Since the end of April, as the epidemic has gradually improved, Shanghai has promoted the resumption of work and production one after another, and the automobile sector has continued to rebound by nearly 24%. Sales of new energy vehicles in April were also very encouraging, with sales of 299000 new energy vehicles in China in April 2022, up 44.6 per cent from a year earlier, according to the China Automobile Association. In addition, a new round of "car going to the countryside" policy is expected to be introduced in the near future to further promote the sales of new energy vehicles, according to the China Securities News.
Without fear of external disturbance, the permeability of new energy vehicles increased again in April.
According to TrendForce survey data, global sales of new energy vehicles (including pure electric vehicles, plug-in hybrid electric vehicles and fuel cell vehicles) totaled 2.004 million in the first quarter of 2022, an increase of 80 per cent year on year.
Domestically, according to the China Automobile Association, China sold 299000 new energy vehicles (+ 44.6%) in April 2022, down 38.3% from the previous month. Monthly sales correspond to a penetration rate of 25.3%, a sharp increase of 3.7 pct. from January to April 2022, cumulative sales were 1.556 million (+ 112%), and the cumulative sales corresponding to the penetration rate of new energy vehicles were 20.2%.
The impact of the domestic epidemic on the automobile industry is mainly reflected in the April sales data, adding up that April is the traditional off-season of the car market, and a sharp month-on-month decline in April sales is predictable.
It is worth noting that even in the most difficult period, April sales still recorded an increase of more than 40% compared with the same period last year, a year-on-year growth rate that can be said to be quite resilient, reflecting the strong momentum of the development of new energy vehicles in China.
A new round of "car going to the countryside" policy is expected to further boost car sales in June.
According to the China Securities News, several industry insiders said that the policy of going to the countryside is expected to be introduced in early June, encouraging cars with models of less than 150000 yuan (including fuel vehicles and new energy vehicles), with subsidies ranging from 3000 yuan to 5000 yuan per vehicle. Industry experts predict that going to the countryside will boost sales of 200000-300000 fuel vehicles and 300000-500000 new energy vehicles.
Since the beginning of this year, automobile consumption stimulus policies have been introduced in many places one after another. The State Council has twice mentioned encouraging cars to go to the countryside:
In February, the State Council issued the 14th five-year Plan for promoting Agricultural and Rural Modernization, encouraging areas with conditions to carry out actions to upgrade rural household appliances, implement subsidies for furniture and household decoration to the countryside and a new round of cars to the countryside, promote the upgrading of consumer durables for rural residents, and emphasize the improvement of recharging infrastructure in county towns and central towns.
In April, the General Office of the State Council issued the opinions on further releasing consumption potential and promoting the sustained recovery of consumption, pointing out that it is necessary to focus on cars and household appliances, guide enterprises to carry out sales promotion in rural areas, encourage areas with conditions to carry out new energy vehicles and green smart home appliances to the countryside, and promote the construction of supporting facilities such as charging piles (stations).
Throughout history, the three major policy stimulus effects in the automobile industry since 2000 have been remarkable:
Domestic car sales grew by leaps and bounds from 2009 to 2010: 6.6%, 45.5% and 32.5% respectively from 2008 to 2010.
Domestic car sales grew steadily from 2015 to 2018: after October 2015, the growth rate of passenger car sales reversed year-on-year, rising 13.3% in October and 23.7% in November. Passenger car sales grew by 14.9% for the whole of 2016.
The overall growth rate of car sales from 2019 to 2020 showed an improving trend: the high base of car sales superimposed the impact of the epidemic since the beginning of 2020, and the effect of the stimulus policy was weak. Passenger car sales in 2019 were-9.6%,-5.9% and 6.5% respectively compared with the same period last year.
The increase in sales also led to an increase in relative earnings in the sector:
From 2009 to 2010, the yields of cars, passenger cars and spare parts relative to the Shanghai and Shenzhen 300 were 128%, 212% and 120%, respectively.
From 2016 to 2017, the yields of automobiles, passenger cars and spare parts relative to the CSI 300 were 2%, 1% and 3%, respectively.
From 2020 to 2021, the yields of cars, passenger cars and spare parts relative to the Shanghai and Shenzhen 300 are 9%, 37% and 0%, respectively.
The number of cars in rural areas increases the space for the large automobile industry has significant configuration value.
The current domestic epidemic situation is repeated, in the context of steady macro-economic growth this year, the introduction of the policy of cars going to the countryside will be an important policy means to stabilize growth and promote consumption.
Compared with the previous round of policy stimulus, the current demand for passenger cars is not pessimistic. At present, the car inventory is low, but under the relief of the core, there is more room for improvement in production and marketing; at present, the purchase restrictions in license cities have been relaxed, and it is expected that the new energy indicators in first-tier cities will be liberalized; at this stage, the recognition of new energy in the sinking market has been greatly improved compared with the previous round of policy stimulus, and it is expected to usher in a rapid improvement in space under policy stimulus.
According to the National Bureau of Statistics, there are 26.4 cars per 100 rural households and 44.9 cars for urban residents in 2020. According to the calculation of urban and rural population and 100-person car ownership, the number of 100-person car ownership in rural areas is about 8.4 less than that in urban areas in 2020, and there is a broad space for the improvement of car ownership in rural areas.
At present, the consumption and income growth rate of domestic rural residents is higher than that of urban residents, which has great potential. Effective and accurate industry stimulus policies are expected to boost demand in the automobile industry.
Chuang Chuang Securities believes that the automobile industry has significant allocation value: in the short term, from the perspective of production and supply, with the effective resumption of work and production in Shanghai and its surrounding areas, the worst is over. With the policy stimulus, the resumption of social and economic activities caused by the epidemic, car demand is expected to recover significantly.
The whole vehicle suggests that we should pay attention to Changan Automobile, SAIC, BYD and Great Wall Motor, which are uplink in the product cycle. Automotive electronics related parts suppliers suggest to pay attention to Topp Group, Berkeley (EPB+ line control), Xingyu (smart car lights), Zhongding (empty suspension), Desai Xiwei (intelligent cockpit system) and Koboda (light control), which are expected to achieve domestic substitution and price-volume rise.