Review of National passenger car Market in July

Retail:Retail sales in the passenger car market reached 1.597 million units in July, up 7.7% from July last year.Achieved the strongest positive growth since May 2018. The national passenger car market accumulated 9.309 million retail units from January to July of 20 years, with retail sales down 18.5 percent from the same period last year, up 4 percentage points from January to June.

This year's cumulative sales volume was 2.12 million vehicles less than the same period last year, accounting for about 10% of the total retail sales for the whole of last year. This year's retail decline was mainly due to the early Spring Festival and epidemic factors, affecting 2.08 million vehicles in the first quarter, while retail sales lost only 170000 vehicles in the second quarter compared with the same period last year. There was an increase of 120000 vehicles at the beginning of the third quarter in July, reflecting the rapid recovery of the industry.

Retail sales in July fell 3.7 per cent from June, down 7 per cent from the average July growth rate in 2011-2019 and 4 percentage points higher, showing a strong trend of consumption in the off-season.

This year, the V-shaped reversal trend of the year-on-year growth rate of passenger car market across the country has become increasingly clear.

这First of all, it is the result of the effective policy of overall epidemic prevention and economic development.China's economy continues to recover, and the operation conditions of various industries continue to improve, promoting the release of car demand. In particular, the truck market with a high growth rate of more than 50% for four months is also rare in history.

The second is: the overall strength of the regional market.Although the scale of floods along the Yangtze River set a new record in this century in July. However, at present, the epidemic situation of COVID-19 in China has been well controlled, especially in Beijing, the epidemic has been quickly controlled in the short term, the order of production and life has been steadily restored, and the overall recovery of car consumption has been further strengthened.

The third is: the gradual resumption of offline marketing activities to promote the consumption of the car market is obvious.The recent top exhibitions such as Chongqing Auto Show, Changchun Auto Show and Chengdu Auto Show have paid attention to the market, which reflects the irreplaceable effect of offline marketing.

The fourth is the rebalance of regional demand structure under the epidemic.In the central and western regions, due to the detention of migrant workers and the increase of local entrepreneurship and employment, car buyers began to release in the central and western regions.

The fifth is the internal circulation of high-end consumption.The early high-end consumption is mainly overseas tourism shopping and domestic long-distance tours, recently affected by the epidemic to domestic self-driving tours, boutique small group tours and other ways are more obvious, superimposed the cyclical impact of summer vacation, a strong promotion to the car market.

Three-stage market segment analysis:

1) luxury car retail sales rose 30% in July from a year earlier, down 4% from June, and the market share remained at an all-time high of 15%. The high-end demand for consumer upgrading and the discounted prices of luxury models have fallen, bringing price advantages that quickly lead to a pick-up in market segments.

2) retail sales of mainstream joint venture brands increased by 4% in July from a year earlier, and decreased by 6% compared with June.

3) the overall improvement of independent brands in July was obvious. Retail sales increased by 5% year-on-year, 2% month-on-month and 33.6% market share, up 1.5% from June.

In July, the production and marketing performance of the main manufacturers of independent brands was outstanding, achieving a good start in the second half of the year. FAW Hongqi and Changan Automobile have achieved year-on-year growth of more than 50%. Chery Automobile, Great Wall Motor, GAC MOTOR and others have also shown a good trend of year-on-year and month-on-month growth.

The Chinese market has become a safe haven for international car companies. In July, the retail share of Japanese brands was 25.1%, lower than Germany's 27.3%, but the Japanese wholesale share reached 26.3%, higher than Germany's 25.9%. The main Japanese brands strengthened in an all-round way. The trend of American brands has improved significantly, and the main American brands are growing compared with the same period last year.

Exit:According to the July data of the Federation of passengers, domestic car exports were 34000, down 29.0% from the same period last year. According to the customs data by country, at present, automobile exports are low to developing countries and strong to the United States and some Western European countries.

Production:The production of passenger cars in July was 1.689 million, up 13.3 percent from July last year. From January to July, the cumulative production of passenger cars was 9.152 million, down 18.2 percent from the same period last year, and the output decreased by 2.04 million. Luxury car production increased by 37% in July compared with the same period last year. At present, the supply chain of auto parts in Europe has gradually resumed production, and the risk of chain breakage in the supply chain has been basically eliminated.

Wholesale:Manufacturers sold 1.636 million vehicles wholesale in July, up 7.4 per cent from July last year and down 4.1 per cent from June. This is also three months of wholesale growth compared with the same period last year. From January to July, wholesale sales totaled 9.305 million vehicles, down 18.8 percent from the same period last year, or 2.17 million vehicles. Over the years, most enterprises' high-temperature holidays span from July to August, and this year's holidays are more concentrated in early August, and the wholesale trend of manufacturers in July is more smooth.

Inventory:The production and marketing of the industry is running well on the whole. Factory inventory increased by 53000 vehicles in July and decreased by 280000 vehicles from January to July. The channel inventory decreased by 1000 vehicles in July, and the dealer inventory remained relatively stable from May to July.

New energy:Wholesale sales of new energy passenger vehicles in July were 83000, up 28.3 per cent from a year earlier and down 3.7 per cent from June. Of these, plug-in hybrid sales were 16000, down 7 per cent from the same period last year. Wholesale sales of pure electric vehicles were 67000, up 37 per cent from a year earlier.

The trend of high-end electric vehicles is obvious in July.Tesla, Inc. still ranked first in pure electricity with 11000 vehicles, but BYD's overall sales of new energy reached 14000, returning to the first place of new energy.。

The A00 class of pure electric passenger cars accounted for 20% of wholesale in July and is expected to be launched next month. In July, the performance of sole proprietorship and new power new energy was relatively strong, with a total wholesale volume of 14000 new power brands, an increase of 174% over the same period last year, making it an important force in the new energy vehicle market. In July, 30,000 ordinary hybrid passenger cars were wholesale, an increase of 36 percent over July last year.

Prospect of National passenger car Market in August

There are 21 working days in August, one day less than that in August last year. The high-temperature holidays of some automobile companies are concentrated in the first ten days of August, while the production departments are concentrated on holidays to meet the inventory demand. Most of the marketing departments do not have a rest and pay close attention to the terminal market. Production and sales growth is relatively steady.

With the overall control of the epidemic situation in Beijing and the gradual decline of the response level, the epidemic situation in the eastern, central and southern automobile markets has entered a normal management and control stage, local marketing activities are blooming everywhere, and the terminal auto show is more popular. Chengdu auto show brands received a large number of intended orders, delivered to the store in August, also promoted the autumn marketing earlier, while the dissemination of new products promoted at the auto show will also boost the car market in August.

Cars under the normalization of the epidemic have also become the first barrier for travel safety. In the second quarter of this year, some areas with better control of the epidemic gradually began to return to school, bringing a wave of demand for cars. August is also a good time to buy a car before school season. Under the normalization of the epidemic, there is a stronger demand for cars to take children to and from school, and new purchases may lead to a sustained recovery in the new and used car markets.

The market of new energy vehicles is accelerating in an all-round way, the independent brand A00 class cars are gradually expanding, and the joint venture new energy products continue to be launched.To bring a large increase in new energy compared with the same period last year.

Among the models listed recently, Wuling Hongguang MINI may explore the future upgrading direction of low-speed electric vehicles and inject new vitality into the A00 market. The launch of BYD Han will not only improve the product range of the enterprise, but also enter the medium-and high-end car market with fewer competitive models and more test of product competitiveness, which can be expected in the future.

Since the second quarter, the demand for cars has grown rapidly, promoting retail sales to be strong, manufacturers' production and sales are relatively sound, and the current channel inventory is at a low level. The high-temperature holiday in August is conducive to inventory callback and structural optimization, which is conducive to the wholesale increment of the inventory cycle from August to October.

Under the impact of the world epidemic, China's supply chain is stable, resulting in an increase in the export of high-end models and a downturn in mid-and low-end exports. the growth of the car market still depends on the increase of domestic demand.

The profit of the automobile industry fell 21% from January to June this year, but the sales revenue of the automobile industry increased by 14% in the second quarter, and the profit rebounded by 26% compared with the same period last year. With the improvement of business operations, the reduction of the annual target is small, which also gives automobile companies more resources to promote the market to strengthen in the second half of the year.

The national automobile brand must be promoted.

Recently, General Secretary Xi Jinping came to the General Research and Development Institute of China FAW Group and made it clear that he would promote the national automobile brand.The General Secretary's speech pointed out the direction for the development of independent brands in the 14th five-year Plan, strengthening core technology and developing national brands. Make full use of the tuyere of the development of new energy vehicles and the combined resources of the new four modernizations, give full play to the spirit of concentrating efforts to do great things, and promote China's automobile industry from big to strong.

On July 30, the political Bureau of the CPC Central Committee held a meeting to analyze and study the current economic situation, pointing out that in the face of medium-and long-term problems,We must understand it from the perspective of protracted war and speed up the formation of a new development pattern in which the domestic cycle is the main body and the domestic and international cycles promote each other.This is also an opportunity and challenge for the national automobile consumer market. To speed up the formation of a new development pattern with the domestic great cycle as the main body and the domestic and international double cycles promoting each other, we need to make the greatest efforts to promote consumption, especially the popularization of consumption to promote independent development and form a virtuous circle. The main engine factory thinks about how to focus on the domestic consumer demand and make the national brand bigger and stronger in the future pattern dominated by internal circulation.

At present, Beijing has proposed to increase the car purchase index based on families, which is also of positive significance to improve the car purchasing environment and create a more colorful life for people and cars. In the future, the development of autonomy still needs to promote the popularity of families with car consumption, especially when China enters the middle-aged society, the proportion of young people is getting smaller and smaller, and the focus of consumption is to promote the purchase of cars by the middle-aged and elderly, so as to maximize the coverage of car buyers.

A careful understanding of the speeches made by the General Secretary should be the strategic guidance for the important work direction of the industry in the next few years. During an inspection tour of SAIC in May 2014, President Xi Jinping stressed that the development of new energy vehicles is the only way for China to move from an automobile power to an automobile power. China's new energy vehicle market share has increased rapidly in recent years, reaching 50% of the world share in 2019, reflecting the good effect of the combination of top-level strategic design and comprehensive policy guidance.

The share of independent brands in June 2020 is 32%, which is much lower than that in previous years. At present, independent market share is back to the bottom, which is the most difficult period. In the future, the realization of independent control of the industrial chain still needs the continuous strengthening of independent brands.

China's cars accounted for 32% of the world's share in the first half of 20 years.

Affected by the epidemic in the second quarter of 2020, the world auto market continued to remain in the doldrums, but sales in some areas rebounded. China's automobile market has gradually stepped out of the impact of the epidemic, and has shown a trend of reversal, and the epidemic situation in Europe and the United States continues to worsen, forming a complex situation of the world automobile market in 2020.

From a worldwide point of view, the rebound effect of Chinese car companies in the second quarter is the most prominent. China's world share of car sales reached 22% in the first quarter and 42% in the second quarter.China's car sales reached 32% of the world in the first half of the year, up 5 percentage points from 27% in the first half of 2019.

From the perspective of China's own development, China's automobile market still has great potential for development. As of June 2020, the number of cars in the country has reached 270 million. In the first half of 2020, 14.14 million motor vehicles were newly registered, 980000 fewer than in the same period last year. Of these, 10.42 million cars were newly registered, a decrease of 2 million compared with the same period last year. The demand for motorcycles increased rapidly in the first half of the year, which also reflects that there is a lot of room for expansion of the demand for cars.

The number of people with driving licenses dropped sharply within one year in the first half of 2020, and the number of licensed drivers this year is 7.28 million, which is higher than the scale of 30 million new drivers in previous years. There is still huge room for growth in the second half of the year, and it will also give a good boost to new car sales.

The average age of private cars in the United States has reached 11.8 years, and the number of cars has set a record of more than 278 million. China's car ownership is close to that of the United States in the first half of 2020, but it has not yet become the first in the world. In the second half of the year, China's auto market is bound to continue to lead the world, and China's car ownership is expected to be side by side with or even surpass that of the United States.

New energy has entered a high growth cycle

The national growth rate of new energy passenger vehicles in July was 28% compared with the same period last year, which is basically in line with our expectations for double-digit growth of new energy vehicles in the second half of the year.

The growth of new energy vehicles in the first half of the year was mainly driven by the growth of new forces represented by Tesla, Inc... The sales of mini electric vehicles are expected to pick up sharply in the second half of the year, which will promote the sustained double-digit growth of new energy vehicles in the second half of the year, and further form a new cycle of high growth of new energy vehicles in the next few years.

As the effect of mini electric vehicles in promoting industrial technology upgrading is relatively not obvious, it is easy to form the risk of low-end dependence.Therefore, the early new energy subsidy policy has always strongly suppressed the A00 development and promoted the development of high-end and high-quality.. The share of mini A00-class electric vehicles fell from nearly 70 per cent to less than 30 per cent.

The second half of 2019 entered the minimum share period of A00. As a result of entering a new low era of subsidies on June 23, 2019, the market demand for A00-class electric cars shrank sharply. Some of the demand has been converted into low-speed electric cars after subsidies have fallen.

As the current independent brand development of new energy vehicles needs to enhance the scale, pull the industrial chain to grow more strongly, and build private consumer confidence. Therefore, the miniature A00 electric vehicle has a good incremental environment foundation. This year's A00 market has been gradually launched, equipped with lithium iron phosphate batteries and other low-cost measures gradually launched, low-cost new cars launched more.

Our industry has been calling for the promotion of new energy vehicles to the countryside, and recently the relevant ministries and commissions of the state have strongly launched the propaganda work of going to the countryside. The policy of going to the countryside of new energy vehicles must have a certain incremental effect, so the sales of new energy vehicles in the second half of the year with a low base will have a very good effect.It is expected that the A00 class models such as Wuling and Tesla, Inc. 's high-end models will become the leading products in the car market.

The timing of high-end electrification of independent brands is just right.

Recently, the sales volume of China's new power car manufacturing enterprises has been strong, and it has been well recognized by the international capital market, which is also higher than expected. At present, the high-end development of independent brands is mainly looking for the opportunity market, while such a blank opportunity market is relatively small in the traditional fuel vehicle market. In addition to the Red Flag brand can develop the fuel vehicle market and achieve a purchase enthusiasm of some patriotic consumer groups, in the field of traditional fuel vehicles, other independent brands have not made much breakthrough.

In the field of new energy vehicles, due to the relative lag in the layout of international brands, the huge price blue ocean characteristics of the Chinese car market have been formed, while the Tesla, Inc. car has set a new benchmark for the sales of high-end electric vehicles. this for the entire domestic car enterprises in the electric layout, there is a good opportunity for price and product differentiation.

From the product level and supporting level, due to the relatively strong electrification development time of domestic automobile enterprises, the relatively perfect financial resources of state-owned enterprises, batteries, motors and other fields have better supporting resources. At the same time, compared with the conservative patented technology of hybrid power, some of the patents of electric vehicle technology are relatively open, and there are relatively more opportunities for the coordinated development of independent brand electric vehicles.

Therefore, the development of high-end electrification of mainstream brands is the basis of good internal and external technology and resources. At present, some independent brands continue to invest heavily in research and development, so there have been certain cases of high-end independent brands promoted by strong domestic resources, and the future should be a period when it is relatively easy to obtain initial results.

Self-made lithium battery of automobile enterprise group is the future trend.

Engine and power battery are the power core of vehicles, and powertrain is the core technical resources that automobile enterprises must have in the competition in the future. From the development stage of the automobile market, the current layout of mainstream car companies is similar to that of China's heavy truck market group, and some second-line heavy truck enterprises adopt a similar cooperative layout, with multi-track supply to ensure battery demand.

At present, the market scale of new energy passenger vehicles is only 1 million, coupled with many participating manufacturers, the number of single models is relatively small, and the demand for batteries is also small. And the whole vehicle enterprises have not fully grasped the battery technology, have not understood and mastered it, so the current supporting mode should be a last resort. This is similar to many small heavy truck enterprises, looking for supporting resources everywhere and cooperating with independent engine enterprises to form the characteristics of an alliance.

The autonomous control of the power system is extremely important to the automobile enterprise group. at present, it is difficult for the truck enterprises without self-produced engines to become bigger and stronger. Since engines account for about 20% of the overall cost of cars, batteries currently account for about 30% of passenger cars. At present, the achievements of the power transformation of the top three independent private enterprises are prominent, and BYD's independent battery system is extremely powerful, and then the honeycomb power established by the Great Wall and Geely's new energy battery research have also invested huge resources, which is also achieving initial results.

At present, the development of the new energy industry chain is similar to the industrial layout in the initial stage of the automobile, and the normal pattern of the leading industrial chain of the whole vehicle enterprise will be gradually formed in the future. The supporting system of self-made lithium batteries made by automobile groups will still be accelerated.