AutoBeta(AutoBeta.net)05/12 Report--

The latest data released by the China Automobile Association has once again attracted the attention of the entire automobile industry. Data show that the market share of Chinese brand passenger cars in April was only 34.6%, down 2.6 percentage points year-on-year, a six-year low; from January to April, the market share was 38.1%, down 2.5 percentage points year-on-year, falling below the red line of 40% again.

Sales continue to decline, market share repeatedly lost, for Chinese brands is a serious signal, means that some brands or will withdraw. The personage inside course of study thinks, stock competition current, automobile industry accelerates shuffle, half of Chinese automobile brand will close down, especially marginal, backward brand.

Since 2018, China's auto market has entered a state of decline for two consecutive years, with the elimination race accelerating and some auto companies being eliminated. Entering 2020, affected by the epidemic and the cold winter of the automobile market, the overall sales decline is also a high probability event. The normal survival of the fittest in the market, structural adjustment of the automobile market and the road to high-quality development are the rules of the industry, but the sudden attack of the epidemic accelerated the reshuffle of the automobile industry.

Many automobile enterprises have difficulties in operation

China has more than 100 independent automobile enterprises. In the process of moving from the incremental era to the road of high-quality development, some automobile enterprises have been marginalized by the market and entered the moment of survival. At the same time, it has accelerated the merger and reorganization of China's automobile industry. Entering 2020, automobile enterprises with layoffs and salary reductions and difficult operation will continue to emerge.

On April 27,2020, Cheetah Automobile, which continues to be in trouble, ushered in a new development plan. Geely Holding Group signed a strategic cooperation agreement with Hunan Province People's Government and Changsha City People's Government in Changsha to formally entrust Changsha Factory of Hunan Cheetah Automobile Co., Ltd., a subsidiary of Changfeng Group Co., Ltd., a provincial state-owned enterprise in Hunan Province. After Geely officially hosts Changfeng Liebao Automobile Factory, it will engage in the production and sales of new energy vehicles, introduce new energy vehicle products and technologies, and promote resource integration.

Influenced by factors such as deep adjustment of domestic automobile industry, slowdown of new product launch rhythm and decline of brand product competitiveness, Cheetah Automobile Company encountered difficulties in production and operation, and sales volume continued to decline. The sharp reduction in market size makes it difficult for Cheetah to bear its huge industrial resources. Therefore, since last year, Cheetah has started employee salary adjustment and salary reduction measures, and plans to get rid of some assets. Geely entered custody and briefly solved the development difficulties of Cheetah Automobile.

Data show that the sales volume of cheetah automobile in 2019 is only 33200, with a year-on-year decline of 61.6%; due to the operation problems of the company, some products of cheetah have been discontinued, and the sales data from January to March this year is only 141, with a year-on-year decline of 99.3%.

Zotye Group, another large auto company, is also facing difficulties. Zhongtai Group owns a number of sub-brands, among which Junma Automobile collapsed only two years after its establishment. Last year, Junma Automobile Changsha and Xiangyang factories stopped production, Junma dealers have carried out many rights protection, and many after-sales problems of vehicle owners cannot be guaranteed.

At the same time, due to great difficulties in operation, the launch of the national six models was blocked, and Zhongtai itself also had high risks. Zhongtai Automobile lost 9.294 billion yuan in 2019 and 417 million yuan in the first quarter of this year. In addition, Jin Zheyong, chairman of Zhongtai Automobile Co., Ltd., was restricted from high consumption due to a dispute over the sale contract.

In recent years, China's automobile market has changed greatly, and the market concentration has been continuously improved. Under the shrinking competition, some joint-venture brands have been defeated, and the survival environment of independent brands has also become bad. Statistics show that there are more than 50 independent passenger car enterprises with sales volume of less than 5000 units in the first quarter of this year, including Jiangling Automobile, Mahayana Automobile, Weichai Automobile, Zhongtai Automobile, Hanteng Automobile, Southeast Automobile, Baowo Automobile, Changhe Automobile, Weima Automobile, Mustang Automobile, Hezhong Automobile, Beiqi Yinxiang, Haima Sedan, Guihang Lotus, Guanzhi Automobile, Lifan Automobile, Liebao Automobile, Biesu Automobile, etc. Enterprises without sales statistics include Huatai Automobile, Tianjin FAW, Zhidou Electric, FAW Hippocampus, Leading Automobile, etc.

Therefore, the operation problems of many independent automobile enterprises have aggravated the further decline of the market share of Chinese brand passenger cars.

Half the car companies closed down?

For the current domestic automobile market competition environment, many industry insiders have made early warning. Tan Benhong, executive vice president of Changan Automobile, once said,"China's automobile industry has entered a comprehensive elimination period, the stronger the strong, the greater the pressure on the weak." The survival of the fittest is more obvious, and 50% of Chinese car brands will soon cease to exist." Chang 'an Automobile President Zhu Huarong believes that there will be more enterprises shut down and transferred in the next three years, and eventually Chinese automobile enterprises will have "only five or six left".

Therefore, from the overall pattern of the industry, the head automobile enterprises are getting stronger and stronger, the concentration of the market is constantly improving, and the weak brands are facing elimination, which is also conducive to the merger and reorganization of China's automobile industry.

Dongfeng Renault announced its dissolution and delisting in April this year. Cui Dongshu, secretary-general of China Automobile Association, made it clear that "this reflects that China's automobile market has entered the elimination period of survival of the fittest, warning other joint venture brands to invest more in product localization and technological innovation, and at the same time, we should strive to make our own brands bigger and stronger to promote the stronger development of the automobile industry."

The market share has declined, the competitive environment has intensified, and independent brands have entered the new energy vehicle mode of "curve overtaking", but the data shows that the sales volume of new energy vehicles in China from January to April has declined by 43.4% year-on-year, and the sales volume has declined for 10 consecutive months, which is higher than the overall automobile market. The stagnation of new energy market scale also further attacks independent brands.

Survival of the fittest, industrial integration, merger and reorganization of these keywords will be the focus of China's automobile industry in the next few years, stock competition or even shrinking competition, accelerate the automobile industry reshuffle.

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