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

Retail sales of passenger cars in November 2020 were 2.081 million, up 8.0 per cent from a year earlier, according to the Federation of passengers. The domestic car market has achieved a high growth of 8% for many months in a row, but the life of dealers is not so good.

According to the latest survey report released by the China Automobile Circulation Association, the comprehensive inventory coefficient of car dealers in November 2020 was 1.72, up 15.4% from the same period last year and 9.6% from the previous month. The inventory level is above the warning line. The association said that despite the November Guangzhou and other local auto shows, double 11 car purchase and other marketing activities, but compared with the manufacturer's task indicators, terminal demand support is obviously insufficient.

Although luxury brands have shown a strong growth trend since the second half of the year, some brands are still worried about high inventories as the market changes. In November, the three brands with the highest inventory among dealers were named by the association, namely Volvo, Dongfeng Yueda Kia and Dongfeng Infiniti. Volvo, as a second-tier luxury brand, was on the list for the first time this year. Dongfeng Infiniti, a third-tier luxury brand, has been "named" by the association for many months.

Volvo sold 17997 cars in China in November, up 24.5 per cent from a year earlier. From January to November, Volvo sold 148033 vehicles in China, up 7.2 per cent from a year earlier. Although Volvo's monthly sales and cumulative sales for the whole year are higher than those of the same period last year, the report card is still ugly. Overall, Cadillac and Lexus annual sales have exceeded 200000 FAW Red Flag monthly sales of more than 20, 000 vehicles, while Volvo's performance in the domestic market is obviously weak.

It is worth mentioning that Volvo sales growth is based on the "price for volume" basis, four domestic models have greater discounts in the end market. According to the relevant website data, the Volvo XC60 price of 290900 yuan has fallen to 296000 yuan, with a discount of about 100000 yuan. The 2021 Volvo S90 knows that the price is 406900 yuan, but the lowest terminal transaction price is only 300000 yuan, while the other two XC40 and S60 terminals offer discounts between 50, 000 yuan and 70, 000 yuan.

In this context, Volvo is still named "high inventory depth", which means that although Volvo has a big discount in the end market, it still faces the situation of not being able to sell. In fact, the situation of Volvo is also predictable, Volvo's promotion methods have seriously affected the brand and product value, consumers will face greater losses after buying cars, and gradually distance themselves from luxury brand labels. Although price for volume is the most commonly used sales promotion method for brands to achieve sales targets, the balance point is that Volvo has obviously exceeded this balance point without harming the brand and preserving value.

Dongfeng Yueda Kia dealer inventory level ranks second, as one of the joint venture brands, Dongfeng Yueda Kia, the sense of existence in the domestic market is not very strong. At present, Dongfeng Yueda Kia has a lot of products on sale in China, including Zhirun, Kaiku, Huanchi, proud running and other models, but the real volume of products is only Zhirun, Huanchi, proud running, Kaiku and other models with monthly sales of about 3000 vehicles.

The K5 Kaiku, which was officially launched in September, is aimed at the intermediate car market and is a key model for Dongfeng Yueda Kia brand. At present, Kaiku's monthly sales are showing a month-on-month growth, but there is still a lot of uncertainty about whether it can be rumored about Kia's latest best-selling model in the later stage. As a model priced at 160000 yuan, there is almost no discount on the market so far, while the prices of German and Japanese models of the same class, such as Accord and Camry, have continued to decline, and Marebo, known as one of the "three treasures of losers", has cut prices even more ferociously. In this fierce competitive environment, its market performance can be imagined.

The last brand named is Dongfeng Infiniti, with a dealer inventory coefficient of 2.45 in November, which has "advanced" into the top three for many months in a row. Dongfeng Infiniti, as a third-tier luxury brand, still continues the conservative development in 2020, the progress of new car promotion is slow, and the inventory of terminal dealers is much higher than the industry average, this luxury brand has gradually become a marginal brand.

At present, Dongfeng Infiniti domestic models only Q50L, QX50 two, affected by the engine and gearbox quality common problems, Infiniti sales remain depressed. According to the latest data from Dongfeng company, Dongfeng Infiniti sold only 3232 new cars in November, down 17.12% from a year earlier to 21786 vehicles from January to November, down 28.22% from a year earlier.

With the accelerated development of the domestic luxury brand market, the sales of brands such as Lexus and Red Flag continue to grow, and even Lincoln, which is in trouble, has gradually improved through China, while the market prospect of Infiniti in China is still bleak. Dongfeng Renault, which learned from the same company, withdrew from the Chinese market in April due to careless development. if Infiniti does not pay attention to and solve the urgent problems of Chinese consumers, it may only be a matter of time before it withdraws from the country.

Facts have proved that the dealer inventory coefficient is often high, which to a certain extent reflects the development of car companies in the market. Although the sales of some luxury brands are OK, they rely on the basis of "price for volume". There are also many hidden worries in the development of the market.

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