AutoBeta(AutoBeta.net)03/02 Report--

Affected by the epidemic situation, China's auto market ushered in the biggest decline in history. After the recovery of production and sales in the second half of February, I didn't expect another data to create history. On March 2, China Automobile Circulation Association released the inventory report of automobile dealers in China in February 2020. The data showed that the dealer inventory warning index reached a new high in February, reaching 81.2%.

The association reported that the dealer inventory warning index in February was 81.2%, up 29.5% month-on-month and 27.7% year-on-year, and the inventory warning index was above the warning line, which was 50%.

By contrast, the dealer inventory warning index was 62.7% in January this year, 63.6% in 2019 and 81.2% in February 2020, which has created a new inventory record in China's auto market.

Side reaction, even if the manufacturer actively enters the stage of resumption of production in the second half of the month and speeds up the wholesale of new cars to dealers, the terminal sales continue to fail to proceed normally. Due to the impact of the epidemic situation, the passenger flow to the store is still extremely low, and the travel of consumers is blocked or cautious. Under the comprehensive factors, the dealers continue to have inventory backlog.

The association believes that the epidemic situation has a serious impact on the automobile market. Due to the bleak demand, the dealer sales volume in February showed a cliff-like decline. The larger the inventory, the more funds were occupied, resulting in difficulties in capital recovery and continuous increase in capital pressure. In addition, not only new car sales have fallen sharply, but consumer visits to stores for maintenance have also fallen sharply.

As of March 2, the Association surveyed 123 dealer groups nationwide, totaling 8095 4S stores, and found that the sales efficiency was only 24.9% and the after-sales efficiency was only 31.1%, still far lower than the same period. (Sales efficiency refers to the degree that the current vehicle sales can reach the same period of previous years; after-sales efficiency refers to the current after-sales output value can reach the same period of previous years)

"It is expected that the overall market sales volume in February will fall by about-80% year-on-year. By the end of March, the comprehensive resumption rate will reach a relatively high level, and the production and living order will gradually recover. The overall market sales volume decline in March may rise to about-50%," Lang Xuehong, deputy secretary-general of China Automobile Circulation Association, analyzed that the overall recovery of the automobile market to normal level may take about May.

Car market demand crisis organic. According to the association, the epidemic will promote the purchase of cars by the first group. At present, the biggest problem in China's auto market is that the proportion of first purchases declines rapidly and the support for the auto market is insufficient; to a certain extent, the outbreak of the epidemic causes the temporary suspension of public transport operations, which will increase the demand for private cars and promote car-free users to buy vehicles.

"The automobile industry is different from catering and other service industries, and the epidemic situation is more caused by delayed demand." Zeng Qinghong, chairman of GAC Group, said that the impact of the epidemic situation is temporary. From the automobile industry, although unprecedented challenges are encountered, automobiles are rigid demand and have certain impact in the short term, but the overall situation is good. He also hoped that local governments would introduce more fiscal and taxation measures, cancel license restrictions and encourage automobile consumption.

On February 20, the Ministry of Commerce of the People's Republic of China clearly put forward that it is necessary to thoroughly implement the important decision-making deployment of the central government on "actively stabilizing traditional bulk consumption such as automobiles", study and promulgate policies and measures to further stabilize automobile consumption, mitigate the impact of the epidemic on automobile consumption, and encourage all localities to introduce measures to promote consumption of new energy vehicles according to local conditions, increase purchase restriction indicators for traditional automobiles and carry out trade-in of old automobiles to promote automobile consumption.

Cui Dongshu, secretary-general of the Association, issued a proposal saying that Beijing's license limit quota should be moderately increased, which is of great significance for stabilizing automobile consumption in 2020. Cui Dongshu also said that although the growth rate of new car sales fell in 2019, the total consumption of new passenger cars in China was 21 million, ranking first in the world. It's not that we don't want to buy cars, this is a phased property market squeeze car market consumption, but China's auto market still has a lot of room for growth.

Finally, the association believes that the epidemic should not be the survival of the fittest enterprises, to let enterprises survive. For the automobile industry chain, not only dealers, but also the whole automobile industry chain and manufacturing industry are facing huge impact. All parties should find ways to make enterprises survive. The epidemic situation should not be regarded as an opportunity for the survival of the fittest. Every enterprise should have more choices in the epidemic situation, so that the enterprise can hold on before the epidemic situation, and the real realization of the survival of the fittest is full market competition.

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