1. Review of the national passenger car market in December
retail: in December 2021, the retail sales of passenger car market reached 2.105 million, a year-on-year decrease of 7.9%, a decrease of 1.9% compared with December 2019. The overall retail strength in December was obvious.
Retail sales in December increased by 15.9% month on month (MOM) compared with November. Compared with the average level of 10% MoM growth in December in recent years, the mom trend of retail sales in December this year was significantly improved.
In December, the production and sales of the auto market increased relatively well. Although there was a slight loss in the production of some regions, the chip supply continued to improve, which promoted the production and sales to rise in December.
In December, the main adverse factors were the epidemic situation. The first was the spread and recurrence of the epidemic situation. On the one hand, it had a great impact on the number of stores, which hindered the repair of the service industry; Secondly, the public finance has increased the expenditure for supporting support such as epidemic prevention and control, and the support for improving consumption power is insufficient; Then there is the pressure of economic indicators falling, weak employment expectations and confidence, weak growth in end consumer demand, and slowing demand for medium and low-end first purchase models. In addition, due to the high sales base at the end of the consumption promotion policy in December 2020, the growth pressure of the auto market is too large.
With the early start of the tide of returning home before the Spring Festival, the car retail market has improved significantly after mid December. Due to the improvement of the inventory level of models on sale at the dealer level and the continuous optimization of the structure, the supply rhythm of manufacturers gradually meets the expectations. With the arrival of the peak sales season, in December, retailers significantly increased terminal concessions, rapidly improved their sales enthusiasm, and realized the strength of terminal retail.
From January to December 2021, the total retail sales reached 2014.6 million, with a year-on-year increase of 4.4%, 1.7 percentage points lower than the growth rate from January to November. The reason for the diluted growth rate is mainly affected by the high retail base from July to December 2020. Among the 860000 retail sales in 2021, the number of traditional fuel vehicles decreased by 1.02 million, a year-on-year decrease of 6%, while the number of new energy vehicles increased by 1.88 million, a year-on-year increase of 169%, and new energy vehicles contributed 9 percentage points to the year-on-year growth of passenger vehicles.
In December, 250000 luxury cars were retailed, a year-on-year decrease of 3%, a month on month increase of 18%, an increase of 22% compared with December 2019. The sales of luxury cars at the end of the year are particularly stable, laying a solid foundation for a good start in 2022.
In December, the retail sales of independent brands was 930000, with a year-on-year increase of 4%, a month on month increase of 12%, and an increase of 25% compared with December 2019. In December, the retail share of independent brands in China was 46.3%, with a year-on-year increase of 6.9 percentage points; The annual share was 41%, an increase of 5.6 percentage points. The wholesale market share increased by 46.9% over the same period; The annual share of independent wholesale was 44%, an increase of 7.3 percentage points over the same period. The leading enterprises of independent brands performed very well and gained significant increment in the new energy market. Therefore, the brands of traditional automobile enterprises such as Byd Company Limited(002594) and SAIC passenger cars increased significantly year-on-year.
In December, the retail sales of mainstream joint venture brands were 930000, a year-on-year decrease of 19%, a month on month increase of 19%, and a decrease of 5% compared with December 2019. The retail share of Japanese brands in December was 22.2%, a year-on-year decrease of 1 percentage point. The US retail market share reached 9%, down 0.6 percentage points year-on-year. The share of the legal system has increased by 0.3 percentage points, and the supply of German brands is gradually improving.
export: in December, the passenger car Federation exported 170000 passenger vehicles (including complete vehicles and CKD), a year-on-year increase of 63%, and new energy vehicles accounted for 15% of the total export. In December, the export of independent brands reached 150000, a year-on-year increase of 77%, and the export of joint ventures and luxury brands reached 20000, a year-on-year increase of 26%.
production: in December, 2.466 million passenger cars were produced, with a year-on-year increase of 7.2% and a month on month increase of 10.6%. Among them, the production of luxury brands increased by 20% year-on-year and 18% month on month; The production of joint venture brands decreased by 1% year-on-year and increased by 11% month on month; The production of independent brands increased by 13% year-on-year and 8% month on month. From January to December, a total of 20.951 million vehicles were produced, with a year-on-year increase of 7.7%. Recently, the impact of chip shortage has been significantly improved, which helps luxury brands and joint venture brands quickly improve the production rhythm and scale, but the weekly production still has a state of rising amplitude and large fluctuation.
wholesale: in December, the manufacturer’s wholesale sales volume was 2.366 million, a year-on-year increase of 2.3%, a month on month increase of 10.0%, an increase of 9.2% over December 2019. From January to December, the total wholesale sales volume was 21.098 million, a year-on-year increase of 6.7%, a decrease of nearly 10000 compared with the same period in 2019.
inventory: the first three quarters of this year experienced a special cycle from de inventory to approaching safety inventory, and the manufacturer’s inventory was replenished rapidly in the fourth quarter. At the end of December, the manufacturer’s inventory increased by 100000 units month on month, and the channel inventory increased by 90000 units month on month; December over the years is an important node for inventory construction. The inventory was well established in December this year, laying the foundation for the sprint of sales at the end of the year.
From January to December 2021, the manufacturer’s inventory decreased by 130000 units, which is larger than that from January to December over the years, forming the feature of strong de inventory for four consecutive years. From January to December 2021, the channel inventory decreased by 560000 units, which is still under great shortage pressure compared with 200000 units in the same period in 2020.
new energy: in December, the wholesale sales of new energy passenger vehicles reached 505000, a year-on-year increase of 138.9% and a month on month increase of 17.8%. From January to December, the wholesale of new energy passenger vehicles was 3.312 million, a year-on-year increase of 181.0%. In December, the retail sales of new energy passenger vehicles reached 475000, a year-on-year increase of 128.8% and a month on month increase of 25.4%. From January to December, the retail sales of new energy vehicles were 2.989 million, a year-on-year increase of 169.1%. The trend of new energy vehicles is strongly different from that of traditional fuel vehicles, realizing the partial substitution effect of new energy vehicles on the fuel vehicle market, proving the change of consumer demand through the market-oriented choice of users, and driving the vehicle market to accelerate the transformation to new energy.
1) wholesale: the wholesale penetration rate of new energy vehicle manufacturers in December was 21.3%, and the penetration rate from January to December was 15.7%, significantly higher than the penetration rate of 5.8% in 2020. In December, the penetration rate of self owned brand new energy vehicles was 35.2%; The penetration rate of new energy vehicles in luxury vehicles is 27.2%; The penetration rate of mainstream joint venture brand new energy vehicles is only 3.7%. In December, the wholesale sales volume of pure electric vehicles was 423000, a year-on-year increase of 137.9%; The sales volume of plug-in hybrid vehicles was 82000, a year-on-year increase of 143.9%, accounting for 16%. In December, the sales volume of high-end electric vehicles increased strongly, the middle and low-end trend was strong, and the dumbbell structure of the pure electric market was improved. Among them, the wholesale sales volume of A00 is 139000, accounting for 33% of that of pure electric vehicles; A0 grade wholesale sales volume is 60000, accounting for 14% of pure electric; Class a electric vehicles accounted for 25% of pure electric vehicles, rising from the bottom; Class B electric vehicles reached 114000, an increase of 25% month on month, accounting for 27% of the share of pure electric vehicles.
2) retail: the retail penetration rate of new energy vehicles in China was 22.6% in December and 14.8% from January to December, significantly higher than the penetration rate of 5.8% in 2020. In December, the penetration rate of new energy vehicles among independent brands was 39%; The penetration rate of new energy vehicles in luxury vehicles is 32.7%; The penetration rate of new energy vehicles in mainstream joint venture brands is only 3.3%.
3) export: in December, the export of new energy vehicles maintained a strong growth. SAIC passenger cars exported 5716 new energy vehicles, Geely 637 vehicles, Byd Company Limited(002594) 563 vehicles, Tesla China exported 245 vehicles, Great Wall Motor Company Limited(601633) 203 vehicles, and other vehicle enterprises mainly exported new energy vehicles to the Chinese market.
4) automobile enterprises: in December, the new energy passenger vehicle market was diversified, with relatively strong performance of Saic Motor Corporation Limited(600104) and Guangzhou Automobile Group Co.Ltd(601238) and prominent highlights of traditional automobile enterprises. Byd Company Limited(002594) pure electric and plug-in hybrid two wheel drive have strong performance. There are 14 enterprises with wholesale sales exceeding 10000 vehicles, which has increased significantly compared with the previous period, including: Byd Company Limited(002594) 93338 vehicles, Tesla China 70847 vehicles, SAIC GM Wuling 60372 vehicles, Great Wall Motor Company Limited(601633) 20926 vehicles, Chery 20501 vehicles, Geely 16831 vehicles, Xiaopeng 16000 vehicles, SAIC 14868 passenger vehicles, GAC EA 14500 vehicles, ideal vehicle 14087 vehicles, FAW Volkswagen 11213 vehicles 10489 Weilai cars, Chongqing Changan Automobile Company Limited(000625) 10404 and 10127 Hezhong cars.
5) new forces: in December, the sales of new forces such as Xiaopeng, ideal, Weilai, Nezha, Zero run and Weima were generally good year-on-year and month on month. In particular, the sales of Xiaopeng, ideal, Weilai and Nezha exceeded 10000 vehicles, and the second tier enterprises such as Zero run and Weima also quickly increased their sales to more than 5000 vehicles per month. Among the mainstream joint venture brands, the wholesale of 19498 new energy vehicles of North South Volkswagen accounts for 46% of the mainstream joint venture brands, and Volkswagen’s firm electrification transformation strategy has achieved initial results. It is also excellent that SAIC GM and brilliance BMW both have exceeded 5000 new energy sales, and other joint ventures and luxury brands still need to make efforts.
The number of ordinary passenger cars increased by 32.82% year-on-year, and the number of hybrid cars increased by 25.8% year-on-year in June. Among them, there are 51220 Toyota, 20441 Honda, 6282 Dongfeng Nissan and Great Wall Motor Company Limited(601633) 5220. Hybrid has gradually become a new hot spot.
2. National passenger car market outlook in January 2022
There are 21 working days in January 2022, which is 2 days less than December 2021 and 1 working day more than January 2021. However, because the Spring Festival is on February 1, the off-season for car purchase is entered a few days ahead of the festival, January 2022 is a small month for car market consumption, which is not conducive to the increase of production and sales.
With the stagnation of production and sales in Europe and the United States during the Christmas holiday, China’s passenger car industry has more abundant chip supply to promote the improvement of production support capacity. The mainstream models that lack some chips in the early stage but have not yet been put on the market are accelerated, and the supply of motor car market is further improved.
From November to December last year, although the inventory built and stored by auto enterprises did not meet expectations, the channel inventory improved, which promoted the further recovery of retail before the Spring Festival.
The economic situation in 2022 is increasingly complex and severe, but before the Spring Festival, it is a concentrated outbreak node for first-time buyers, and the performance of the car market is bound to be strong. Under the influence of the epidemic situation, the pre Festival return home early, driving the hot selling period of the pre Festival car market forward.
Recently, the local new year and other information caused by the epidemic situation in some areas are complex, which may greatly affect the consumption of returning home to buy cars before the festival. The control of the epidemic situation is the focus of market car purchase before and after the Spring Festival. Due to the downturn in real estate and other industries, the purchasing power of some consumer groups is insufficient, which is not conducive to the release of car purchase potential before the festival.
Some traditional auto enterprises have lowered their expectations for 2021 due to the impact of chips, and there are better reserves of undelivered order resources. The efforts to ensure a good start in the auto market in 2022 are still strong.
An important factor restraining the growth of the car market in recent years is the downturn of entry-level consumption, but the middle-aged migrant workers returning to the province for employment has an obvious trend, driving the recovery of the northern car market, and the car purchase consumption will be strong before the Spring Festival.
With the implementation of new energy subsidies, the price of some models will be fine tuned, and the consumer mentality will also change, and the demand for new energy vehicles will still be slightly affected. However, new energy vehicles continue to be popular. At present, there are a large number of undelivered orders in the early stage, so the sales of most new energy vehicles will not be significantly affected by the decline.
3. The new energy subsidy policy in 2022 is a great positive
According to the newly released policy, the framework and threshold requirements of the current technical index system of purchase subsidies will remain unchanged in 2022, and the subsidy scale is not locked from the original expected upper limit of 2 million vehicles, which will realize the subsidy throughout 2022. With the doubling of the scale of the new energy industry chain and the improvement of cost reduction ability, it is expected that the increment of new energy vehicles will be strong by the end of 2022.
As the subsidy standard remains unchanged and the battery and vehicle integration technology is improving, it is mainly the policy that promotes the significant growth of the scale of the new energy vehicle industry, which reflects the policy’s strong support for the low-carbon industry and promotes the transformation of the traditional fuel vehicle industry. In the field of commercial vehicles, in the fourth quarter of 2021, major manufacturers continued to invest in the announcement and declaration of replacing electric vehicles and the improvement of the industrial chain. The wind direction of industrial change deserves attention.
It was originally expected that the sales volume of new energy passenger vehicles would be 4.8 million in 2022. At present, it should be adjusted to more than 5.5 million, and the penetration rate of new energy passenger vehicles would reach about 25%. New energy vehicles are expected to exceed 6 million, and the penetration rate of new energy vehicles is about 22%.
In the fourth quarter of 2021, the sales volume of Shanxi Guoxin Energy Corporation Limited(600617) passenger cars was 1.3 million. With the significant improvement of Chinese consumers’ recognition of the new energy market and the stability of policy subsidies, it is bound to promote the sharp increase in the total sales of Shanxi Guoxin Energy Corporation Limited(600617) passenger cars in 2022 and continue to maintain a super leading position with a share of more than 50% in the world.
4. New energy vehicles cannot be bought or used
With the national promotion of emission reduction, environmental protection and “double carbon” strategy, the sales of new energy vehicles will continue to show a significant growth trend. According to the data of the passenger Federation, the wholesale of new energy passenger vehicles in 2021 was 3.312 million, a year-on-year increase of 181.0%; Retail sales reached 2.989 million, a year-on-year increase of 169.1%. In 2021, the wholesale of traditional fuel vehicles was 17.79 million, a year-on-year decrease of 4%, and the retail of 17.16 million, a year-on-year decrease of 6%. The trend of strong differentiation between new energy vehicles and traditional fuel vehicles is obvious. New energy vehicles will realize the substitution effect on the fuel vehicle market and accelerate the transformation of the vehicle market to new energy.
In recent years, the growth of motor vehicle premium in the insurance industry has slowed down. From the insurance industry data, the motor vehicle premium in 2020 was 824.4 billion yuan, a year-on-year increase of 0.6%; Claims were 475.5 billion yuan, a year-on-year increase of 0.2%, both of which showed a low growth trend lower than the growth rate of ownership. This may be due to the improvement of coverage such as traffic compulsory insurance and supplementary accident insurance for drivers and passengers, the willingness to insure old models or the simplification of insurance projects after the insurance premium reform. In 2020, the premium claim rate of motor vehicle insurance will reach 57%, up only 5 points from 52% in 2017. Compared with the better growth of other insurance varieties, the motor vehicle insurance industry still has growth pressure. The change of the structure of motor vehicle insurance and the increase of additional insurance are effective measures to improve benefits and open the market. It provides a transformation channel for customizing insurance types by understanding the changes of users’ driving habits in the medium and long term.
The recent introduction of new energy vehicle insurance is a good thing, but the insurance cost of new energy vehicles has increased too high. The possible result is that the fuel money saved by new energy vehicles has to pay insurance premiums, which makes the use of new energy vehicles seem not cost-effective and forms a phenomenon that they can’t afford to buy and use, It increases the concerns of price sensitive users about car purchase and the decision-making difficulty of selecting insurance types (considering the dispersion of additional insurance types), which is not conducive to the promotion of new energy vehicles.
With the increasing improvement of the big data accumulation of new energy vehicles and the strong ability of personalized insurance business, it is necessary for car enterprises to establish their own insurance varieties in the future. With the new technology upgrading trend of new energy vehicles, on the basis of calculating the odds ratio through historical data, the insurance industry may have more accurate insurance calculation and insurance scheme recommendation under the background of the continuous improvement of road traffic environment and efficient law enforcement by ministries and commissions such as the Ministry of transport. It is also expected that national policies will support reasonable subsidies for insurance costs, so that more consumers can buy new energy vehicles to save money and worry.
5. The cancellation of restrictions on the proportion of foreign shares in passenger car manufacturing is conducive to market-oriented competition
On December 27, 2021, the national development and Reform Commission announced the Special Administrative Measures for foreign investment access (negative list) (2021 version), which abolished the restrictions on the proportion of foreign shares in passenger car manufacturing and the restrictions on the same foreign investor to establish two or less joint ventures producing similar vehicle products in China.
In the past two decades, China has always had strict restrictions on the share ratio of joint venture vehicle enterprises. This liberalization is conducive to the deepening of market-oriented competition. It also reflects China’s attitude of adhering to the opening-up and the only way to gradually practice the transformation from a big consumer country to a manufacturing country.
The joint venture is expected to be relatively cautious in equity adjustment. At present, the growth of the passenger car market has encountered a bottleneck. Since the sales volume of passenger cars reached 23.72 million in 2017, the overall scale of traditional fuel vehicles has been difficult to expand. The entry-level consumption power is insufficient, and the low-end market of traditional fuel vehicles and class a vehicles has been growing sluggishly. The advantages of joint venture vehicle enterprises are the decades of technical experience of traditional fuel vehicles and the insight of corresponding consumer groups. After the market scale is blocked, the downside risk of enterprise benefits is huge. It is difficult to establish a new brand and communicate with foreign car companies.
The rise of independent new energy changes the market landscape. Due to the rapid development of medium Shanxi Guoxin Energy Corporation Limited(600617) passenger cars and the strong performance of independent brand new energy, the rapid feedback mechanism for new energy consumers has helped the active transformation and adjustment of the industrial chain, forming a leading advantage in vehicle manufacturing. China has become the core competitive market for the development of new energy vehicles in the world. Therefore, the liberalization of shares has little impact on the market pattern in the short term. In the long term, independent brands will obtain a more advantageous market position with the help of the strong growth of new energy vehicles, and will also help to improve the localization level of key technologies in the new energy industry chain.
extended reading
In 2022, the subsidy for new energy vehicles will be further reduced, and Xiaopeng and Tesla will take the lead in raising the price
(source: Passenger Association)
