In 2021, after experiencing a series of impacts such as the spread of global epidemic, the reduction of consumption expectation and the risk of global supply chain, the automobile market is facing great pressure, but China’s annual automobile production and sales still show a steady growth trend.
On January 12, at the press conference on the development of automobile industry in 2021, Wang Weiming, director of the first Department of equipment industry of the Ministry of industry and information technology, introduced that China’s automobile production and sales completed 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. Among them, the sales of Shanxi Guoxin Energy Corporation Limited(600617) vehicles completed 3521000 in 2021, with a year-on-year increase of 1.6 times, ranking first in the world for seven consecutive years, further indicating that the new energy vehicle market has shifted from policy driven to market driven.
At the same time, driven by the recovery of the international market and the improvement of the competitiveness of Chinese brands, China’s automobile export has performed well. Since April, it has refreshed historical records for many times, and the annual export has exceeded 2 million vehicles for the first time.
Fu Bingfeng, executive vice president and Secretary General of China Automobile Association, predicts that China’s total automobile sales will reach 27.5 million in 2022, with a year-on-year increase of about 5%. Among them, there were 23 million passenger cars, a year-on-year increase of 7%; 4.5 million commercial vehicles, a year-on-year decrease of 6%; New energy vehicles will reach 5 million, a year-on-year increase of 42%, and the market share is expected to exceed 18%.
Accelerating the transformation of automobile market to new energy
In 2021, the production and sales of new energy vehicles continued to grow at a rapid rate, with 3.545 million and 3.521 million vehicles respectively, an increase of 1.6 times year-on-year, which is more obvious than that of the automobile industry as a whole.
Cui Dongshu, Secretary General of the Federation, told the 21st Century Business Herald that the trend of new energy vehicles is significantly different from that of traditional fuel vehicles. New energy vehicles are realizing part of the substitution effect on the fuel vehicle market, driving the vehicle market to accelerate the pace of transformation to new energy.
Previously, the new energy vehicle industry development plan (2021-2035) issued by the State Council Office proposed that by 2025, the sales of new energy vehicles will account for about 20% of the total sales of new vehicles. According to Fu Bingfeng, the market share of new energy vehicles will be 13.4% in 2021 and will further increase in 2022, which is expected to reach 18%.
The notice on the financial subsidy policy for the promotion and application of new energy vehicles in 2022 issued at the end of 2021 proposes that the subsidy standard for new energy vehicles in 2022 will decline by 30% on the basis of 2021. Affected by this, Tesla, Xiaopeng automobile and other brands have raised prices.
According to Cui Dongshu’s analysis, the decline in subsidies for new energy vehicles will not affect the sales of the overall models. At present, there are still some orders for new energy vehicles waiting to be delivered last year, and the price will not be affected by the price rise in the new year. After these orders are delivered, if the market continues to be hot, and considering the rising cost of raw materials, tight supply chain and other reasons, some auto enterprises may increase their prices for sales. however, with the doubling of the scale of the new energy vehicle industry chain and the improvement of cost reduction ability, the price of new energy vehicles will remain stable in a reasonable range.
It is worth noting that among the new energy models sold at present, high-end products with more than 200000 yuan represented by Tesla and low-end products with less than 100000 yuan represented by SAIC Wuling have become the mainstream in 2021, and the middle-end new energy vehicle market needs a breakthrough.
Cui Dongshu said that the reason for the weak competitiveness of products in the middle-end market is that its value preservation rate is relatively low. It is not only lack of technical advantages of high-end products, but also difficult to compete with products in the low-end market. However, with the intensification of competition in the new energy vehicle market, it is changing from “dumbbell type” to “spindle type” or “olive type”.
Wang Shulei, an assistant researcher at the Planning Institute of CCID think tank, told the 21st Century Business Herald that at present, products in the mid-range market are still facing problems such as unreasonable layout of charging piles, low popularity, difficult public charging, slow charging speed, incompatibility of charging piles and so on.
In contrast, car companies in the high-end market have laid out in advance in the field of charging supporting facilities. For example, Tesla began to continuously invest in the field of charging supporting facilities as early as 2012. At present, it has become a vehicle enterprise with early construction of charging pile project, large number of self owned charging piles, fast charging efficiency and layout covering the East, West, North and south main roads in China. The charging supporting threshold of products in the low-end market is relatively low and the battery life is relatively convenient. You can not only use the household power supply to charge through the self-contained charger, but also use the roadside paid charging pile to charge, which makes the charging life more flexible.
Wang Shulei reminded that domestic new energy vehicle enterprises should seize the opportunity period of “time window” when giants have not yet set foot in China’s niche market and foreign countries are still troubled by the epidemic, and fully tap the consumption potential of China’s Shanxi Guoxin Energy Corporation Limited(600617) automobile niche market.
supply chain pressure may ease in the second half of the year
The wave of “core shortage” that broke out at the end of 2020 has not subsided yet. In 2021, front-line manufacturers outside China such as GM, Ford, Honda, Toyota and great wall were also affected by core shortage and reduced production to varying degrees. the chip consumption of new energy vehicles is about twice that of traditional internal combustion engine vehicles. As the core component of new energy vehicles, the loading volume of power batteries also rises sharply with the growth of new energy vehicle sales.
Wang Weiming said at the press conference that at present, the world’s major chip enterprises have gradually increased the production and supply of automobile chips, and the new production capacity will be released in the second half of this year. It is expected that the shortage of automobile chip supply will be gradually alleviated in 2022.
Cui Dongshu told the 21st Century Business Herald that the lack of core and battery will still be prominent in early 2022. However, with the completion of delayed order delivery of new energy vehicles, chip supply and demand will return to a tight balance after the first quarter. In terms of batteries, a large amount of investment has been made into the lithium iron phosphate battery industry. By the second half of 2022, the battery shortage will also be “significantly improved”.
At present, with the rapid growth of Shanxi Guoxin Energy Corporation Limited(600617) vehicle ownership, the decommissioning of power batteries is also increasing year by year. Doing a good job in power battery recycling is of great significance to protect the ecological environment, improve resource utilization efficiency and ensure the healthy and sustainable development of new energy vehicle industry.
Insiders told the 21st Century Business Herald that the rapid development of new energy vehicles has also gradually made lithium, cobalt, nickel and other battery raw material resources popular, of which the import of some resources accounts for a large proportion . In this case, it is becoming more and more important to develop the power battery recycling industry, standardize market transaction standards and promote the recycling of battery metal raw materials.
In this regard, Wang Weiming said that in the next step, we will accelerate the research and formulation of the management measures for the recycling of power batteries of new energy vehicles, accelerate the introduction of a number of national and industrial standards for the recycling of power batteries, carry out the pilot acceptance of the recycling of power batteries, continue to implement the industry standard management of the comprehensive utilization of waste power batteries, and establish a number of echelon and recycling benchmark enterprises.
At the same time, research and establish the linkage mechanism of management and control of power battery recycling, strengthen Wuxi Online Offline Communication Information Technology Co.Ltd(300959) collaborative traceability supervision and management, compact the responsibilities of relevant subjects and improve the efficiency of supervision.
explosive growth in new energy vehicle exports
In 2021, although the global epidemic continues to spread, China’s automobile exports ushered in development opportunities. In 2021, China’s automobile exports exceeded the 2 million mark for the first time, reaching 2.015 million, a year-on-year increase of double. This year, the exports of brand automobile enterprises including Saic Motor Corporation Limited(600104) , Great Wall Motor Company Limited(601633) showed rapid growth, and the export volume of the four automobile enterprises increased by more than 100%.
Among them, in 2021, the total annual export volume of SAIC passenger cars reached 290000, a year-on-year increase of 68%; Chery exported 269000 vehicles in the whole year, a year-on-year increase of 136.3%; Great Wall Motor Company Limited(601633) overseas sales of 142000 vehicles, a year-on-year increase of 103.7%; Chongqing Changan Automobile Company Limited(000625) 114000 vehicles were sold overseas, a year-on-year increase of 114.3%; Geely exported 115000 vehicles in 2021, a year-on-year increase of about 58%.
Why will cars double in 2021? Cui Dongshu believes that the impact of the epidemic and chip shortage in 2021 is global, and the supply capacity of overseas automobile manufacturers has also declined. Due to the good epidemic control in China, the production capacity of the whole vehicle and parts industry chain has recovered rapidly, making up for the gap in product supply in the overseas automobile market.
At the same time, the explosive growth of and Shanxi Guoxin Energy Corporation Limited(600617) automobile exports has effectively promoted the growth of China’s automobile exports this year. According to Fu Bingfeng, 310000 new energy vehicles will be exported in 2021, a year-on-year increase of three times. The European market has become a major incremental market, mainly concentrated in developed countries such as Belgium, Britain, Germany, France and Norway, reflecting the international competitive advantage of Shanxi Guoxin Energy Corporation Limited(600617) automobile.
In addition, the RCEP agreement officially entered into force on January 1 this year, and China has made a zero tariff commitment to about 65% of auto parts.
Gao Lihong, director of International Cooperation Department of China Machinery Industry Federation, pointed out that the implementation of RCEP will reduce the circulation cost of auto parts among member countries, and further optimize the regional auto industry chain, so as to enhance the competitiveness of Asian vehicle manufacturing industry. Therefore, we should take this opportunity to support Chinese automobile enterprises to “enter ASEAN” and strive to cultivate them into China’s export fist products with strategic significance.
Thailand, Malaysia and other countries pay attention to energy conservation and carbon reduction. China’s Shanxi Guoxin Energy Corporation Limited(600617) automobile industry is actively seizing new overseas market space with certain technical and industrialization advantages. at present, Great Wall Motor Company Limited(601633) , Geely Automobile, SAIC and other brand car enterprises have entered the Southeast Asian market through investment, plant construction or M & A, which has supported Chinese brands to take root overseas and laid a solid foundation for future growth.
