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

In the second half of the year, the automobile market gradually returned to normal, the overall sales increased steadily, and a number of car companies ushered in collective growth. According to the CAC report, retail sales in the passenger car market reached 1.992 million in October, up 8 per cent from a year earlier and achieving a high growth rate of about 8 per cent for four consecutive months.

Even with the rapid growth of the car market, some brands are also struggling with high inventory and living a difficult life of terminal sales. In October, a total of three major brand dealers' inventory levels remained high, and the luxury brand has won the first place for three months in a row.

The latest survey of "inventory of car dealers" released by the China Automobile Circulation Association in October shows that the comprehensive inventory coefficient of car dealers in October was 1.57, up 12.9% from the same period last year and 0.6% from the previous month, but the inventory level is stable at the edge of the warning line. The association predicts that dealer inventory pressure will increase as manufacturers hit their annual targets.

It is worth noting that the report also highlighted the three brands with the highest inventory depth in October, namely Dongfeng Infiniti, Skoda and Roewe.

Dongfeng Infiniti distributor warehouse coefficient reached 2.51 in October, has been on the list for three months in a row, and occupies the top position. Entering 2020, Dongfeng Infiniti does not have much action, the promotion of new cars is also very slow, and the inventory of terminal dealers is much higher than the industry average, which can further peep into the operation of the brand.

In October, Dongfeng Infiniti sales were 2808, down 11.3 per cent from a year earlier. Cumulative sales from January to October were 18554, down 30 per cent from a year earlier. Different from the sustained high growth rate of the overall luxury car market, Dongfeng Infiniti obviously stalled, showing a weak state in the differentiation between the two.

After Dongfeng Renault JV stopped production and delisted in the first half of the year, Dongfeng Infiniti, whose business was stagnant, was also questioned by the outside world. In the first half of this year, it was reported that Dongfeng Infiniti will carry out substantial layoffs, relevant business departments and offices will also be relocated or closed, and will also be "merged" with Dongfeng Nissan to reduce costs. Although Infiniti responded with "false reports" and "will not withdraw from the Chinese market", the development dilemma has also been haunting this Japanese luxury joint venture car company.

At present, Dongfeng Infiniti has only two domestic models, Q50L and QX50. In recent years, weak brand promotion and poor market performance seem to have brought the introduction of new cars under the Infiniti brand to a standstill. The phenomenon of luxury brand differentiation is becoming more and more intense. for brands that miss development opportunities, they will face more severe market tests in the future.

Skoda brand dealers continue to rank second in inventory levels, and Skoda has made frequent appearances on inventory lists this year, and it seems that brand positioning and product price cuts in the first half of the year failed to get the carmaker out of trouble.

SAIC-Volkswagen launched the multi-brand strategy in 2005, formally introduced Skoda brand, and launched the first strategic model, Ming Rui, in 2007. At present, SAIC Volkswagen Skoda brand has Xinrui RAPID family, Mingrui family, Speed School, Kodiak, Kolok, Komick and other products.

SAIC Skoda brand has been hovering in sales of 330000 vehicles from 2016 to 2018, but as the market ebb and competition intensifies, brand differentiation gradually highlights, Skoda falls into the plight of marginalization. Even though SAIC Skoda has strengthened its SUV product layout in recent years, it has not actually brought significant growth to Skoda's sales in China. Skoda sold 282000 vehicles in China in 2019, down 17.3 per cent from a year earlier, according to data. Skoda continued its downward trend in the first half of 2020, with sales of only 77400 vehicles, down 38.5% from a year earlier.

In October this year, Skoda changed its name in the Chinese market from "SAIC Skoda" to "SAIC Volkswagen Skoda". There are different interpretations of this change. However, under the market differentiation, Skoda seems to be more and more forgotten by consumers.

Roewe became the third brand in dealer inventory in October, with a dealer inventory coefficient of 2.34, which also reflects the imbalance between wholesale sales and terminal retail sales. According to KuaiBao, SAIC's production and marketing, SAIC passenger car (Roewe and Mingjue brands) accumulated sales of 474000 vehicles in the first 10 months, down 11% from a year earlier.

Roewe lacks sustained best-selling models, and although RX5 has been in the top 10 of the SUV for many months, it also slipped rapidly in October. This year, Roewe launched RX5 PLUS, iMAX8 and other models, in order to enhance the brand image, but also released a new "Lion Standard". At the same time, Roewe launched the exclusive brand R of new energy, which will contribute to the field of new energy.

Manufacturers enter the sprint stage of sales target at the end of the year, the task of sales assessment is aggravated, and the inventory pressure of dealers may further increase. Dealers rely on substantial preferential activities to accelerate inventory digestion and boost the terminal market in the way of price for volume. although the inventory pressure of some brands has slowed down in a short period of time, it has overdrawn the market demand ahead of time, which is not good for brand development. Dongfeng Infiniti and Skoda brands with high inventory levels will face more severe sales pressure in the future.

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