AutoBeta(AutoBeta.net)12/02 Report--

The car market continues to decline, which is a great test for dealers. The China Automobile Circulation Association released a report on the inventory early warning Index of Automobile Dealers in November. The inventory early warning index of automobile dealers in November was 62.5%, up 0.1% from the previous month and down 12.6% from the same period last year. The inventory early warning index is above the warning line.

It is worth noting that the 62.5% inventory early warning index is the second highest this year after the 63.6% inventory early warning index in February, reflecting the continued high level of inventory at car dealers.

The association said that near the end of the year, with the arrival of the traditional peak season, Singles' Day activities led to passenger flow and increased sales. Large autumn auto shows were held in some parts of the north. After the autumn harvest, rural consumers' income increased, the number of shops increased, and the demand for cars increased. In addition, the Guangzhou Auto Show boosts the market demand in the southern region. However, for the impulse at the end of the year, some manufacturers have increased requirements for dealers to pick up cars, further increasing the pressure on dealers' inventory; in order to achieve the year-end target and get year-end rebates, dealers have reduced prices and promoted sales, the prices of new cars have been falling, and profitability has declined.

On the whole, the pressure on the automobile market is still great, and the overall demand has not improved significantly.

Car sales figures for November have not yet been released. According to the statistics of the China Automobile Association, China's automobile production and sales have declined for 16 consecutive months compared with the same period last year, with sales of 20.652 million vehicles from January to October 2019, down 9.7% from the same period last year.

Lang Xuehong, deputy secretary-general of the China Automobile Circulation Association, predicts that car sales are expected to be about 25 million in 2019, compared with 28.081 million in 2018, a decline of more than 3 million, so the decline will reach about 11%, returning to a double-digit decline.

Lang Xuehong also predicts that the auto market will continue to bottom out in 2020, with overall sales of about 22.5 million vehicles, down 10% from the same period in 2019, and lower market demand.

Therefore, according to the forecast, 2019 is not the trough of the automobile industry, and the situation next year is not optimistic. Major car companies, dealers and upstream and downstream supply chains should be prepared early, and the depression of the automobile industry will continue.

However, Lang Xuehong believes that the auto industry is expected to start to pick up by the end of 2020.

China's automobile industry has moved from the incremental market to the stock market or shrinking market, and the competition has entered a white-hot stage. under this background, those who are unable to cope with difficulties or adapt to the market environment will be eliminated or merged and reorganized. Zhu Huarong, president of Changan Automobile, said that there will be more car companies shutting down and merging in the next three years, and eventually there will be "only five or six" in China.

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