AutoBeta(AutoBeta.net)06/14 Report--

Entering 2020, the automobile industry ushered in another round of big shock, the car market continued to decline to stack the impact of the COVID-19 epidemic, the industry knockout accelerated, some brands are facing the pressure of a sharp decline in sales. The concentration of the market is increasing, weak brands are facing elimination, survival of the fittest is the current law of the development of the automobile industry.

According to the statistics of the Federation of passengers, a total of 38 car companies were on the list of car companies whose sales fell by more than 50% in the first five months of this year. Including GAC-Mitsubishi, Shenlong Automobile, Guangzhou Auto Fick and other eight joint venture car companies, the rest are independent enterprises.

According to official figures, overall car sales in China in May were 2.194 million, up 14.5% from a year earlier, with the first monthly double-digit year-on-year increase in more than a month, but from January to May, car sales in China still fell 22.6% from a year earlier to 7.957 million. The car companies whose sales "halved" fell far more than the industry average, becoming one of the worst car companies in 2020.

SAIC GM Wuling is a perennial car company in the top 10, but due to changes in the industry environment and the overall contraction of the MPV market, SAIC GM Wuling fell further. SAIC GM Wuling sold a total of 170290 passenger cars from January to May, down 54.7% from a year earlier. From January to May, the overall MPV market accumulated sales of 344000 vehicles, down 41.0% from the same period last year. Therefore, SAIC GM Wuling's decline is almost synchronized with the MPV market. Sales of Wuling Hongguang, the main model, fell by 33.7% from January to May to 104600.

GAC-Mitsubishi, Guangzhou Auto Fick, DPCA, Dongfeng Renault and so on are joint ventures that halved in May this year. Among them, GAC-Mitsubishi and GAC Fick fell by more than 50%, while French car companies DPCA, Dongfeng Renault and Changan Peugeot Citroen expanded.

On April 14, 2020, Dongfeng Renault, a six-year joint venture, officially announced its dissolution and delisting, becoming the first joint venture to collapse this year. According to the announcement, Renault transferred its 50% stake in Dongfeng Renault to Dongfeng Automobile Group, and Dongfeng Renault has stopped its business activities related to the Renault brand. Sales were at the heart of Dongfeng Renault's collapse, with cumulative sales of only 1382 vehicles from January to May, down 81.3 per cent from a year earlier.

Changan Peugeot Citroen sold only 88 vehicles in the first five months of this year, down 90.4% from a year earlier. Changan Peugeot Citroen, which has been in a joint venture for eight years, was basically disbanded at the end of last year, and Baoneng took over the transformation. However, the DS brand will not withdraw from the Chinese market, and after Baoneng takes over, part of the production capacity of Peugeot Citroen's subsequent DS brand models in China, including the DS 9 sedan. In the future, the road of DS in China is still very difficult.

Independent car companies account for most of the statistical list, and some car companies have been on the verge of stopping production.

Under the control of Shenzhou excellent car, Bowo Automobile has increased its brand exposure through comprehensive marketing promotion, but the product has not been updated for a long time, and the sluggish sales of the new model BX3 have put the Bowo brand in trouble again. Figures show that Bowo sold 720 cars in May, with a cumulative sales of 4477 from January to May, down 82.3 per cent from a year earlier. Qoros also ushered in the hope of revival under the acquisition of Baoneng, but its products have not been updated for many years, and its market competitiveness has declined sharply. It sold a total of 2047 vehicles in the first five months, down 52.5 per cent from the same period a year earlier.

BAIC Yinxiang, Speed Motor, Cheetah Motor, Dongfeng Yulong, Lifan Motor, Zhongtai Automobile, Huatai Automobile and other brands are all declining brands in recent years, with sales falling by about 90% in the previous month and facing great risk of delisting.

Among them, Zhongtai Motor is difficult to operate due to financial problems, and the sixth national model can not adapt, resulting in the production of Zhongtai almost to a standstill. Zhongtai Automobile Hunan base has decided to stop production until the end of June next year, employees have a collective holiday for a year, at the same time, Zhongtai also encourages employees to take the initiative to leave, and give some compensation.

Zhongtai's operating income in 2019 was 3.204 billion yuan, down 78.3% from the same period last year, with a net loss of 9.294 billion yuan. Zhongtai Motor lost 417 million yuan in the first quarter of 2020. The continued loss of operation has overwhelmed the Zhongtai automobile company.

In addition, the new energy industry continues to be in the doldrums, and BAIC New Energy, as a leading enterprise, is also facing sales difficulties. BAIC's new energy sales in May were 2106, down 76.6% from a year earlier. The cumulative sales from January to May were 11692, down 70.1% from a year earlier.

An industry analysis report points out that with the economic downturn and the gradual slowdown of market increment, China's automobile market is entering a new stage of stock competition. Due to the influence of COVID-19 's epidemic situation, China's macro-economy and automobile market will face severe tests in stages this year. From the perspective of the industry pattern, the concentration of the market is increasing, and weak brands are facing elimination.

"car companies without brands, core technology and capital will collapse one after another," industry insiders said. Now both independent, joint venture and foreign-funded car companies are facing the market test. The market share is concentrated to the head car companies, and there is not much time for weak brands, and the knockout stage of survival of the fittest in China's auto market has entered a white-hot stage.

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