Emission switching leads to falling inventory dealers look forward to a recovery in the car market-Shanghai Metals Market

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Emission switching leads to falling inventory dealers look forward to a recovery in the car market

Translation 08:23:33AM Jul 15, 2019 Source:Southern network
The content below was translated by Tencent automatically for reference.

SMM News: 2019 is more than half, the "falling" car market may be due to the industry's efforts to clean up inventory and be pressed the suspension key, but already struggling dealers feel not relieved but worse, the industry is looking forward to the recovery of the car market is still a long way off.

On July 1, the China Automobile Circulation Association held a regular monthly situation analysis meeting. A lot of data released at the meeting made people in the industry have a more clear understanding of the market situation and challenges faced by dealers and even the automobile industry as a whole. At this point, the phrase "confidence is as good as gold" could not be more appropriate in the current auto industry.

Inventory drop due to emission switching

The latest survey of inventory early warning index of Chinese auto dealers shows that the inventory early warning index of automobile dealers in June was 50.4%, down 3.6 percentage points from the previous month and 8.8 percentage points from the same period last year. Although the inventory early warning index is still above the warning line, it is the lowest month in nearly a year.

In response, Lang Xuehong, vice president of the China Automobile Circulation Association, explained that the auto dealer inventory early warning index fell in June compared with the previous month, which does not mean that the market has warmed up. This is in the context of the industry's efforts to clean up the national five cars, consumers mostly with the bottom of the mentality to buy cars, resulting in a brief rebound in sales, in exchange for a sharp drop in inventory to 41.7% from 50.3% last month. In addition, dealers who do not implement the six national standards in advance, in order to complete the semi-annual assessment and impulse promotion, but also play a role in promoting the decline of inventory.

From the point of view of the sub-index of the inventory early warning index, the decline in inventory, market demand and the increase in average daily sales are corresponding to the continuous decline in the two indexes of employees and operating conditions, reflecting that the industry is still in a recession. Dealers have generally taken measures to reduce staff and increase efficiency this year to cope with the cold winter in the car market, with a 10% to 20% reduction in the number of employees, according to the survey. But this has not led to an improvement in business conditions. In order to clean up the inventory, dealers have to exchange volume with price, pay the painful price of a sharp decline in profits, the phenomenon of inverted price in the industry has further intensified.

The car market needs to recuperate

At the meeting, the China Automobile Circulation Association also released a "car consumption index" of 41.2 in June, indicating that consumer demand has fallen, and sales in July are expected to decline from June, and the market performance is not optimistic.

For the car market in July is not optimistic, Lang Xuehong analysis pointed out that, on the one hand, the car market off-season is coming, plus the previous two months of great efforts to clear the treasury overdraft market demand, and the current supply of six cars is slightly inadequate, as a result, it is judged that the car market performance in July is bleak. On the other hand, last year, after the Chinese government announced that it would reduce import tariffs on cars and parts in July 2018, consumers who intended to buy medium and high-end products showed a wait-and-see mood until the concentrated release of consumer demand in July 2018. it can be seen that the sales base in June 2018 was relatively low, while the base in July was relatively high. As a result, it is speculated that, driven by the dual driving force of clearing inventory and completing the half-year assessment, the car market may have a positive growth in June this year for the first time compared with the previous month, and the increase is likely to reach double digits, but the car market is likely to take a sharp turn for the worse in July, with a negative growth rate of more than 15% expected.

"it will be very difficult for dealers and the auto industry as a whole in the third quarter of this year. The 'gold, nine and silver ten', which 'stood up' last year, may not be repeated this year. If consumer support does not recover significantly after August, it will be difficult for the car market to reverse in the fourth quarter of this year. " "from the analysis of the phased development of the car market as a whole, in addition to the blessing of policy factors, it will take time for purchasing power to recover from recession to recovery, and a cycle of recuperation and rest for consumers is expected to continue until the end of 2020," Lang said. Therefore, the China Automobile Circulation Association is still cautious about the market expectations for the second half of the year, and the negative growth for the whole year is almost certain. "

Confidence is comparable to gold

At the meeting, Kaida Research Institute released the "Research on the confidence Index of Chinese Automobile Brand Dealers in the second half of 2019" report. The report showed that the dealer confidence index in the second half of 2019 was 8.32 points, the same as in the first half of the year, but down 0.13 points from the same period last year. The reason is that the factors such as the continuous loss of new cars, the emergence of insurance regulatory policies, the dispute over the cost of financial services, the early implementation of Guofu emissions, the low macroeconomic operation and so on, have an obvious negative drag on the dealer confidence index.

From the sub-index, the Japanese brand dealer confidence index is still the highest, 8.59 points, followed by European brands, 8.47 points. The confidence index of American, European and Chinese brand dealers had little difference in the second half of the year, while the confidence index of Japanese and Korean brands was weaker than that of the first half of 2019. The confidence of luxury brand dealers remained the highest, with 8.47 points, followed by mainstream joint ventures (8.23 points) and independent brands (8.13 points).

The factors related to dealer confidence in the report include product confidence, brand image, profit potential, business policy, manufacturer management, manufacturer communication, manufacturer financial support, market risk and personnel stability. According to the survey found that dealers in addition to the product and brand image confidence has improved, the confidence of other links have declined to varying degrees. Among them, the biggest and lowest decline in the confidence index is the profit potential, and has continued to decline since the second half of 2018, indicating that dealers are very worried about the profit outlook. The second largest drop in confidence was financial support from manufacturers, which was linked to the controversy over financial services exposed in the Mercedes-Benz rights incident in Xi'an in April.

Xiao Zhengsan, vice president of the China Automobile Circulation Association, called on dealers and manufacturers to rationally face the periodic adjustment of the car market, strengthen supply-side structural adjustment under the guidance of the market, rationally plan production capacity and sales targets, and tide over difficulties hand in hand.

Key Words:  Inventory  dealers  car market 

Emission switching leads to falling inventory dealers look forward to a recovery in the car market

Translation 08:23:33AM Jul 15, 2019 Source:Southern network
The content below was translated by Tencent automatically for reference.

SMM News: 2019 is more than half, the "falling" car market may be due to the industry's efforts to clean up inventory and be pressed the suspension key, but already struggling dealers feel not relieved but worse, the industry is looking forward to the recovery of the car market is still a long way off.

On July 1, the China Automobile Circulation Association held a regular monthly situation analysis meeting. A lot of data released at the meeting made people in the industry have a more clear understanding of the market situation and challenges faced by dealers and even the automobile industry as a whole. At this point, the phrase "confidence is as good as gold" could not be more appropriate in the current auto industry.

Inventory drop due to emission switching

The latest survey of inventory early warning index of Chinese auto dealers shows that the inventory early warning index of automobile dealers in June was 50.4%, down 3.6 percentage points from the previous month and 8.8 percentage points from the same period last year. Although the inventory early warning index is still above the warning line, it is the lowest month in nearly a year.

In response, Lang Xuehong, vice president of the China Automobile Circulation Association, explained that the auto dealer inventory early warning index fell in June compared with the previous month, which does not mean that the market has warmed up. This is in the context of the industry's efforts to clean up the national five cars, consumers mostly with the bottom of the mentality to buy cars, resulting in a brief rebound in sales, in exchange for a sharp drop in inventory to 41.7% from 50.3% last month. In addition, dealers who do not implement the six national standards in advance, in order to complete the semi-annual assessment and impulse promotion, but also play a role in promoting the decline of inventory.

From the point of view of the sub-index of the inventory early warning index, the decline in inventory, market demand and the increase in average daily sales are corresponding to the continuous decline in the two indexes of employees and operating conditions, reflecting that the industry is still in a recession. Dealers have generally taken measures to reduce staff and increase efficiency this year to cope with the cold winter in the car market, with a 10% to 20% reduction in the number of employees, according to the survey. But this has not led to an improvement in business conditions. In order to clean up the inventory, dealers have to exchange volume with price, pay the painful price of a sharp decline in profits, the phenomenon of inverted price in the industry has further intensified.

The car market needs to recuperate

At the meeting, the China Automobile Circulation Association also released a "car consumption index" of 41.2 in June, indicating that consumer demand has fallen, and sales in July are expected to decline from June, and the market performance is not optimistic.

For the car market in July is not optimistic, Lang Xuehong analysis pointed out that, on the one hand, the car market off-season is coming, plus the previous two months of great efforts to clear the treasury overdraft market demand, and the current supply of six cars is slightly inadequate, as a result, it is judged that the car market performance in July is bleak. On the other hand, last year, after the Chinese government announced that it would reduce import tariffs on cars and parts in July 2018, consumers who intended to buy medium and high-end products showed a wait-and-see mood until the concentrated release of consumer demand in July 2018. it can be seen that the sales base in June 2018 was relatively low, while the base in July was relatively high. As a result, it is speculated that, driven by the dual driving force of clearing inventory and completing the half-year assessment, the car market may have a positive growth in June this year for the first time compared with the previous month, and the increase is likely to reach double digits, but the car market is likely to take a sharp turn for the worse in July, with a negative growth rate of more than 15% expected.

"it will be very difficult for dealers and the auto industry as a whole in the third quarter of this year. The 'gold, nine and silver ten', which 'stood up' last year, may not be repeated this year. If consumer support does not recover significantly after August, it will be difficult for the car market to reverse in the fourth quarter of this year. " "from the analysis of the phased development of the car market as a whole, in addition to the blessing of policy factors, it will take time for purchasing power to recover from recession to recovery, and a cycle of recuperation and rest for consumers is expected to continue until the end of 2020," Lang said. Therefore, the China Automobile Circulation Association is still cautious about the market expectations for the second half of the year, and the negative growth for the whole year is almost certain. "

Confidence is comparable to gold

At the meeting, Kaida Research Institute released the "Research on the confidence Index of Chinese Automobile Brand Dealers in the second half of 2019" report. The report showed that the dealer confidence index in the second half of 2019 was 8.32 points, the same as in the first half of the year, but down 0.13 points from the same period last year. The reason is that the factors such as the continuous loss of new cars, the emergence of insurance regulatory policies, the dispute over the cost of financial services, the early implementation of Guofu emissions, the low macroeconomic operation and so on, have an obvious negative drag on the dealer confidence index.

From the sub-index, the Japanese brand dealer confidence index is still the highest, 8.59 points, followed by European brands, 8.47 points. The confidence index of American, European and Chinese brand dealers had little difference in the second half of the year, while the confidence index of Japanese and Korean brands was weaker than that of the first half of 2019. The confidence of luxury brand dealers remained the highest, with 8.47 points, followed by mainstream joint ventures (8.23 points) and independent brands (8.13 points).

The factors related to dealer confidence in the report include product confidence, brand image, profit potential, business policy, manufacturer management, manufacturer communication, manufacturer financial support, market risk and personnel stability. According to the survey found that dealers in addition to the product and brand image confidence has improved, the confidence of other links have declined to varying degrees. Among them, the biggest and lowest decline in the confidence index is the profit potential, and has continued to decline since the second half of 2018, indicating that dealers are very worried about the profit outlook. The second largest drop in confidence was financial support from manufacturers, which was linked to the controversy over financial services exposed in the Mercedes-Benz rights incident in Xi'an in April.

Xiao Zhengsan, vice president of the China Automobile Circulation Association, called on dealers and manufacturers to rationally face the periodic adjustment of the car market, strengthen supply-side structural adjustment under the guidance of the market, rationally plan production capacity and sales targets, and tide over difficulties hand in hand.

Key Words:  Inventory  dealers  car market