AutoBeta(AutoBeta.net)12/11 Report--

On December 10, the China Automobile Association released China's automobile market production and sales data in November 2019. Data show that in November 2019, China's car production and sales volume were 2.593 million and 2.457 million respectively, an increase of 3.8% over the same period last year, and sales fell 3.6% from January to November last year. China's car production and sales totaled 23.038 million and 23.11 million respectively, down 9% and 9.1% respectively from a year earlier.

The China Automobile Association said that production and sales began to pick up in November, reflecting on the one hand that companies began to replenish inventory after continuously reducing inventory levels, and that the pace of production has recovered; on the other hand, it also reflects the recovery of market confidence in the future. However, the overall recovery of the market is slow and consumer confidence is still insufficient.

The development of new energy vehicles is still not optimistic. According to the China Automobile Association, production and sales of new energy vehicles in November were 110000 and 95000 respectively, down 36.9% and 43.7% respectively from a year earlier. Of these, the production and sales of pure electric vehicles completed 96000 and 81000 respectively, down 29.6% and 41.2% respectively from the same period last year; and 14000 plug-in hybrid vehicles were produced and sold, down 63% and 54.4% respectively from the same period last year.

The cumulative production and sales of new energy vehicles from January to November were 1.093 million and 1.043 million respectively, up 3.6 per cent and 1.3 per cent respectively over the same period last year. Of these, the production and sales of pure electric vehicles completed 891000 and 832000 respectively, up 10.3% and 5.2% respectively over the same period last year; the production and sales of plug-in hybrid vehicles completed 201000 and 210000 respectively, down 18.7% and 12.1% respectively over the same period last year; and fuel cell vehicles completed 1426 and 1337 respectively, up 398.6% and 375.8% respectively over the same period last year.

According to the data, the production and sales of new energy vehicles in November increased to varying degrees compared with the previous month, but still showed a downward trend compared with the same period last year. The China Automobile Association said that new energy vehicles continued to decline this month, falling for five consecutive months compared with the same period last year, with cumulative production and sales growing only slightly compared with the same period last year and may show negative growth for the whole year.

At the beginning of this year, the China Automobile Association predicted that the sales of new energy vehicles would reach 1.6 million in 2019. However, after the decline of new energy subsidies, the sales of new energy vehicles halved, and the China Automobile Association reduced its sales target to 1.5 million. In terms of current sales, only 69.5% of the annual sales target has been achieved, which is still a long way from the annual sales target.

Chen Shihua, deputy secretary-general of the China Automobile Association, said that there will be a peak in production and sales of new energy vehicles at the end of previous years. This year, subsidies have narrowed sharply, showing a year-on-year decline for five consecutive months, and will show negative growth for the whole year. Judging from the economic benefit data of new energy vehicle enterprises, they are in a state of loss at present. It can be seen that the new energy vehicle market is still driven by policy, and the change of policy has great pressure on the market.

Since the decline of subsidies for new energy vehicles, sales of new energy vehicles have declined for five consecutive months, mainly because the decline in subsidies has led to an increase in costs, and most enterprises have lost money on the sale of new energy vehicles. In addition, due to the decline of subsidies for new energy vehicles, the profits available to car companies in the market have been greatly reduced, and some car companies and products have withdrawn from the market, resulting in fluctuations in car sales.

According to statistics, only 20% of the new energy vehicles sold on the market are purchased by consumers, and the rest are put into the B-end market, most of the models are used for shared travel and taxi personal business, etc., it can be seen that consumer recognition of new energy vehicles is not high, coupled with the advent of winter, new energy vehicles in terms of battery life will be greatly reduced, new energy vehicle sales may be hit again. Car companies are more "forced" to develop new energy vehicles. Under the pressure of double points and the country's efforts to promote the development of new energy vehicles, major car companies have transformed to electrification one after another. If they are not invested in time, it will be surpassed or eliminated in the future.

However, although new energy vehicles are not favored at present, China is still the largest market for new energy vehicles. With the liberalization of policy, the pace of foreign car companies to deploy new energy vehicles in China will be further accelerated.

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