China’s auto industry will hand over a bright report card in 2021 – according to the data released by the Ministry of industry and information technology on the 12th, China’s auto production and sales will reach 26.082 million and 26.275 million respectively in 2021, with a year-on-year increase of 3.4% and 3.8% respectively, ending the downward trend for three consecutive years.
The sales volume of high-profile new energy vehicles reached 3.521 million in 2021, a year-on-year increase of 1.6 times, ranking first in the world for seven consecutive years. The new passenger car market equipped with combined driving assistance system accounts for 20%. In December 2021, the production and sales of new energy vehicles reached 518000 and 531000 respectively, with a year-on-year increase of 1.2 times and 1.1 times, reaching a new high.
China’s auto brands have made great strides. In 2021, the cumulative sales of Chinese brand passenger cars were 9.543 million, a year-on-year increase of 23.1%, and the market share reached 44.4%, an increase of 6 percentage points year-on-year; The export of complete vehicles was 2.015 million, a year-on-year increase of 1 times, a record high.
China’s car overtaking at corners ushers in the era of “national tide”
“We are witnessing the overtaking of China’s automobile industry in the curve, from backward to global leader, especially new energy vehicles.” Gong min, head of China Automotive Industry Research at UBS, told Xinhua Finance and economics that the rise of the product power and competitiveness of China’s electric vehicles is obvious to all.
Gong Min said that the sales of Shanxi Guoxin Energy Corporation Limited(600617) cars increased from more than 1 million in 2020 to more than 3.5 million in 2021, which was far more than expected.
A gratifying phenomenon is that China Shanxi Guoxin Energy Corporation Limited(600617) automobile has roughly got rid of “subsidy dependence”. According to the latest subsidy policy in 2022, the subsidy for each vehicle is about 12600 yuan, equivalent to 2000 US dollars. Compared with the subsidy of 6000 or 7000 euros in Europe and the US hopes to increase the tax preference of 7500 US dollars to 12500 US dollars, the Chinese market has greatly reduced its dependence on subsidies and stepped from policy driven to market driven.
“Some traditional foreign electric vehicle platforms entered the Chinese market in 2021, which did not have a great impact on independent brands. On the contrary, the product strength and competitiveness of Chinese brand electric vehicles have been further strengthened.” Gong Min said.
Another gratifying phenomenon is that the market share of Chinese brand cars has exceeded 44%, close to the best level in history, and consumers’ recognition of Chinese brands has increased significantly.
In several large auto exhibitions in 2021, independent brands have surpassed foreign luxury car brands and become the most dazzling existence. Many people in the industry lamented that in the past, consumers at auto shows came to see luxury cars, and now the status of traditional foreign luxury car brands still exists. At the same time, the new independent intelligent electric brand incubated by Chinese brands has impressed many middle and high-income consumers with its highly configured intelligent hardware, intimate intelligent functions and excellent “appearance”, The price of 350000 yuan – 500000 yuan still let them take out real gold and silver.
Zhang Yongwei, vice president and Secretary General of China electric vehicle hundred people’s Association, told Xinhua Finance and economics that in the past few years, government policymakers have better handled the relationship between traditional cars and new forces, mobilized the enthusiasm of both old and new forces, and introduced Tesla openly – its greatest significance to China is to change the development pattern of the automobile industry, Let us believe that enterprises that have not built cars before can build a good electric vehicle, and its external effect is huge.
Xiaopeng, ideal, Weilai and Nezha, among the new forces, broke the threshold of monthly delivery of 10000 vehicles in 2021. A survey shows that consumers are “surprisingly” satisfied with the new power brand and think it is commendable in terms of service, product iteration, problem response and so on.
In addition, the “going global” of auto enterprises in 2021 has yielded a lot. The annual export exceeded 2 million vehicles for the first time, realizing a breakthrough of 1 million vehicles over the years. The local prices of some models are comparable to those of luxury brands.
Saic Motor Corporation Limited(600104) in 2021, the overseas market sold 697000 vehicles, with a year-on-year increase of 78.9%, becoming a new growth point of the enterprise; Chongqing Changan Automobile Company Limited(000625) the sales volume in overseas markets exceeded 110000, achieving a significant year-on-year increase of 114.3%.
In Europe, the main battlefield for Chinese electric vehicle enterprises to go to sea, Weilai realized its export to the Norwegian market in 2021 and moved the user service system to Norway; Byd Company Limited(002594) officially delivered the first batch of Byd Company Limited(002594) Tang electric vehicles to Norwegian users
how can I get to the car market next year? New energy continued to rise like a rainbow
The new energy vehicle market has changed from insufficient demand to short supply; From policy driven to policy market driven, and then to market driven; From the cultivation period and growth period to now, it has entered a period of rapid growth.
Although the subsidy for new energy vehicles has declined in 2022, it is difficult to stop its rapid growth momentum.
The China Automobile Industry Association has predicted that the total sales volume of Chinese vehicles in 2022 is expected to be 27.5 million, a year-on-year increase of 5.4%, of which the sales volume of new energy vehicles is 5 million, a year-on-year increase of 47%.
Cui Dongshu, Secretary General of the national passenger car market information joint committee, is more optimistic. He said that the technical threshold of the subsidy scheme for new energy vehicles in 2022 remained unchanged, the subsidy scale relaxed the previously set upper limit of 2 million vehicles per year, and made it clear that the subsidy policy in 2022 would be implemented until the end of the year.
“The strength of policy subsidies is stable, and consumers\’ recognition of new energy vehicles has increased significantly. It is expected that the sales volume of new energy vehicles is expected to exceed 6 million in 2022, and the penetration rate will reach about 22% Cui Dongshu said.
“The irreversible trend of automobile new energy has basically taken shape, and the penetration rate is expected to exceed 30% in 2025.” Zhang Yongwei predicted.
Zhang Yongwei predicts that the outbreak of the new energy vehicle market will stimulate a new wave of automotive technology innovation. Technological progress has made new energy vehicles basically have the economic advantage of competing with fuel vehicles at the same level, and truly ushered in the inflection point expected by the industry.
He said that due to the economic advantages, the electrification of high-end brands is developing very fast, and Weilai automobile has entered the market of BMW and Mercedes Benz at the same price. In the A0 market, especially in the electric vehicle market with less than 50000 yuan, its cost performance also exceeds that of fuel vehicles. The advantages of electrification at both ends of “the cheapest car” and “the most expensive car” are very obvious. In the next few years, the focus of industry competition will focus on the “middle” market of about 200000 yuan, and gradually form new advantages.
the price of raw materials rises and car enterprises face the fierce competition
Achievements are obvious to all, and challenges need to be faced up to. It is a consensus in the industry that the severe “core shortage” situation will be alleviated slowly in the next one or two years. However, the new problem of sharp rise in raw material prices has also emerged.
“In the past year, the shortage of chips caused a shortage of supply, but the lack of core is a temporary phenomenon. The more lasting problem than the shortage of chips is the rise in the price of raw materials.” Gong Min said that the prices of traditional steel plates, iron, aluminum and copper, as well as rare metals used for fuel vehicles, have risen; Electric vehicle materials rose even more, and battery materials represented by lithium and cobalt and other materials rose. “We calculate that compared with 2020, the cost of a fuel vehicle in 2021 has increased by about 5000 yuan, and the cost of electric vehicles has increased by more than 10000 yuan.”
The gradual easing of chip supply is good news for the supply side, but it may be “mixed” for vehicle enterprises.
The increase of supply side may change the car market from “short supply” to “oversupply” in 2022. When the growth of the real economy slows down, the terminal demand may not be so strong, and there may not be so much “unmet demand”. The easing of the supply side will also increase the inventory, which may lead to the deterioration of the price environment. Superimposed with the rise of raw material prices, the industry profit margin will face some challenges.
“The 2022 sales target announced by various car companies is actually very radical.” Gong Min said that when the more radical plan is faced with maybe less strong demand, it may lead to fierce market competition and serious price war in the short term, which car enterprises need to face up to.
For consumers, fierce competition will inevitably lead to more technological innovation and model innovation. Consumers can buy more diversified products at cheaper prices, which will be the competitiveness of China’s automobile industry.
