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Silver lining of 2018 Chinese auto market, Chinese automakers rising against trend

From:Internet Info Agency 2019-01-29 17:00:14

“Cold current invasion” and “sluggish” are the general status of the Chinese auto industry in the past year. According to data released by the China Association of Automobile Manufacturers (CAAM), the sales volume of passenger cars in China last year was 23.709 million units, down 4.08% year-on-year, which was the first negative growth over the past 28 years. In particular, Chinese brand passenger cars have a relatively obvious downward. A total of 9,997,900 new cars were sold last year, down 8% year-on-year. This is also the first time in the past three years that the sales of Chinese brand passenger cars have fallen below 10 million units.

Along with the decline in new car sales, the market share of Chinese brand passenger cars has also decreased from 43.9% in 2017 to 42.1%, and this part of the market is divided by German, Japanese and Korean brands. The same data from the CAAM shows that the market share of German and Japanese brand passenger cars increased by 1.8 percentage points last year, and the Korean brand passenger cars also rose by 0.4 percentage points.

2018 Sales ranking of Chinese brands (Official data)

Manufacturer

Sales in 2017 (10k units)

Sales in 2017 (10k units)

Year-to-Year growth

SAIC-GM-Wuling (including commercial vehicle)

215

207.7

-3.4%

Geely

124.71

150.08

20.34%

Changan

166.28

150

-9.8%

GWM

107

105.3

-1.6%

Chery

68

75.3

10.74%

SAIC passenger car

52.2

70.19

34.46%

GAC Motor

50.86

53.52

5.23%

BYD

40.97

52.07

27.1%

JAC Motors

51.09

46.24

-9.5%

JMC

31

28.51

-8.03%

Made by Internet Info Agency (IIA)

Among the sales data above, sales of five manufacturers continued to rise, while the other five were not as good as in previous years. Of course, this is closely related to the size of each car company, and it is also related to the way different manufacturers deal with the current situation of the market.

Rapid growth in adversity

Speaking of the fastest growing Chinese car companies last year, it must be the SAIC passenger car. With the contribution of the Roewe brand and the MG brand, the SAIC passenger car completed a total of 719,900 vehicle sales last year, a year-on-year increase of 34.46%. Among them, the Roewe brand sales increased by nearly 20%, and the MG brand sales increased by 100%.

All of this is due to the fact that SAIC passenger cars had been selling well in the past year (e.g. Roewe i5, Roewe RX3, Roewe RX5, MG ZS and MG 6). Meanwhile, the company also achieved good results in the new energy field and overseas markets (the MG). Although the number of 700,000 vehicles is not enough to make SAIC passenger cars among the top five Chinese brand manufacturers, the progress of it is obvious, and it has become one of the most efficient companies to deal with the sluggish market.

Transformation acceleration

If, in the past year, SAIC passenger cars were going upstream, then Changan Automobile was accelerating its transformation in the “cold winter”. According to sales figures released by the company, in 2018, Changan Automobile sold a total of 1,499,747 new cars, a decrease of 9.8% compared with 2017, but new energy vehicles increased by 38.3% year-on-year, reaching 42,410 units. In this way, Changan seems to be the one that is more frustrated, but this situation is actually excusable.

Last year was the year of historically significance for Changan Automobile. The company has not only released the third innovation and entrepreneurship plan, the “Beidou Tianshu Plan” and other important strategies, but also strived to accelerate the electrification process and to enter the mid- to high-end brands in the future. In this context, the difficulty of transformation may be inevitable. The only difference is whether it can be determined to go on.

However, for this year, Changan Automobile has already prepared and will gradually introduce a number of new products to the market. I believe that it will change the trend of 2018.

Decline is inevitable in such trend

Of course, in the context of the overall sales decline and the transformation of the Chinese auto market from the incremental market to the stock market, even some large mature car companies cannot avoid sales decline. Among them, SAIC-GM-Wuling and Great Wall Motor are typical examples. The former had a total sales volume of 2.077 million units last year, down 3.4% year-on-year, while the latter decreased slightly by 1.6%. The cumulative sales volume reached 1.053 million units.

From the year-on-year figure of 2018, the sales of these two car companies are lower than that of 2017. However, from the month-to-month figure, they have just adapted to the trend of the market. Take GWM as an example, since last August, its month-to-month growth rate had maintained positive growth in the chain, with 19.67%, 35%, 26.94% and 20.35% respectively. It had completed a year-on-year growth of 6.5% in December. In addition, during this period, GWM also completed the deployment of the four brands of Haval, the Great Wall pickup, WEY and Ora. Among them, Haval had achieved 5 million vehicles worldwide and will enter the international market.

The situation of SAIC-GM-Wuling is similar to that of Great Wall Motor. Although the overall performance has declined last year, it has stabilized the position of NO.1 in the sales of Chinese brand car manufacturers. It can be imagined that in the face of the sluggish market situation, the slight decline is not hurtful, but it is a shortcut to better the brand.

Continuous contraction maybe fatal

Although Geely it did not complete the sales target of 1.58 million units last year, and the growth rate was far less than that of 2017 at 63%, the annual sales of 1.5 million vehicles and more than 20% of growth rate was still decent. However, the fact is that Geely was not as good as the figures showed.

Judging from the sales data of Geely Automobile, since last September, the growth rate of the company had been narrowing from 14.3% to 2.6%, and then, to -1.1%. It even plunged 39% in December.

In addition, from the perspective of model sales, Geely's best-selling models are still Bo Yue, Emgrand and Emgrand GS. However, the first two have different degrees of decline compared to 2017. Among them, Bo Yue fell 10.9% year-on-year, and the main products are gradually losing their appeal.

NEV is the silver lining

Last year, the new energy vehicle was the silver lining, which really benefits many car companies, including Changan Automobile, SAIC Passenger Car and Geely Automobile. However, the company with the most revenue in new energy products maybe BYD. They sold 520,687 new cars in 2018, up 27.1% year-on-year, of which new energy vehicles accounted for 47.6%, reaching 247,811 units.

In addition, best-selling MPV products are also the key to BYD's growth. According to the data, MPV were sold 141,068 units last year, among which the best-selling model was the Song MAX. After listing, the average monthly sales of it reached more than 10,000 units.

In the top 10 list, the car companies that have been revitalized by new energy vehicles include JAC Motors and JMC. Judging from the annual sales data, JAC dropped by 9.5%, while its new energy vehicles increased by 125.28% to 63,671 units, which undoubtedly became the guarantee for it to enter the top 10.

So was JMC. The company's total sales volume in 2008 was 285,066 units, down 8.05% compared with 310,028 units in 2017. However, when nearly 50,000 units of JMEV were added, the figure would be on the rise.

Overseas market brings new opportunities

In addition to enjoying the dividends brought by new energy vehicles, many car companies have also focused on overseas markets. According to sales figures released by Chery Automobile, its cumulative sales volume for 2018 was 752,759 units, an increase of 11% year-on-year. This part is due to the breakthrough of enterprises in the new energy field, which up 146% year-on-year. Another reason is the expansion of enterprises in overseas markets. Last year, Chery's overseas market sales reached 126,993 units, an increase of 18% year-on-year.

Like Chery Automobile and SAIC MG, companies including GAC passenger cars and GWM also regard overseas markets as a new growth point. In 2018, the cumulative sales volume of GAC Motor was 535,168 vehicles, a slight increase compared with that of 2017. However, the company prefers entering into the North American market for further development. So is GWM.

The Haval’s “5-2-1 globalization strategy” focuses on future layout. In the face of the sluggish Chinese auto market, overseas market has become a hot spot for Chinese car companies to compete.

Summary: The Chinese auto market in 2018 can be described as a parabola. The market situation in the first half of the year was much better than that in 2017, while in the second half of the year, it entered a trough. This really gave the major auto companies a lesson. In such content, it is no longer possible to win by simply relying on the product. How to improve brand power and win the favor of consumers is the key. Some experts predicted that the “cold winter” of the automobile market will continue in 2019. If you want to spend this "winter" smoothly, you may need to come up with new ideas.

Editor:Wang Lei