Domestic auto market enters the stage of shopping, price reduction promotion into the mainstream

The traditional "Golden September, Silver 10" sales season, can let the car companies caught in the growth difficulties catch their breath, chasing the sales target set at the beginning of the year? From the current situation, the situation is not optimistic. China Automobile Industry Association recently released data showing that automobile production and sales continued to decline in August.

In the context of the domestic auto market has turned from high-speed growth to micro-growth, the bleak data has forced people to lower their expectations for the growth rate of production and sales this year. At the same time, car companies have gone through inventory through "official drop" to slow down operational pressure. In the view of some industry experts, micro-growth has become the norm, and industrial restructuring in the automotive sector will be more frequent.

Production and sales fell for four months
According to the statistics of the China Automobile Association, China's automobile production and sales in August were 1,569,700 and 1,664,500 respectively, up 3.4% and 10.7% respectively from the previous month; compared with the same period of last year, the production and sales decreased by 8.4% and 3% respectively. From January to August, the production and sales of automobiles were 151.824 million and 1.517 million respectively, and the production and sales were slightly lower than the same period of the previous year. Since May this year, production and sales have started to be lower than the same period of the previous year. The situation has lasted for four months, and the monthly cumulative production and sales in the first eight months has been lower than the same period of the previous year.

At the beginning of this year, the China Automobile Association had predicted that China's auto sales growth rate would be 7% in 2015. However, after the first half of the year, the China Automobile Association was not so optimistic, and the growth rate was lowered to 3%. The data that continued to slump in July and August made many industry insiders pessimistic that this year's domestic auto market may have a rare "negative growth."

In the "2015 China Automotive Outlook Report" released recently, global business consulting firm Arrow has said that China's auto industry will experience low single-digit growth from this year, and annual sales may decline for the first time after the global recession in 2008. . Arrow will expect China's auto sales to maintain an annual growth rate of 4.1% to 2018, and then slow down to an annual growth rate of 2.9% in 2023, compared to a compound annual growth rate of 19.3% over the past decade. dramatically drop.

Lin Lianyun, general manager of Arrow Platinum, said that unless the market rebounded strongly in the second half of this year, 2015 may be the most pessimistic year for automakers and dealers since the global recession in 2008. Inventories are increasing, sales are falling, and automakers are rethinking production strategies, all of which indicate that the industry environment is more difficult.

Qi Guochun, deputy director of the Equipment Industry Department of the Ministry of Industry and Information Technology, said at the 2015 China Automotive Industry Development TEDA International Forum, which opened on the 12th, as the Chinese economy entered the “new normal” of development, the automobile industry also entered a period of transformation and adjustment. The auto industry will face more intense competition in the future, and the industry's profitability will be seriously affected. Since the beginning of this year, the profit situation of the entire automobile industry has been worse than before, and this situation may be further aggravated for a long time.

Increased pressure on self-owned brands
Bai Qingyuan, deputy general manager of Dongfeng Yulong, said that the auto market this year was “snowing in the summer” and never saw a time point that continued to decline like this. The downturn in the auto market has intensified competition, and the pressure on self-owned brands is particularly strong.

In September, Beijing Hyundai's new SUV model was launched on the new Tucson. At the same time as various performance and configuration were greatly improved, its entry price of less than 160,000 yuan was much lower than previous market expectations. This price strategy has also drastically lowered the price of domestic medium-sized SUVs with a strong "gunpowder flavor."

At the same time, independent brand products are not far behind. Dongfeng Yulong launched the Nazhijie 6 SUV Fantastic limited edition model, the price is less than 150,000; Beijing Auto Group launched its own brand Suibao's first A0-class SUV Beiqi Sic Bo X25 model, with less than 56,000 yuan The price has stirred up the same-level self-owned brand SUV market.

Although major auto manufacturers are trying to avoid entering the quagmire of price wars, from the actual market situation, various price cuts and promotions have become mainstream. Zhu Huarong, president of Changan Automobile, even believes that the competition in the domestic auto market is already "bloody".

Due to the limitations of brand, technology and capital, the impact of independent brands in the market is the first to bear the brunt. Although self-owned brands have made great progress on these shortcomings in recent years, the old problems that have been plagued for many years have not been solved.

At present, overcapacity is still a problem in front of car companies. At the beginning of this year, the Shanghai GM Wuhan plant was completed and put into production, bringing 240,000 new vehicles per year. At the same time, Shanghai Volkswagen, Ford and a number of independent brands have also started new plants this year.

According to research by Arrow, most of the OEMs in Japan, Europe and the United States have a capacity utilization rate of more than 90% in China, but the capacity utilization rate of local Chinese OEMs is almost less than 60%, and 85% of capacity utilization. The rate is considered to be the lowest operating level for profit.

Zhu Huarong said that structural overcapacity continues, and there are many inefficient production capacity. These ineffective production capacity basically cannot guarantee product quality. Overcapacity directly led to an increase in price wars. At the Chengdu Auto Show just past, each booth has basically become a temporary 4S shop. There are signs of “direct drop” everywhere. Almost every viewer will be asked by the promoters whether to buy a car. The most important auto show in the Southwest has directly become a hypermarket. This price war has caused the market to enter a vicious circle, and dealers' profitability has declined. Only about 30% of dealers are profitable.

High research and development costs and insufficient capital investment are also an old problem. A single new model of a self-owned brand can only sell 29,000 vehicles a year, which makes it difficult to share the cost of research and development, and the vehicle replacement is slower. The joint venture brand or international brand, a new model developed in general, sales of 300,000 to 500,000 vehicles a year, and some can even reach 1 million. This allows the R&D costs to be quickly shared and the upgrades of the models to be more rapid.

To a certain extent, this has caused insufficient sustained investment in independent brand research and development. Zhu Huarong said, "The international research and development cost of a large enterprise car enterprise is 80 billion yuan, and the number of Chinese brand enterprises is 8 billion. We can do one project a year and people can do 10".

Then there is the low concentration of industry and the difficulty in forming economies of scale. Yin Tongyue, chairman of Chery Automobile, said that the automobile industry is a large-scale industry. There are not many automobile manufacturers in a country in China. "Many highly competitive companies in foreign countries can share resources, and domestic enterprises. It’s very difficult to do the same thing. Different companies have to go from scratch to the other, causing not to go deep and not far, and to form a lot of waste. This state leads us to many ways that are not right, from an economic point of view. Cost-effective, it is also problematic from a quality perspective."

Self-owned brands need not be transformed
In the face of severe market conditions, how do domestic auto companies, especially their own brands, break?

At the ongoing Frankfurt Motor Show in Germany, the heads of Mercedes-Benz, BMW [microblogging] and Volkswagen, the heads of the three auto giants, said that the information technology represented by digitalization and intelligence will become the future of the automotive industry.

For domestic enterprises, the transformation and upgrading of information technology as a traditional manufacturing industry and the change of marketing model are both challenges and opportunities for traditional manufacturing.

Recently, Tencent Auto released a white paper for self-owned brand car users. The white paper passed the data on the intention of Tencent’s 500,000 self-owned brands, the hundreds of millions of user behavior data on Tencent’s platforms, and 10,000 targeted online surveys. The questionnaire data was analyzed, and a report on the characteristics of car ownership, life track and consumption habits of self-owned brand car users was obtained.

According to the white paper, more than half of the main drivers of car purchases come from commuting, self-driving and child-riding; more than 78% of users choose to use the Internet to get information on car purchases; after 80, dad, nurse Groups, interested in topics related to children, infants and young children. Through these data, companies can accurately arrange market positioning and marketing strategies to improve efficiency and reduce costs.

At the same time, information technology, new energy, etc. are also upgrading the traditional automobile industry in the production field. Some domestic automakers, including BAIC Group, have already achieved some results in new energy vehicles and smart cars, and this may be a new growth point for future auto companies.

The industry believes that new technologies such as new energy, "Internet +", and driverless driving will bring more opportunities to the automotive industry. The domestic auto market has changed from high-speed growth to micro-growth. The pressure on production and sales faced by automakers is growing, and it may usher in a round of reshuffle. For autonomous car companies, only by doing a good job of internal strength, doing a good job in R&D, and accelerating transformation and upgrading will it be possible to gain a foothold in this round of changes and accumulate strength for subsequent development.

Zhu Huarong said that self-owned brands have a lot of work to do, including Internet + traditional manufacturing, new energy, smart cars and so on. At the same time, we must also improve the R&D capabilities and continuous investment, unite and collaborate, focus on product enhancement, and really impress users.

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