AutoBeta(AutoBeta.net)05/26 Report--

Major changes have taken place in China's auto consumer market, with not only the continued decline in new car sales, but also a tilt towards the luxury car market.

A few days ago, the China Automobile Association and other units jointly issued the "Automobile Industry Blue Book: China Automobile Industry Development report (2019)", which pointed out that 2018 was the turning point of China's automobile industry, and analyzed the current consumption trend of the market through data.

New car sales decline

According to figures released by the China Automobile Association, total car sales in China in 2018 were 28.0806 million, down 2.76 per cent from a year earlier. Shi Jianhua, deputy secretary-general of the China Automobile Association, believes that the main reason for the downturn in the auto market in 2018 is that the purchase tax halving policy withdrew from the overdraft market at the end of 2017. In addition, rising house prices in third-and fourth-tier cities, population mobility to big cities and other unfavorable factors have brought pressure on the car market.

According to the report, China's car sales declined for the first time in more than 20 years in 2018, which means that the rapid growth period of the automobile industry is gradually coming to an end, and the automobile industry will gradually move towards maturity. The auto market is expected to sell about 28.1 million vehicles in 2019, roughly the same as in 2018.

In fact, due to various factors in the market, coupled with the implementation of the national six emission standards, car sales this year are still not optimistic, and the operating pressure on mainframe factories and dealers is further increased. From January to April, car sales in China were 8.3533 million, down 12.12% from a year earlier.

Luxury car market is booming

The report also focuses on the changes in China's automobile consumption structure. Under the current downturn in the auto market, the trend of consumption upgrading is accelerating and the demand for luxury cars is exuberant. According to statistics, a total of 3.04 million luxury cars were sold in China in 2018, an increase of 11.6% over the same period last year, which is much faster than that of the auto market.

There are two reasons, on the one hand, due to China's economic growth, people's income has increased, and the proportion of post-90s users has increased year by year, the willingness to buy luxury cars has been increasing; on the other hand, the price of luxury brands has fallen sharply.

In 2018, luxury car prices fell the most in the passenger car segment, falling by 10.8% for the whole year. For comparison, the Chinese brand price decline index fell 9.4% for the whole year, the joint venture brand index fell 7.8%, and the imported brand index fell 7.9%.

Luxury brands through the trend of price competition intensified, in the first, second and third line of luxury brands, the prices of some models have fallen to the list of price ranges with ordinary joint venture brands.

New energy is the main battlefield.

China sold 1.25 million new energy vehicles in 2018, accounting for 62.5 per cent of the global sales of 2 million new energy vehicles. Dong Yang, vice president of the China Automobile Association, also said that there is no need to discuss the feasibility of new energy vehicles, and the cost of electric cars will be comparable to that of gasoline cars by 2025.

The Bloomberg Financial report predicts that China will become a major battleground for electric vehicle manufacturers over the next 20 years as US and European governments promote the development of electric vehicle technology.

China's overall annual auto sales account for 30.6% of the world's automobiles, and it is the world's largest auto consumer market. The decline in sales and changes in the market structure will lead to continuous changes in the areas of supply, production and sales, and traditional auto manufacturers are facing a reshuffle.

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