AutoBeta(AutoBeta.net)02/08 Report--

A few days ago, the China Automobile Circulation Association and Jingzhen estimate released a set of data on the domestic automobile industry. In January this year, domestic car sources were affected by both Spring Festival factors and pneumonia epidemic factors, and the number of vehicles dropped sharply, by more than 60%.

According to the data, the number of cars online fell sharply from 800000 in December 2019 to 286000 in January 2020, down 64.4% from the previous month and 47.1% from a year earlier.

According to the association, the number of cars can be approximately regarded as the inventory of car dealers. Therefore, it will be more difficult to judge the "transaction" of vehicles in stock in the future, not only the sales situation will be difficult to complete, but also the vehicle delivery situation will become difficult to achieve due to the reduction of vehicle supply.

The epidemic cases appeared one after another in January until Wuhan was "closed" on January 23, so that 31 provinces, autonomous regions and municipalities across the country launched a "Ⅰ response to major public health emergencies, and immediately suspended the production and business plans of all enterprises, resulting in about 1/4 of the monthly working day shutdown and a rapid decline in production.

However, in order to prevent and control the spread of the epidemic, the State Council and various provinces, autonomous regions and municipalities once again extended their holiday, production and business plans, and resumed work on February 10. The "lockout" of at least 20 days has further exacerbated the problem, with the industry predicting that domestic car production is expected to fall by about 30 per cent year-on-year in the first two months of 2020 based on production in the same period in 2019.

Hubei Province, the center of the epidemic, is in an important position in China's automobile industry. In 2019, Hubei produced more than 2.24 million cars, accounting for nearly 10 per cent of China's total car production. Therefore, if the opening of automobile factories in areas with more serious epidemics such as Hubei will continue to be delayed, it will further affect car production throughout the year.

It is difficult to produce, and it is also difficult to sell cars. According to the "inventory early warning Index Survey of China Automobile Dealers" released by the China Automobile Circulation Association, the inventory early warning index of automobile dealers reached 62.7% in January 2020, second only to the highest February index in 2019.

However, Lang Xuehong, deputy secretary general of the China Automobile Circulation Association, said that since 2/3 of the questionnaires were collected before the outbreak, the index does not fully reflect the impact of the epidemic on the automobile circulation industry.

The association said that under the continuing impact of the epidemic, the major car dealers are in a state of suspension of business, the vehicle upstream and downstream industry chain has been put to the test. Sales are expected to fall more than 50 per cent in February from a year earlier, more than a month-on-month decline. If the start time of most provinces is no longer delayed on February 10th, car sales are expected to fall by about 20% from January to February compared with the same period a year earlier.

To this end, a number of car companies have announced the introduction of no performance targets, relaxed assessment and other support means for dealers, including FAW-Volkswagen Audi, Jaguar Land Rover, Dongfeng Nissan, Great Wall, Guangzhou Automobile, BYD and other car companies. In addition, in view of the problems that some car owners cannot go out at will and the vehicle warranty service expires at that time, car companies have also launched free door-to-door pick-up and delivery of cars, extended insurance and other assistance measures.

In order to ease the financial pressure on dealers' capital chain, the China Automobile Circulation Association also formally submitted to the Bank of China Insurance Regulatory Commission, the Ministry of Commerce and other relevant government departments an emergency report on providing financial service support to dealers in the automobile circulation industry during the prevention and control of the epidemic, urging the government authorities to give phased policy support to the industry.

Generally speaking, affected by the Spring Festival and the epidemic, the number of online cars has dropped significantly, and most of them are car dealers' inventory. Even after the enterprise resumes work, it is still unable to achieve the goal as scheduled by logistics, production, delivery and other links, which leads to the adverse impact on the whole supply chain. However, it can be predicted that after the end of the epidemic, car consumption will usher in a small peak.

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