SMM: June 30, the China Automobile Circulation Association released the latest "China Automobile Dealer inventory early warning Index" survey, the survey results show that in June 2020, the automobile dealer inventory early warning index was 56.8%, up 2.6% from the previous month, 6.4% higher than the same period last year, and the inventory early warning index is above the rise and fall line.
In terms of brands, the index of imports-luxury brands and mainstream joint venture brands rose month-on-month in June. Affected by the manufacturer's policy, independent brands focus on May, the sales target in June is relatively conservative, and the inventory level is declining.
The average daily sales index decreased in June compared with the previous month, and the market demand decreased.
As the epidemic was brought under control, China's car market gradually picked up in April, and the retail volume of passenger cars fell only slightly by 6% compared with the same period last year. In May, under the joint efforts of factory promotions and local policies, it grew by 2% compared with the same period last year, the first positive growth after 11 consecutive months of negative growth.
Compared with the previous two months, the auto market in June still has more supporting factors, such as the effect of local subsidy policy reached a phased peak, local auto shows began to start centrally, and "618" greatly promoted the increase in the middle of the year, all of which promoted the release of consumer demand to a certain extent. However, according to the survey results of the China Automobile Circulation Association, the average daily sales and market demand index decreased month-on-month in June, while the inventory index rose month-on-month.
As for the reasons for the decline in sales, the China Automobile Circulation Association pointed out that in late June, continuous heavy rainfall occurred in Zhejiang, Fujian, Jiangxi, Hunan, Guangdong, Guangxi, Chongqing, Guizhou and other places, causing floods, affecting consumer travel, a decline in passenger flow, and a slowdown in sales growth. In addition, Galaxy believes that there are two other reasons that cannot be ignored: first, consumer demand was substantially released in April and May, overdrawing subsequent market purchases; second, the epidemic in individual areas is on the rise again, and consumers' travel restrictions are restricted. it also affects the car market to a certain extent.
Nevertheless, the China Automobile Circulation Association said the overall market performance in June was relatively stable. Coincidentally, the Federation also pointed out that the retail market is expected to move steadily in June compared with the previous month, but due to the high base of switching sales in the same period last year, it will show negative growth in that month, falling or reaching 8% from the same period last year.
For the upcoming July, the China Automobile Circulation Association pointed out that it will not be too optimistic, with the gradual decline of the effectiveness of local government stimulus policies, coupled with the off-season of traditional car consumption, dealers may face greater pressure.
Half a year task assessment node, dealers exchange price for quantity to boost the terminal.
June is at the half-year task assessment node. According to the survey, some dealers use price for quantity to boost the terminal in order to complete the assessment task, which leads to fierce price competition, decline in bicycle profits and even upside down purchase and sale prices, and the income of dealers is reduced.
Just last month, in the "Automobile Dealers' satisfaction Survey report (2019)" released by the all-China Federation of Industry and Commerce, it was also pointed out that 47.6% of car dealers were in a state of operating losses in 2019. The root cause is the price upside down. According to the survey data, 70.3% of the dealers reported that the market price of their main products was lower than the wholesale price of the manufacturers, and 55.2% of the dealers could profit from the price difference only less than 10% of all the products they represented. Only 9.5% of the dealers can make a profit on more than half of their products. Therefore, for automobile companies, how to protect the profits of dealers and maintain the stability of the industrial chain has become an important issue.
For this reason, the China Automobile Circulation Association suggests that in the post-epidemic period, dealers should, according to the actual situation, rationally estimate the actual market demand, reasonably control the inventory level, enhance the profitability of the network, and strengthen the risk management of the channel. do a good job in capital management, control costs, and reduce operational risks.
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