whole: 1.98 million units in April, down 14.6% from January to April, 8.353 million vehicles, down 12.1%;

2. Passenger cars: sales of 1.575 million vehicles in April, down 17.7% from January to April, 6.838 million vehicles, down 14.7%;

3. Chinese brand passenger cars: sales of 585000 vehicles in April, down 27.9% from January to April, 2.77 million vehicles, down 22.3%;

4. Car exports: the export volume in April was 83000, down 11.8%. From January to April, the export volume was 314000, down 1.6%.

These four sets of data are somewhat unexpected. The reason is that everyone is prepared for the decline, but did not expect such a large margin, which is somewhat unbearable.

According to 2018 figures released by the China Association of Automobile Manufacturers, new car sales fell for the first time in 28 years to 28.081 million, but by just 2.8 per cent. Unexpectedly, it expanded to double digits from January to April this year, exceeding expectations.

The worry is, will the subsequent decline continue to expand? To what extent will it expand? Is the Chinese car market going to change direction completely? At the same time, at a time when trade between China and the United States is reopening, should we panic?

Or look at the data. Since 2009, when new car sales in China became the first in the world with 13.6448 million vehicles, the "number one" title has not moved in the past 10 years.

In 2009, sales in the United States were 10.43 million vehicles, only slightly lower than in China. But by 2018, the Chinese market was 28 million, compared with 17.33 million in the US.

In terms of scale alone, even if the decline widens further in 2019, there is a difference of about 10 million vehicles to fall, so sales are not a core issue in themselves. However, this does not mean that the Chinese market is stronger than the US market, which only means that the market is "scale" and does not represent the actual gap.

According to January-April data, Chinese-branded passenger cars fell 22.3 per cent, compared with an average overall market decline of 12.3 per cent, meaning the decline in Sino-foreign joint ventures and imported cars was lower than that of Chinese brands.

So Chinese brand market share is likely to fall below 40 per cent in 2019.

Do you want to be afraid of that? Personally, I think we have to look at it on two levels.

Just look at the market share, the more the better. But the car market has always had this saying: luxury cars, which occupy a smaller market share, make the most money because of the strong ability of brand premium; For example, in Sino-foreign joint ventures, the foreign parties have taken away most of the profits, including 70%, 80% and 95%. Therefore, the decline in Chinese brand market share, can it represent that the profit of Chinese brand market has also decreased? I'm afraid not.

Because the overall upward trend of Chinese brands is also an indisputable fact, including Great Wall Motor's high-end brand WEY, Geely's leader, Chery's star path, and so on.

WEY was founded in 2016 and has launched four cars in a row: VV5, VV6, VV7 and P8. By the end of April, the WEY brand had sold nearly 260000 vehicles.

Another domestic high-end brand Geely neck, in November 2017, the first model of the Linke 01 on the market, and then launched two consecutive models of the Linke 02, 03. As of April, the company had sold more than 160000 vehicles.

It also includes Chery's early launch of the high-end brand Kanji, as well as the star brands that are planning to go to market, both of which are positioned at a higher level of the market.

There is also SAIC's famous brand, although its original positioning is lower than Roewe, but now on behalf of SAIC to the global market. Of course, the current volume is still very small, but in terms of investment trends and sales growth, this part of the business is upward.

In other words, Chinese brands are making indomitable progress. Although the current size of high-end brands is very small, but the overall trend has not changed.

As well as some new electric car brands: Weilai, ideal, Aichi, Weima and so on, most of the new models of these brands have jumped into the range of more than 200000 yuan, touching the price space that Chinese brands have not entered before. These brands have also injected some vitality into the overall upward movement of Chinese brands.

On the whole, China's automobile industry is also in line with China's current national strategy: from high speed to high quality development. From this point of view, the decline in China's car market from January to April this year can be understood as a process of removing turnips.

At 20:46 on the evening of May 13, China announced that it would impose tariffs of 25 per cent, 20 per cent, 10 per cent and 5 per cent on US imports of about $60 billion, respectively. At noon on May 10, the United States announced a tariff on $200 billion of Chinese goods, raising the tax rate from 10 per cent to 25 per cent. A new round of trade disputes has come.

The dispute between China and the United States means a new competition. As the pioneer of the next era, China's automobile industry personally believes that it will play a more active role in the war of reshaping the world industrial structure.

Key Words:  Car market  domestic  sales  market share 

China's car market is cold: domestic brands fell more than 22 per cent in the worst month in 29 years

Translation 05:04:15PM May 14, 2019 Source:Wall Street news
The content below was translated by Tencent automatically for reference.

SMM News: on May 13, the China Association of Automobile Industries released data on automobile production and sales in China from January to April this year, which showed the following four very surprising results:

1. Car sales as a whole: 1.98 million units in April, down 14.6% from January to April, 8.353 million vehicles, down 12.1%;

2. Passenger cars: sales of 1.575 million vehicles in April, down 17.7% from January to April, 6.838 million vehicles, down 14.7%;

3. Chinese brand passenger cars: sales of 585000 vehicles in April, down 27.9% from January to April, 2.77 million vehicles, down 22.3%;

4. Car exports: the export volume in April was 83000, down 11.8%. From January to April, the export volume was 314000, down 1.6%.

These four sets of data are somewhat unexpected. The reason is that everyone is prepared for the decline, but did not expect such a large margin, which is somewhat unbearable.

According to 2018 figures released by the China Association of Automobile Manufacturers, new car sales fell for the first time in 28 years to 28.081 million, but by just 2.8 per cent. Unexpectedly, it expanded to double digits from January to April this year, exceeding expectations.

The worry is, will the subsequent decline continue to expand? To what extent will it expand? Is the Chinese car market going to change direction completely? At the same time, at a time when trade between China and the United States is reopening, should we panic?

Or look at the data. Since 2009, when new car sales in China became the first in the world with 13.6448 million vehicles, the "number one" title has not moved in the past 10 years.

In 2009, sales in the United States were 10.43 million vehicles, only slightly lower than in China. But by 2018, the Chinese market was 28 million, compared with 17.33 million in the US.

In terms of scale alone, even if the decline widens further in 2019, there is a difference of about 10 million vehicles to fall, so sales are not a core issue in themselves. However, this does not mean that the Chinese market is stronger than the US market, which only means that the market is "scale" and does not represent the actual gap.

According to January-April data, Chinese-branded passenger cars fell 22.3 per cent, compared with an average overall market decline of 12.3 per cent, meaning the decline in Sino-foreign joint ventures and imported cars was lower than that of Chinese brands.

So Chinese brand market share is likely to fall below 40 per cent in 2019.

Do you want to be afraid of that? Personally, I think we have to look at it on two levels.

Just look at the market share, the more the better. But the car market has always had this saying: luxury cars, which occupy a smaller market share, make the most money because of the strong ability of brand premium; For example, in Sino-foreign joint ventures, the foreign parties have taken away most of the profits, including 70%, 80% and 95%. Therefore, the decline in Chinese brand market share, can it represent that the profit of Chinese brand market has also decreased? I'm afraid not.

Because the overall upward trend of Chinese brands is also an indisputable fact, including Great Wall Motor's high-end brand WEY, Geely's leader, Chery's star path, and so on.

WEY was founded in 2016 and has launched four cars in a row: VV5, VV6, VV7 and P8. By the end of April, the WEY brand had sold nearly 260000 vehicles.

Another domestic high-end brand Geely neck, in November 2017, the first model of the Linke 01 on the market, and then launched two consecutive models of the Linke 02, 03. As of April, the company had sold more than 160000 vehicles.

It also includes Chery's early launch of the high-end brand Kanji, as well as the star brands that are planning to go to market, both of which are positioned at a higher level of the market.

There is also SAIC's famous brand, although its original positioning is lower than Roewe, but now on behalf of SAIC to the global market. Of course, the current volume is still very small, but in terms of investment trends and sales growth, this part of the business is upward.

In other words, Chinese brands are making indomitable progress. Although the current size of high-end brands is very small, but the overall trend has not changed.

As well as some new electric car brands: Weilai, ideal, Aichi, Weima and so on, most of the new models of these brands have jumped into the range of more than 200000 yuan, touching the price space that Chinese brands have not entered before. These brands have also injected some vitality into the overall upward movement of Chinese brands.

On the whole, China's automobile industry is also in line with China's current national strategy: from high speed to high quality development. From this point of view, the decline in China's car market from January to April this year can be understood as a process of removing turnips.

At 20:46 on the evening of May 13, China announced that it would impose tariffs of 25 per cent, 20 per cent, 10 per cent and 5 per cent on US imports of about $60 billion, respectively. At noon on May 10, the United States announced a tariff on $200 billion of Chinese goods, raising the tax rate from 10 per cent to 25 per cent. A new round of trade disputes has come.

The dispute between China and the United States means a new competition. As the pioneer of the next era, China's automobile industry personally believes that it will play a more active role in the war of reshaping the world industrial structure.

Key Words:  Car market  domestic  sales  market share