AutoBeta(AutoBeta.net)03/27 Report--

Zhu Huarong, party secretary and chairman of Changan Automobile, said at the 2022 China Electric vehicle Forum on March 26th that with the acceleration of new energy vehicles, competition in China's fuel vehicle market will become fiercer. There are 85 brands in the traditional fuel vehicle market in 2021, of which 34 brands sell less than 1,000 units per month, and 9 brands die out. Zhu Huarong believes that in the next 3-5 years, 80% of Chinese fuel car brands will "close down and merge" (that is, close down, stop production, merge and transform).

This means that in the future 3-5, only a small number of car companies will be able to continue to develop in the Chinese market as fuel vehicles, and others will either close down, merge or transform, which is not unreasonable. At present, the domestic new energy vehicle market is growing in a barbaric explosion, while more and more enterprises, including Baidu, Xiaomi, Foxconn, Sony and so on, are building cars, which seems to show that "lie flat and be eliminated". Of course, the above is based on personal judgment, and no one can accurately predict the direction of the industry.

In the past year, although the domestic market has been affected by the epidemic, lack of core and insufficient supply of spare parts, the overall sales volume is still growing synchronously, which is inseparable from the contribution of new energy vehicles. According to data from the Federation of passengers, the retail volume of domestic narrow passenger cars in 2021 was 20.146 million, an increase of 4.4 percent over the same period last year, of which 2.989 million were new energy passenger vehicles, an increase of 169.1 percent over the same period last year.

What is the current market pattern of new energy vehicles? Take the sales of new energy vehicles in 2021 as an example, the top 15 car companies are BYD, SAIC GM Wuling, Tesla, Great Wall Motor, Guangzhou Automobile Eian, SAIC passenger car, Xiaopeng Automobile, Chery Automobile, Lulai Automobile, ideal Automobile, Geely Automobile, Changan Automobile, FAW-Volkswagen, Hezhong Automobile, SAIC Volkswagen, among them BYD, SAIC GM Wuling and Tesla China. The annual sales are 584020, 431130 and 320743 respectively, and the three car companies account for 45 per cent of the new energy vehicle market. Great Wall, Guangzhou Automobile, SAIC, Chery, Changan and other traditional car companies have all entered the TOP15, of which Great Wall ranks first, mainly because of the growth of Euler model sales. In addition, a number of new power car companies also squeezed into the TOP15 list, Xiaopeng, NIO, ideal are more than 90, 000. As for joint venture brands, only FAW-Volkswagen and SAIC-Volkswagen appeared on the list and performed better in joint venture brands. In other words, the current domestic new energy vehicle market is dominated by domestic brands, such as BYD, Great Wall Automobile, Guangzhou Automobile Ean, Shangqi passenger car, etc., are likely to continue to develop in the Chinese market as fuel vehicles, while Lai, Xiaopeng and ideal all represent new energy brands, whose products are all new energy vehicle products, which are obviously different from BYD and Great Wall Automobile.

80% of Chinese fuel car brands are "shut down and merged"? According to Zhu Huarong, the traditional fuel vehicle market in 2021 has 34 brands with monthly sales of less than 1,000 units, including Southeast Automobile, Haima Automobile, Tengli Automobile, Quan Zhi Automobile, Baowo Automobile, Zhongtai Automobile, Cheetah Automobile and so on. These brands have a lower and lower sense of presence in the market, do not have a strong support behind, and fail to keep up with the pace of market development, and eventually wander at the edge of the market because of the broken capital chain. Since 2019, the rights protection incidents of dealers including Huatai Automobile, Zhongtai Automobile, BAIC Yinxiang, Cheetah Automobile and Lifan Motor have been staged one after another. finally, the factories of a number of car companies were merged and acquired by the head enterprises. for example, Geely took over the cheetah automobile factory in Changsha, and Great Wall took over the Zhongtai Linyi factory, which is the result of market stock competition, but it is particularly prominent in the context of the rapid development of new energy vehicles.

Will the head brand also face a "shutdown and merger"? According to FAW data, the sales rankings in 2021 are FAW-Volkswagen, SAIC-Volkswagen, SAIC-GM, Geely, Dongfeng Nissan, Changan, SAIC-GM Wuling, Great Wall Motor, FAW Toyota, Guangzhou Automobile Toyota, Dongfeng Honda, Guangzhou Automobile Honda, BYD, brilliance BMW, Chery Automobile, although these brands have a strong sense of presence in the passenger car market, but with the acceleration of new energy vehicles. Make the competition in the fuel car market more fierce, and in order to according to the development of the market, the above brands begin to layout new energy vehicles. Take Volkswagen as an example, its joint ventures FAW-Volkswagen and SAIC-Volkswagen launched a number of new cars such as ID.4 X/ID.4 CROZZ, ID.6 X/ID.6 CROZZ and ID.3 in 2021, making it the joint venture brand with the largest number of new energy vehicle products during the year. In addition, Mercedes-Benz, Toyota and Honda have also issued new strategies one after another to invest more money in R & D, production and distribution of new energy vehicles, which is a reflection of the transformation from fuel vehicles to new energy vehicles.

In addition, more and more enterprises begin to build cars, which is also the embodiment of the transformation. Take Xiaomi as an example, it announced in March 2021 that it would build a car, its headquarters is located in Beijing Economic Development District, and the first car is scheduled for mass production in the first half of 2024. As for entering the bureau to build cars, Lei Jun said that being in the automobile business is not to be "in the limelight." at present, electric cars have changed from the machinery industry to the information industry. coupled with the fact that some peers are already doing it, Xiaomi will be eliminated if it is not done.

Of course, Changan Automobile also plays such a role in the current market. Mr Zhu said Changan plans to sell 1.05 million new energy vehicles, or 35 per cent, by 2025 and 2.7 million, or 60 per cent, by 2030.

On November 15, 2021, the high-end brand AVATR, jointly built by Changan Automobile, Huawei and Ningde era, was officially launched, with the debut of the first model Avita 11. The new car is positioned as a pure electric medium-sized SUV, using the design style of a sedan car, based on the Intelligent Electric vehicle Network platform (CHN) jointly developed by Changan, Huawei and Ningde era. In addition, Changan New Energy also released a new pure electric car with internal code name C385 on August 24, 2021. The new car is expected to go on sale in the second quarter, or adopt a new brand logo.

Changan Automobile can be regarded as the leading brand in the domestic market, thanks to the support of CS75, CS55 and other models, but its performance in the new energy vehicle market is still not satisfactory. As for the grand goal of Changan Automobile in the future, it still needs to launch more sincere product support.

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