AutoBeta(AutoBeta.net)11/08 Report--

Since the second half of 2018, China's automobile production and sales have entered a decline channel, which has declined for 15 consecutive months compared with the same period last year, and the depression of the automobile industry will continue. The rapid popularity of cars in China is almost over, Ministry of Commerce officials said in a speech yesterday.

Hu Jianping, deputy director of the Market Construction Department of the Ministry of Commerce, said at the second Import Expo's "China Automobile Industry Development Forum" on November 7 that the rapid popularization of cars in China has basically come to an end due to the superposition of multiple factors, such as the increasing downward pressure on the macro-economy, the slowdown in the growth of residents' income, the strengthening of resources and environmental constraints brought about by the continuous growth of car ownership, and the change in the concept of automobile consumption. The new car market has entered a new normal of slow growth.

Hu Jianping analysis believes that from a global point of view, the growth rate of automobile market sales has been slowing down year by year since 2015. From China's own point of view, after more than 20 years of continuous growth, the auto market has shown anaemic growth, with new car sales falling 2.8 per cent to 28.081 million in 2018 and 18.371 million from January to September 2019, down 10.3 per cent from a year earlier. Hu Jianping also stressed that while the growth rate is slowing down, China's automobile market already has the basis and conditions to speed up the realization of high-quality development, and the upgrading trend of automobile consumer demand is obvious, gradually shifting from low-end homogenized products to middle-and high-end personalized products, from product consumption to equal emphasis on product and service consumption. In addition, the ownership of 250 million vehicles provides a solid foundation for promoting consumption in the use of cars.

Another aspect of the end of the era of car popularity is the current situation that the number of cars per thousand people in China is still low. Statistics show that the total annual consumption of new cars in China is about 28 million, ranking first in the world. The number of cars per 100 households in cities and towns rose to 40 from 21.5 in 2013. According to the comparable caliber, the number of thousands of cars in China is 170 in 2018. Developed countries, such as the United States, can reach about 800 vehicles, such as Europe, Japan and other developed countries in 500 to 600 vehicles. Compared with developed countries, the number of cars per thousand people in China is still low.

In addition, Chen Shihua, assistant secretary general of the China Association of Automobile Manufacturers, said that China's automobile industry should not be belittled. At present, the number of cars in China is about 250 million, which is at a relatively low level. China has a population of 1.4 billion. The demand for cars is very strong, and the potential is very great.

Chen Shihua also believes that China's automobile industry is now in a critical period of transformation and upgrading, before the rapid development, the development situation is relatively extensive, and China's automobile industry will enter a high-quality development stage in the future. How to adapt to this situation, or how the government to formulate policies to ensure the development of China's automobile industry, this is a very key issue in the future.

With the end of the era of rapid popularity of cars in China, the automobile industry has entered a high-quality development, which means that low-quality cheap cars will be eliminated by the market, and many independent car brands are facing survival crisis and transformation problems. A number of auto executives had predicted that half of China's car brands would fail in the future. Tan Benhong, executive vice president of Changan Automobile, said, "China's automobile industry has entered a comprehensive phase of elimination. The stronger the strong, the greater the pressure on the weak." The survival of the fittest is even more obvious. 50% of Chinese car brands, I think, will cease to exist for some time soon. " In addition, an Conghui, president of Geely Automobile Group, said: "after 50 per cent of the car companies in China's auto industry go bankrupt, the remaining 50 per cent of the competition may be the fiercest."

Fu Yuwu, honorary chairman of the Society of Automotive Engineering, also believes that market elimination is fair, which is also conducive to the merger and reorganization of China's automobile industry, and the most important thing at this stage is to change. In this context, car companies without brands, core technology and capital will collapse one after another. At the same time, he also stressed that the auto industry has not yet hit rock bottom, and the situation next year is not optimistic, and he hopes that auto companies can make preparations as early as possible.

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