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Under the influence of the Spring Festival holiday, the sales volume of China's automobile market decreased month-on-month in February 2022, but increased compared with the same period last year. According to the latest retail sales statistics of the Federation of passengers, sales in the domestic narrow passenger car market reached 1.25 million in February, up 4.5% from a year earlier and down 39.9% from the previous month.

The auto industry looked at the sales of 30 automakers in February, 14 of which showed a year-on-year decline. SAIC-Volkswagen, Great Wall Motor, Changan Motor, Beijing Mercedes-Benz, SAIC passenger cars, Beijing Hyundai and Dongfeng Yueda Kia all fell by more than double digits. With regard to the month-on-month decline and year-on-year growth, the China Automobile Association said that, first, new energy and automobile exports play a positive role; second, inventory replenishment demand drives growth. However, in the face of a more complex external environment, the China Automobile Association expressed cautious optimism about the future development of the automobile industry.

From the manufacturer's sales list, in addition to the smaller base of Xiaopeng, ideal, Ultimate, Nezha and other faster growth, BYD's growth rate is the most prominent. Data show that BYD sold 89102 cars in February, up 340.4 per cent from a year earlier. With a report card of 89100 vehicles, BYD not only ranked first in sales of its own brand, but also overtook SAIC-Volkswagen to become the runner-up of the month, second only to FAW-Volkswagen. In the future, with the continuous increase of more products equipped with DM-i system and the launch of marine products one after another, it should not be a problem to sell more than 100000 vehicles a month. Of course, this also requires the cooperation of BYD's production capacity, although BYD is relatively perfect in the supply chain, but the current epidemic spread risk is large, which may affect the production process of car companies at any time.

BYD can become the second runner-up, in addition to the DM-i and blade batteries in the market, the decline in sales of other car companies in the same period is also an important factor for BYD to win the third place. Judging from the list, both SAIC and BAIC fell, with SAIC Volkswagen down 19.0%, SAIC General Motors 7.9%, SAIC GM Wuling down 9.2%, Beijing Mercedes-Benz down 12.2%, SAIC passenger cars down 16.3%, especially Beijing Hyundai. Year-on-year decline of 45.6% became the largest decline in the list.

It is worth mentioning that the two head autonomous car companies have also dropped a lot, namely Changan Automobile and Great Wall Motor. Data show that in February 2022, Changan Automobile fell 37.6% from a year earlier to 60682, while Great Wall fell 18.3% to 55666.

According to wholesale data released by Great Wall Motor, new car sales in February 2022 were 70792, down 20.5% from a year earlier, of which overseas sales were 6037, down 38.3% from a year earlier. In view of the decline in sales, Great Wall explained that Bosch is the exclusive supplier of ESP for the main model of Great Wall, mainly due to the Spring Festival holiday and the insufficient supply of body electronic stabilization system (ESP) produced by Bosch Auto parts (Suzhou) Co., Ltd. At present, Great Wall Motor is actively promoting Bosch Group headquarters and chip suppliers to work out a production increase plan, and strive to quickly solve the problem of parts supply.

From the perspective of subdivided brands, the Harvard brand, as a pillar of sales, fell by 31.2%, indirectly leading to a decline in sales of Great Wall. Among them, the "National Miracle car" Harvard HH sold only 18790 vehicles in June, and the highly expected Haver Dog and Haver Divine Beast sold well, 7228 and 5009 respectively, while models such as Harvard's first love and Harvard Red Rabbit are destined not to be tilted by limited resources. Other brands, the Euler brand fell 15.1% year-on-year to 6261 vehicles, because black cats and white cats have stopped taking orders, so it has a big impact on sales, and the high loss caused by lack of core and electricity still hinders the cat's progress. Both the WEY brand and the tank brand grew, with WEY up 103.1% and tanks up 96.0%. However, the sales of these two brands can hardly drive the overall sales of Great Wall in the short term.

As for Changan Automobile, which fell 37.6% from a year earlier, its main selling products, including CS75, CS55, Changan Yiyou, fell off a cliff, with CS75 falling from 32122 in January to 12297 in February, Yitou from 21324 in January to 9784, and CS55 from 29851 in January to 5013 in January. As for the reasons for the decline in sales, an online internal document titled "report on the serious shortage of sales resources caused by insufficient supply from Bosch and other core-related suppliers" shows that "the core-related parts continue to be in short supply, and Changan Automobile has been in serious shortage since February, including Bosch airbag controllers, EPBI and other materials, resulting in a sustained sharp decline in production and a serious shortage of market terminal resources. At present, the company's guarantee team is actively communicating solutions with Bosch and other suppliers.

With the exception of Great Wall and Changan, Geely's sales fell 1.8 per cent year-on-year to 68627, with cumulative sales falling 7.0 per cent to 201117 in the first two months. According to people familiar with the matter, Geely's serious month-on-month decline in vehicle sales is mainly due to the shortage of car chips, because Geely uses Bosch ESP for more than 90%, which has the highest proportion among independent brands and the greatest impact. Geely can narrow the decline in sales if supply improves. Of course, Geely seems to have racked its brains to ease the delivery pressure caused by tight supply chains in the face of a sales target of 1.65 million vehicles in 2022. According to media reports, in order to alleviate the shortage of automotive chips, Geely will implement a supply chain replacement program in the second quarter of this year to ease the current limited capacity pressure.

In addition, GAC MOTOR also issued a "notice on the chip shortage affecting the production of some models" on his official APP. The announcement said that due to the increasing intelligence of GAC MOTOR's products and the increasing number of chips used in the whole car system, the global chip shortage has had a certain impact on the production and delivery of M8 and Shadow Leopard models. GAC MOTOR said that the decline in sales of Shadow Leopard is mainly affected by the shortage of chips in ZF DP-EPS steering system. In order to speed up the supply of chips, GAC MOTOR is actively working with the headquarters of the Mobil Group and chip suppliers to develop a production increase plan. Data show that in February 2022, GAC MOTOR's sales rose 93.6% to 31461 vehicles compared with the same period last year, of which Chuanqi GS4 sold 10002 vehicles, which was the only model with more than 10,000 vehicles. Chuanqi M8 was 5001, while Shadow Leopard, which just went on sale, sold only 2002.

As we all know, the automotive industry has been affected by the shortage of chips since the beginning of 2021, which has been going on for more than a year and has become the norm in the industry. At present, the epidemic continues to affect the production of upstream companies, and Russia's crackdown on Ukraine has intensified, so that two Ukrainian suppliers, which account for about half of the global semiconductor neon production, have stopped operation. further lead to chip shortages while causing chip prices to soar.

According to data provided by Techcet, a market research company, and Ingas and Cryoin, two major Ukrainian neon suppliers, 45 to 54 per cent of the world's semiconductor-grade neon comes from Ingas and Cryoin. Techcet estimates that the global consumption of neon gas for chip production was about 540t last year. Representatives of Ingas and Cryoin said both companies had shut down their operations as Russia stepped up attacks on cities across Ukraine and destroyed critical infrastructure, casting a shadow over global chip production.

"if the inventory runs out by April and chipmakers do not lock orders in other parts of the world, it is likely to mean that the broader supply chain will be further restricted from producing final products for many key customers," said Angelo Zino, an analyst at CFRA, a research consultancy.

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