China's auto market is not necessarily optimistic

Having experienced the swift rampage of the auto market in 2009 and 2010, no auto company has dared to give up on the Chinese market. Although the scale of the international auto show hosted by the Beijing-Shanghai exchanges in April each year is continuously expanding, the author here still wishes to stress that this year's Shanghai auto show is an unprecedented event. The capacity of the Shanghai New International Expo Center was used for the first time by the auto show. The exhibition halls of many mainstream car companies were ranked at the E7. In the past, the E5 was already the stage for exhibitors. If you are the leader of a strong media car line, then this year's Shanghai auto show will make you struggling. During the 7-day exhibition, you may receive more than 100 event invitations.

The auto market in 2011, and the auto market in the following years, will it be so good?

Recalling that former Shanghai General Manager Ding Lei, at the end of last year's Guangzhou Auto Show, said that the Chinese auto market will continue to maintain relatively rapid growth, but at the same time facing the macro environment is not conducive to the development of new car sales market risk. In other words, the auto market is confronted with the confrontation between the good of rigid demand and the negative of the macro environment. The author believes that although the medium-term point of view, the market demand driven by the second and third line market blowout will make the overall new car sales market show an increase, but in the short term, the macro environmental changes will bring a little chill to the Chinese auto market.

In fact, the sales figures for the first quarter of this year have been somewhat chilly. In addition to the January sales figures, the figures in February and March are worrying for the industry, as manufacturers press a lot of last year's sales to digest in January to relieve the pressure on the task this year. In February, many companies experienced a year-on-year decline for the first time in three years or even longer. What’s even more tragic is that in March of traditional running volume, there are still many companies’ sales are flat or lower than the same period of last year. digital. From April to July, it entered the traditional off-season of the Chinese auto market. A fierce price war that can be expected may be hard to avoid.

What has changed in the macro environment this year? First of all, the policy of industrial revitalization is very low. When I chatted with relevant government officials in China, I received information that compared with the urgent need of large funds in early 2009, and the large turnover industry to boost the market to resist the risk of financial crisis, I continue to support today's inflationary pressure. There is little room for the automotive industry. The positive side of the policy turned to a tertiary industry that can accommodate more jobs and invest relatively less. If we admit that in the past two years, policies have driven the excessive development of the auto market, then after the policy is withdrawn, the auto market will inevitably have bubbles that need to be squeezed out. The industry generally believes that in at least the first-tier and second-tier cities (quotation picture parameters), there is a clear overdraft in car consumption in the first two years. Now, the days of loan repayment seem to be coming.

Second, overcrowding of urban resources led to restrictions on purchases. On December 23 last year, Beijing sold nearly 200,000 vehicles a night. The author did not check the relevant information, but intuitively, it is estimated that this will be a city's eternal sales record in one day. By January of this year, almost all car dealers had placed the longest annual leave ever, and after the Spring Festival, some continued to operate, and some had not reopened. After the restriction of purchase in Beijing, Shanghai and Guangzhou successively introduced some policies to restrict car purchases, but the intensity was not as great as that of Beijing. According to the author's understanding, at least a dozen major Chinese cities have already brewed a policy to stop blocking and wait for the time to implement. Objectively speaking, the traffic conditions in second-tier cities such as Hangzhou, Tianjin, Xi'an, and even Wuxi and Suzhou are not inferior to the "first block." Furthermore, although the auto consumption capacity of second- and third-tier cities and even the fourth- and fifth-tier cities is certainly ready to go, are these places really ready to welcome the auto market blowout in public resources? What we often see is that roads in many urban-rural junctions are much more crowded than urban roads. In small and medium-sized cities that are planned in a single city center, once the vehicles grow rapidly, the traffic pressure can be imagined. Limiting the purchase of cars may not be a matter of time.

Again, under the inflationary pressure that is difficult to predict at the end, the cost of living for Chinese urban residents is rapidly increasing. From the cost of driving alone, the price of oil has risen from 6.68 yuan last year to 7.78 yuan today. It took less than 8 months. And Volkswagen's psychological expectation of this year's oil price may be close to 10 yuan.

The cost of oil alone will increase by one third. The constant high parking fees make people who are driving to work frightened. I remember that five years ago, someone said that a famous parking lot in Lujiazui, Shanghai's Pudong Lujiazui had a ridiculously high monthly salary of 1,500 yuan. However, if Beijing office workers work overtime for more than 13 hours a day, they may not be as good as a ticket. . With the exception of cars, almost all other living costs have doubled in the past year, and are still full of the possibility of continued rise. This has a great influence on the middle-income class of the largest running car population. At least, many of my friends in Beijing have given up driving, and as long as public transportation can really make people comfortable, more people will choose the subway. Still referring back to the second and third tier cities, the auto consumption of these cities is similar to the auto consumption of Beishangguang ten years ago, and there are more irrational factors outside the utility. In some small cities, the most convenient transportation may be bicycles. Because most commuters travel within 5 to 10 kilometers a day. Perhaps the economic affluence will inspire them to become hedonistic hedonists, but perhaps this market is more sensitive to rising cost of living.

Finally, I have to say that Japan's 311 earthquake will affect the follow-up impact of the auto market this year. It is difficult to predict. It is difficult to see the days of peace because of nuclear leaks. Japanese companies keen to use indigenous parts and components are of course the most affected, with Nissan, which has the largest number of factories in the earthquake zone, the most troublesome. It is said that Dongfeng Nissan is now in a state of sharply reduced production, while inventory has been used more. In addition, Toyota and other companies will also have short-term suspension of production in April and May. At the same time, the globalized procurement system has made Japan also affect some European and American companies. Shanghai GM also has the possibility of short-term suspension of production in the near future, while North American GM is more affected. If developments eventually lead to many companies having to stop production for a longer period of time, then the auto market will naturally have a greater impact. However, in the context of the weak market in the first quarter, short-term suspension of production may also be an opportunity to adjust market supply and demand, and it will become a good thing. Fortunate enough, you can only walk.

Going back to say that corporate executives are obsessed with the rigid demand. Yes, calculating rigid demand based on China's population base, then perhaps the Chinese market is enough for the auto industry to eat for 30 to 50 years. However, we can't imagine that China's car ownership is comparable to Europe and the United States. What will China's energy demand, traffic conditions, and environmental conditions look like? Even from a microscopic point of view, there are several joint venture companies that have begun to deploy in the small and medium-sized cities in which Chinese car companies are involved. However, in terms of the overall automotive industry, most companies’ third and fourth line Raiders have not yet been launched. Products and outlets Without follow-up, the real blowout in this market may take four to five years. In addition, since the beginning of 2010, the auto market has become polarized. In the past, the Chinese auto market has basically risen as you have risen and everyone has gone up, but now you have seen me slow and you have risen. The month has become particularly evident. Today, strong companies such as Volkswagen, General Motors, and Nissan are leading in technology and marketing. These companies are also represented in the second and third-tier cities that have aggressively entered the second and third tier cities. The characteristics of the brand loyalty start-up period have emerged in the Chinese auto market. Subsequent developments may lead to dry drought and drowning. China's car companies and some joint venture brands that are hard to say that they are struggling to work hard are likely to usher in a difficult time.

I do not think that in the early part of 2009, it was difficult to say that the rational development of the industry to support the rapid development of the auto market so far, it is a bad thing to temporarily slow down. The increase in the number of possessions makes the after-sales chain in an overloaded state, requires the car companies to have the energy to supplement; the production capacity for three years at full capacity also needs some adjustments; the overbearing earnings report that was completed by the two-year bull market also needs to be in one. Buffering period to digest; the most important thing is that companies, especially Chinese local brand companies need to judge their own direction and persist in a relatively rational market environment.

However, similar to the consumption habits of the capital market, it makes it difficult for the Chinese auto market itself to appear rational. In fact, even in 2009 and 2010, even if there were national energy subsidies policies, it would not be cheap to choose to buy a car even if the manufacturers did not allow profit. Looking back at the two bear markets in 2004 and 2008, even if the price is favorable, it will be difficult to attract customers. Therefore, in looking at the huge market space brought by the second and third lines, when enjoying the warm sun in Shanghai in April, the company may also have to prepare winter clothes in advance to overcome the short-term pains, perhaps the earliest this winter will come this summer.