AutoBeta(AutoBeta.net)06/10 Report--

After the automobile sales industry associations in Shanghai and many other places successively spoke about the advance implementation of the sixth National Committee and the overstocking of vehicles in the fifth year, the Chongqing Automobile Business Association today issued an "open letter to automobile suppliers of various brands". The content is that it is only 20 days before the official implementation of the national sixth stage motor vehicle emission standards. at present, dealers stock as many as 80,000 models, but manufacturers continue to supply national five models. Put the dealers in a great predicament. In addition, in the first five months of this year, car sales continued to show a downward trend, the overall situation is not optimistic, consumers hold money for purchase, and so on, there are difficulties in the industry.

The message of the implementation of State 6 in advance on July 1, 2019 has been basically clear. in view of the above situation, the "Open letter" calls on all brands to immediately stop dispatching national five models to dealers in Chongqing, and taking into account the difficulties faced by dealers, take the initiative to undertake the deployment or recycling of the national five models in dealer inventory after the implementation of the sixth national policy, and tide over the difficulties together with the dealers.

In addition, the "Open letter" also calls on brand manufacturers to cancel the business rebate assessment for dealers, to reasonably adjust the dealers' annual business plans on the premise of fully respecting the wishes of dealers, and to provide special promotion funds to help dealers quickly digest non-National VI inventory cars.

In fact, the Shanghai Automobile sales Industry Association also made the above appeal. According to the "open letter" issued by the association on May 23, some suppliers continue to sell vehicles with "national five" emission standards to dealers in the city in the form of rebate. The association requires automobile suppliers of all brands to immediately stop issuing cars that do not meet the "national 6b" emission standards to Shanghai dealers, cancel the relevant business rebate assessment of dealers, and promise to buy back or deploy non-"national 6b" inventory cars for Shanghai dealers.

The association believes that this is one of the most effective ways that suppliers can do and can help dealers out of their current difficulties.

The China Association of Automobile Manufacturers launched an initiative to implement the national six emission standards ahead of schedule on June 8. The association said that the early implementation of the sixth national emission standards has intensified consumers' wait-and-see mood, which may lead to a sharp decline in the automobile market in 2019. The inventory of vehicles in the fifth five countries has been overstocked and the efficiency of enterprises has declined significantly. It is suggested that all parties concerned should conscientiously ensure that the early implementation of the national six emission standards will not affect the normal circulation and trading of second-hand vehicles of the national five emission standards, and that the early implementation of the national sixth emission standards will not affect the normal use of national five vehicles, as long as they meet the national in-use vehicle inspection and testing, they can drive normally on the road. At the same time, it calls on enterprises to stop from now on the implementation of regional supply of national five vehicles to national six in advance, and take the initiative to reduce the production and supply of national five vehicles, so as to make full preparations for the full implementation of national six standards on July 1, 2020.

It is reported that the decline in car sales has intensified, resulting in about 70% of dealers in Shanghai losing money. According to a survey conducted by the China Circulation Association, the gross profit of new cars among dealers dropped to 0.4% in 2018 from 5.5% in 2017, and the loss area of dealers increased to 39.3% from 11.4% in 2017. In 2019, except for a few brands, the gross profit of new cars of dealers is generally negative, and the loss area is further increased.

From January to April this year, car sales in China fell 12.12 per cent from a year earlier.

Under the current market environment, it is difficult for car dealers to fully sell their existing "National five" inventory cars in a short period of time, so they can only increase terminal price reductions. Some brands basically sell at 50% discount or 40% discount, resulting in weak profits or even loss-making operations, leading to the deterioration of the industry ecology. A chamber of commerce survey report pointed out that 66% of dealers reported that they could not digest the five cars in stock by July 1, of which 60% would have a backlog of about 100.

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