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[YesAuto Deep Comment] After a golden decade of rapid progress, my country's auto industry has gradually entered a period of stable development. As the growth rate slows, the problem of peak auto sales has begun to linger on auto people. Will car sales peak? When will car sales peak? What major changes will take place in the industrial structure after auto sales peak? What are the pros and cons for consumers to gain from it? For many questions, please see the in-depth analysis of this issue.

●What is “Deep Commentary Questions”?

Deep Commentary Questions ” is the first column created by Autohome for industry-end users. It is written by senior practitioners in the auto industry to exclusively analyze/demystify major industry events. In addition to lively appearances, we want to present you with exploration and thinking about the nature, cause and effect, and future possibilities of things.

The industry commentators in this issue -the intelligent electric automobile expert group, consists of a group of automobile professionals with master's and doctoral degrees, and more than ten years of work experience in the automobile industry. They are distributed in universities, automobile industry associations, parts companies, OEMs, consulting companies, etc. The formation of senior people in the industrial chain. As the auto industry is transforming and upgrading to intelligent and electrified, we will share the new technology of the auto industry with more people.

The author of this article: Hu Yufeng, has successively engaged in automobile electronic control development, vehicle testing, energy saving and new energy automobile industry consulting, etc., has participated in the national 863 major project, the Ministry of Industry and Information Technology “Energy Saving and New Energy Vehicle Technology Roadmap”, and the Chinese Academy of Engineering More than 10 major research/actions such as “Strategy”. He is good at review analysis and policy analysis of the automobile industry.

Highlights of this issue

★Looking back at the golden fifteen years of the auto market, policy stimulus is not the leading force for the surging sales, but the release of demand is the fundamental reason;
★The key factor that determines the peak of automobile sales is demand saturation, including new demand and replacement demand;
★After reaching the peak, the auto industry will enter the inventory era from the incremental era, the “four grabs” feature bursts out, and the competition becomes fierce;
★In general, the peak sales volume will be superimposed on environmental factors such as tariff cuts and liberalization of shareholding ratios, giving consumers greater car purchase dividends;

1. Fifteen years of gold, gone forever

“30 million vehicles”, “40 million vehicles”, and “50 million vehicles”. These figures are the predicted numbers that we have often heard on major automotive forums and privately in recent years, and the target of prediction is precisely Peak annual sales volume in China's auto market.

That's right, the discussion about the peak of car sales has continued to rise in recent years, and what is behind it is the anxiety, anxiety and even fear of all walks of life. At the 2017 China Automotive Forum, Vice President Dong Yang’s “50 million vehicles” remarks made many people feel very relieved. Regardless of whether the number is right or wrong, in fact, we should pay more attention to the following three issues: Automobiles Will sales peak? What are the impacts and changes after reaching the peak? How do car companies respond?

I don't know the past, and it's meaningless in the future. To talk about Dafeng, we must first look at our past fifteen years of gold. The reason why it is called the Golden Fifteen Years is because before China's accession to the WTO in 2001, my country's auto industry was in a tepid state for a long time, and there was even an embarrassing situation of widespread losses in the 1990s. After China's accession to the WTO, my country's auto industry has begun to revitalize its resources, coupled with the improvement of the national economy, both sides of supply and demand have synchronized efforts. The golden fifteen years of 2002-2016 began to take place.

How hot is the golden fifteen years? The highest growth rate has reached 46.2%, and the sales volume has increased by more than 4 million vehicles a year, which is equivalent to the annual sales volume of the entire Indian market in 2017. Even in the low position, the increment of more than 1 million vehicles can be easily achieved. Don't underestimate these more than 1 million vehicles. The Russian market, which is the TOP10 global sales in 2017, also sold more than 1 million vehicles.

Car sales in various countries
Rank Country 2017 sales (ten thousand vehicles)
1 China 2888
2 United States 1724
3 Japan 523
4 India 401
5 Germany 344
6 United Kingdom 254
7 Brazil 224
8 France 210
9 Italy 197
10 Russia 159
Tabulation: Industry Commentator of Auto House

In the golden fifteen years, the huge market has caused my country's joint venture vehicle companies to grow rapidly from less than 10 in 2002 to more than 30. In 2016, the number of domestic vehicle companies with production statistics reached 96. The market is full of enthusiasm. Car companies are buying horses one after another, and advertisements for selling cars are overwhelming. It has become the consensus of all walks of life that cars are the big gold masters.

2. More important than policy is the release of market demand

Although my country has successively introduced stimulus policies such as energy-saving and beneficial car purchase subsidies, halving the purchase tax, and 25% off the purchase tax, most of these policies are for early overdraft demand. Once the preferential policies pass, sales growth usually declines rapidly.

Partial car preferential policies
Policy name Policy content
In 2009, the auto industry adjustment and revitalization plan The purchase tax rate for cars with a displacement of 1.6 liters and below will be adjusted from 10% to 5%. It will be levied at 7.5% in 2010 and restored to 10% in 2011.
Cars go to the countryside, and 5 billion yuan will be allocated to provide a one-time financial subsidy to farmers’ scrapped tricycles and low-speed trucks in exchange for light-duty trucks and minibuses below 1.3 liters
In 2010, the first stage of energy-saving products benefiting people project Arranged 10.7 billion yuan to provide a one-off subsidy of 3,000 yuan per vehicle for vehicles with a fuel consumption of 1.6 liters and below and fuel consumption below 6.9 liters per 100 kilometers, and a total of 3.57 million energy-saving subsidized vehicles have been supported.
In 2011, the second phase of the energy-saving products benefiting people project 6 billion yuan will be allocated for a one-off subsidy of 3,000 yuan per vehicle for vehicles with a fuel consumption of 1.6 liters and below and fuel consumption below 6.3 liters under a 100-kilometer comprehensive working condition
In 2013, the second phase of the Huiming project for energy-saving products Vehicles that require energy-saving subsidies must not exceed 5.9 liters of fuel consumption per 100 kilometers
In 2015, the State Council executive meeting series of decisions Implement a preferential policy of halving the vehicle purchase tax for the purchase of passenger cars with a displacement of 1.6 liters and below
In 2017, reduce the purchase tax on passenger cars with displacements of 1.6 liters and below The purchase tax of related models is levied at 7.5%
Tabulation: Industry Commentator of Auto House

For example, after the purchase tax rose to 7.5% in 2010 and 10% in 2011, the sales growth rate dropped from 46.2% to 32.4%, and then fell to 2.5% by a cliff. In total, the sales volume in the three years from 2009 to 2011 The added value is more than 1 million vehicles/year, but it was overdrawn in the first two years.

The improvement of the national economy
years Deposit balance of urban and rural residents (trillion yuan) Per capita annual income of urban residents (yuan)
2001 8.7 6860
year 2006 16.2 11759
year 2010 30.3 17,175
2016 60.65 23821
Tabulation: Industry Commentator of Auto House

The author is not accusing the policy of right or wrong. In fact, there are other considerations for the introduction of relevant stimulus policies under the circumstances, so I won’t repeat them here. What I want to say is that from 2.364 million vehicles in 2001 to 28.028 million vehicles in 2016, the increase of more than 25 million vehicles mainly depends on the release of demand, which is a direct drive of the improvement of the national economy.

3. The market has its limits, when the peak is in progress

Whether it is 15 years of gold or demand release, our biggest concern is still whether sales will peak?

Let’s look at Japan first. After the recovery after World War II, the sales of domestic Japanese cars exceeded 1 million for the first time in 1967, and exceeded 3 million in the 1970s. Since then, with the slowdown of economic development, sales slowly climbed to 7.079 million in 1996 and then began to fall , Currently stable at about 5 million vehicles per year.

American car sales exceeded 2 million units in 1930, and have maintained a rapid development trend since then, breaking through 10 million units in 1965, breaking the 15 million mark in 1978, and reaching a peak of 17.81 million units after 2000. At present, there are It fell back and stabilized at around 17 million vehicles.

It can be seen from this that since it is a single market, there must be a peak time, and China is also unavoidable. The essence behind this is the saturation of demand for car purchases. The timing of Dafeng's appearance depends on the following two factors to judge: economic growth and sales growth.

Judging from the experience of Japan and the United States, its GDP growth rate has fallen behind, and its sales growth rate has also fallen rapidly, eventually reaching a peak quickly and stabilizing within a certain numerical range. From this perspective, my country's GDP growth rate has entered a stable growth range, and the growth rate of automobile sales has also dropped to a low of 3%. Therefore, even if stimulus policies are introduced, they will not be able to stop the peaking moment in the next few years.

What is prominent behind this is the word demand, including new demand and replacement demand (for old cars). The most intuitive factor for judging this demand comes from the number of newly-increased urban employees (the main car buyers). New jobs are stable, and demand for car purchases is also stable.

New urban employment situation
years Newly increased number (ten thousand people)
year 2002 715
year 2006 1184
year 2010 1168
year 2011 1221
2012 1266
year 2013 1310
Year 2014 1322
2015 1312
2016 1314
2017 1351
Tabulation: Industry Commentator of Auto House

In other words, in the next few years, even if my country's car sales continue to grow for several years or even more than a decade, it will only be similar to the previous slight growth in Japan and the United States, with an increase of hundreds of thousands or tens of thousands. From this point of view, it is difficult for our peak sales to exceed the 35 million mark.

Fourth, bid farewell to the incremental hardship and welcome the stock, and the “four grabs” feature to fight the bayonet

Dafeng means that the auto market will enter the inventory era from the incremental era. In the incremental era, there is a large incremental cake for everyone to share, and each can be relatively safe and sound; in the inventory era, with the advancement of the CPI (Consumer Price Index), people’s appetites will inevitably become larger and larger, and porridge At that point, everyone rushing for food will inevitably take place.

This is the four characteristics of the auto market after the peak: the strong grab the weak, new cars grab old cars, new energy vehicles grab traditional cars, and Chinese brands grab joint ventures.

The first one, the strong grab the weak. From a competitor’s point of view, this is easy to understand. After all, car companies are still companies. The essence of companies is profit-seeking. If the incremental profit is not enough, it will eat the profit of the stock. The strong will use the resources and scale in their hands. , Technology and other advantages to swallow the existing market of the weak. It is foreseeable that more Suzuki will accelerate its withdrawal from the domestic market in the next few years, and hand over their share to the strong.

Second, new cars grab old ones. In terms of product form, with the intensification of competition, the attractiveness of new models is usually stronger than that of old models. Therefore, automakers will continue to accelerate the development and launch of new products. In addition to the three major parts and the necessary three-high calibration, the overall Car styling and configuration upgrades will surely speed up greatly, which in turn requires parts companies to speed up development, and old models that cannot keep up with the pace will inevitably hand over market share. In addition, old cars (not old models) that have been put into use will also face the acceleration of new cars.

Third, new energy grabs traditional cars. In terms of technical routes, with the strong advancement of national strategies, new energy vehicles will inevitably become the main force in future development. The continuous increase in the proportion required by the dual-point policy will strongly support the achievement of the “40%-50%” goal in the “Energy-saving and New Energy Vehicle Technology Roadmap”. Therefore, the share of traditional cars has been gradually eroded and has become a fixed number.

Fourth, Chinese brands are competing for joint ventures. In terms of capital attributes, Chinese brands have completed the foundational tasks after being nurtured by joint venture brands in terms of technology, capital, system, and experience. Next, brands of different tiers will inevitably be gradually captured. The first is the legal system at the bottom of the ranking. After that, the Korean, American, Japanese, and German systems are not far away. Leading this move will be China National Automobile Industry Corporation (a combination of the three major auto companies), SAIC, and Geely.

Five, the key to survival lies in the three major let-offs

Since the market competition after the peak is so cruel, how should auto companies respond? In the view of smart electric cars, the key to survival lies in the following four points:

One is the ability to react quickly. The reason why rapid response is ranked first is that under the intensified competition, the actions of various endpoints will be encrypted. If they cannot respond quickly to the ever-changing market dynamics, weak opportunities will be taken away.

The second is accurate decision-making ability. Action alone is not enough. The goal, direction, and route of the action must be clear and accurate. The judgment and processing ability of the decision-makers and think tanks of the car companies to be tested. The more important the action plan, the more accurate and correct, otherwise it will inevitably be delayed. Fighter.

The third is excellent cost control ability. In the final analysis, the direct form of competition among auto companies in the market is products (including the cars themselves and derivative products). Under peak pressure, coupled with the gradual price transmission effect of the gradual liberalization of tariffs and the full liberalization of share ratios Competition, the pursuit of profit must start from the perspective of cost control, in addition to increasing the volume, supply chain integration is also critical.

6. Consumer end: buying a car is not a matter, changing a car becomes the norm

For most consumers, buying a car at home 20 years ago is a big deal, after all, owning a Motorola mobile phone is a rare thing. However, as competition intensifies, the auto sales price system will continue to drop, and the launch of new auto products will continue to accelerate. It is not impossible to buy BBA within 150,000 yuan.

Therefore, although buying a car cannot be as exaggerated as buying food, it will gradually become a matter of buying a high-end household appliance, which is more commonplace. Therefore, consumers will enjoy the process of buying and changing cars more, and this will also be the market opportunity.

7. Conclusion: There are still business opportunities in Silver for twenty years

Although the golden fifteen years have passed, there are still two decades of silver in China's auto industry. Although Li is thinner and life is tighter, there is still food to eat. But in any case, rice is only reserved for enterprising people. Therefore, the car people, if you want to eat, refuel, the days of lying down and making money have really passed.