In fact, the reflex arc of the impact of this epidemic is very long. Although car companies have started construction one after another, they still face many problems. The new cars produced must have a market, car companies are also worrying about sales, and consumers have no money to buy cars. , Not to mention worrying about the car.
In order to stimulate automobile consumption, various regions have launched a number of policies to stimulate consumption, including encouraging local purchases of new automobiles, and supporting the consumption of new energy vehicles and the construction of charging piles. Industry insiders also said that a new round of “automobiles to the countryside” policy is expected to be introduced at the end of the month. However, industry insiders also predicted that the sales performance of the automobile market in May was still not optimistic.
Multiple policies to boost auto consumption
Automobiles are an important pillar industry of the national economy and a necessary consumer product for residents to travel. At present, they account for about 10% of the total social consumption. However, due to the long automobile industry chain, all links are closely linked, and the impact of this epidemic is also great.
According to the latest data from the China Association of Automobile Manufacturers, the domestic automobile production and sales in the first quarter of 2022 were 6.484 million and 6.509 million, up 2.0% and 0.2% year-on-year, respectively, and the growth rate was 6.8 percentage points and 7.3 percentage points behind the January-February period. Percentage points, the production and sales situation is not optimistic.
The reason why the industry showed a significant downward trend in growth during the same period in the first quarter is that industry analysts say that it is mainly due to the frequent occurrence of domestic epidemics and the increasing difficulties of market entities, which further increases the pressure on the automotive industry. Especially since April, the supply and demand of the auto industry has continued to be under pressure.
According to data from the Passenger Car Association, retail sales in the domestic narrow passenger car market reached 1.043 million units in April, a year-on-year decrease of 35.5% and a month-on-month decrease of 34.0%. The year-on-year and month-on-month growth rates of retail sales in April were at the lowest value in the history of the month. From January to April, the cumulative retail sales were 5.958 million, a year-on-year decrease of 11.9%.
Due to the impact of the epidemic, in April, some vehicle manufacturers and parts companies in Jilin, Shanghai and other core automotive industrial areas fell into a state of shutdown and production suspension, and automobile production and sales also declined. Affected by the epidemic prevention and control, logistics has been blocked, the production rhythm of some parts companies has been disrupted, and the supply of parts and components has been in short supply. At the same time, dealers in the sealed-off areas also stopped operating activities, and consumer demand declined.
Although the China Circulation Association said that with the improvement of the epidemic situation, the demand for car purchases that had been suppressed in the early stage will be released, but this is not a simple statement. It requires the cooperation of local governments to introduce policies to promote consumption and the introduction of support measures by various car companies. To ease the plight of the auto industry.
Cui Dongshu, secretary-general of the National Passenger Car Market, said that due to the impact of the epidemic, the income of employees in some industries has declined, and the purchasing power of such commodities as automobiles will weaken. In order to boost auto consumption, while the auto industry is resuming production and work, a number of measures to stimulate auto consumption have also been introduced intensively from the central to local governments.
As early as the executive meeting of the State Council held on April 13, the state encouraged large-scale consumption of automobiles and home appliances, and localities were not allowed to add new vehicle purchase restrictions, and gradually increased the vehicle increment index for those that have implemented purchase restrictions. Support the consumption of new energy vehicles and the construction of charging piles.
On April 21, the regular press conference of the Ministry of Commerce revealed that it will encourage large-scale consumption of automobiles and home appliances, deepen the reform of automobile circulation, expand the circulation of second-hand cars, support the accelerated development of new energy vehicles, and encourage local governments to carry out green and smart home appliances to the countryside. and trade-in.
On April 25, the General Office of the State Council issued the “Opinions on Further Unleashing Consumption Potential and Promoting Continued Recovery of Consumption”, stating, “Consolidate and expand consumption in key areas, encourage qualified areas to develop new energy vehicles and smart home appliances to the countryside, and promote brand consumption, Quality consumption into rural areas”.
From the central to the local level, the recently released “Several Measures for Further Promoting Consumption” proposed to encourage automobile consumption. From May 1 to June 30, 2022, a subsidy of 8,000 yuan per vehicle will be given to individual consumers who purchase new energy vehicles within the scope of the trade-in model in the province.
In addition, Guangzhou and Shenzhen should further revise and improve the regulations on car purchase qualifications, and increase the issuance of car increment indicators. From May to June, on the original basis, Guangzhou increased car purchase indicators by 30,000 and Shenzhen increased by 10,000 car purchase indicators to better meet the needs of the masses for car purchases.
Shandong Province has issued relevant policies, with a maximum subsidy of RMB 50,400 per vehicle for eligible non-public sector new energy vehicles in 2022, and a maximum subsidy of RMB 64,800 per vehicle for new energy vehicles in the public sector.
The Shenyang Municipal Bureau of Commerce and the Municipal Finance Bureau jointly issued the “Implementation Opinions on Promoting Automobile Consumption”, which clearly stated that nine policies and measures to promote automobile consumption were introduced in the city. One of the measures is that the municipal government has invested 100 million yuan to provide car consumption subsidies to individual consumers (no household registration limit) who buy cars in Shen. Individual consumers who purchase non-operating new cars from auto sales companies in Shenyang can apply for auto consumption subsidies from the government.
Yiwu City launched the 2022 automobile consumption promotion activity. Individual users can enjoy subsidies for car purchases in Yiwu. Each car buyer (subject to the certificate number) can only enjoy one car purchase subsidy during the policy period, with a maximum subsidy of 10,000 yuan per car.
It is believed that with the relief of the epidemic, some cities are expected to introduce relevant stimulus policies, such as Beijing, Shanghai and other first-tier cities, increasing the car purchase index may become one of the means to promote car consumption. The increase in car purchase indicators is expected to release consumer demand in the auto market.
Xin Guobin, Vice Minister of the Ministry of Industry and Information Technology, said that my country’s auto industry has strong resilience, a large market space, and a deep gradient. With the effectiveness of epidemic prevention and control, we are full of confidence in the simultaneous recovery of supply and demand. The loss of production and sales in the second quarter is expected to be made up in the second half of the year. Steady growth is expected.
However, industry insiders also believe that the introduction of subsidy policies in various places in a short period of time is only a drop in the bucket. Some local governments have introduced subsidy policies to stimulate consumption in the auto market, which will certainly have a positive effect. However, there are many reasons for this round of decline in car sales. For example, the shortage of chips, insufficient supply of raw materials, poor logistics, insufficient demand, etc., cannot be solved by car purchase subsidies alone.
Cui Dongshu pointed out that due to the needs of epidemic prevention, local governments are also facing huge pressure on public expenditure, and direct financial subsidies for car purchases are not generally applicable. In his view, the personal income tax has an obvious wealth-regulating effect and is an important means of redistribution of income and wealth. At present, among the deduction items of personal income tax, the purchase of a house loan is tax-deductible, but the purchase of a car is not tax-deductible, which is one of the problems that seriously restricts consumption.
To stimulate car consumption, it is necessary to solve the current problem
In this time to boost the consumption of the automobile market, the car going to the countryside was mentioned again. It is reported that a new round of policies to go to the countryside will be launched before the end of the month. In fact, the main purpose of going to the countryside is to tap the consumption potential of counties and townships, including automobiles and home appliances, to guide enterprises to develop business in rural areas, and to encourage the development of new projects in areas where conditions permit. Energy vehicles and green smart home appliances go to the countryside.
In fact, car going to the countryside has also played a key role in the development of China’s auto market. As early as 2009, due to the impact of the financial crisis, the growth rate of automobile sales was greatly reduced. In order to stimulate automobile consumption, we launched the policy of automobiles going to the countryside for the first time.
The policy points out that a one-time financial subsidy will be given to farmers for scrapping three-wheeled vehicles, purchasing light trucks, and purchasing minibuses with a displacement of less than 1.3 liters. In the year when the policy was implemented, my country’s auto sales surged by 46.1%, the highest growth rate in the past 20 years, and the stimulus effect was remarkable.
The second car to the countryside activity is mainly for new energy vehicles to the countryside. Starting from 2020, about 24 car companies have participated in the activities of new energy vehicles going to the countryside; from January to November 2021, the sales volume of new energy vehicles going to the countryside will be 927,000, which is higher than the overall growth rate of the new energy market.
Although the effect of the second new energy vehicle to the countryside has not yet been evaluated, the activities of new energy vehicles to the countryside have been improved every year. , services, and charging facilities will sink, closer to the rural market, and promote the smooth delivery of new energy vehicles to the countryside.
However, many people are also cautious about the policy of sending cars to the countryside during the epidemic. After all, the current urban industrial production and consumption are suspended, and the migrant workers in the cities are more affected and their incomes are reduced. The market response of automobiles as a bulk commodity going to the countryside is difficult to predict.
In addition, the current auto market is experiencing a rise in the price of new cars. In the past, consumers believed that buying a car was getting cheaper, but now it is the opposite. Almost all new energy vehicle companies launched by auto companies have raised prices in different degrees, ranging from thousands to tens of thousands of yuan.
The rising cost of car purchase obviously has an adverse impact on car consumption. The reduction of subsidies and the cancellation of purchase tax exemption also have a considerable impact on the auto industry, which is also a problem that the auto industry needs to solve urgently.
Although auto-related companies in Shanghai and Changchun have begun to resume work and production, it may be difficult for the auto industry chain to return to its previous level in a short period of time. Industry experts said that at present, the possibility of retaliatory rapid growth after the epidemic is less likely, but after the adjustment of the epidemic is over, the long-term stable growth trend of China’s auto market will not change.
We learned from the auto sales market that it is difficult for many dealers to meet the previously set performance assessment, and some cities have also relaxed or canceled the assessment of dealer tasks, especially dealers in Jilin and Shanghai. However, the current rate of customer arrivals in cities affected by the epidemic is still very low. Although selling cars through various online live broadcasts, the actual effect is not good.Many dealers said that the in-store customer traffic has declined significantly.public,Nissan,ToyotaIn this way, 4S stores with more customers have more or less reduced traffic. As for those car brands whose sales are usually average, one can imagine.
In order to stimulate new car transactions, dealers have offered good discounts on the terminal prices of many fuel vehicles in the store, but even this has failed to arouse consumers’ desire to buy a car. If this continues, perhaps the auto market in May will still be relatively sluggish, and dealers’ cars will not sell better than in April.
Under the tight supply and demand, enterprises need more support
The impact of the epidemic on the supply chain is visible to the naked eye, and the impact on the consumer side will affect the industry in a longer time axis.
First of all, from the perspective of the automobile supply side, the shortage of chips has not been effectively alleviated, and the price of power battery raw materials is also rising rapidly, which has pushed up the manufacturing cost of enterprise products to a certain extent, and the production and operation of automobile enterprises will also be affected to a certain extent. . In order to cooperate with the epidemic prevention and control, the production of FAW Group in Changchun, many car companies and parts suppliers in Shanghai has brought a great impact.
Although on April 22, Shanghai announced that 666 key enterprises can be given priority to resume work, most of which are enterprises in the automotive industry chain. However, since the number of workers who can resume work is still relatively small, there is still a long way to go before the actual resumption of work and production. More importantly, the material supply of Shanghai suppliers is currently cut off, and many downstream factories have to be forced to stop production.
Not only these few car companies are affected, but the entire auto industry is basically affected, even the factory in Hefei.NIO, also failed to resist the supply shortage of parts, which led to the suspension of production. Production was subsequently resumed, but the relevant person in charge of Weilai said that the recovery of production capacity depends on the recovery of the supply chain. If the supply chain cannot be improved, production may be suspended in May.
Even Huawei’s smart car BU CEO Yu Chengdong also stood up and said that Shanghai plays a vital role in the entire auto industry. If the resumption of work and production continues, after May, all technology/industrial industries involving Shanghai’s supply chain will be A complete shutdown, especially in the automotive industry! At the same time, he also lowered the sales target. He said that when the global car lacks chips, the previously proposed sales target of 300,000 units is too difficult, and it is a miracle to achieve 100,000-200,000 units in the first year.
Due to the impact of the epidemic, the shortage of automobile chips has not been alleviated, which has a great impact on automobile production, and it is also a continuous impact. In addition to the shortage of chips, the auto industry chain component manufacturers are also facing huge challenges, especially East China, which is the most developed region in my country’s auto industry chain, and because of the impact of the epidemic, most companies are in a state of shutdown and shutdown , which has also resulted in a severe shortage of spare parts, hampering the production of cars.
In addition, although the production of some new cars has been completed, due to epidemic prevention, logistics and transportation have also been severely hindered, and parts suppliers and OEMs, without exception, have been greatly affected. Industry insiders also said that from the analysis of the situation reflected in various places, the most prominent difficulty at present is that the external environment is severe and complex, the instability and uncertainty are increasing, and the superimposed epidemic situation is scattered in many places, resulting in more shutdowns of enterprises and poor logistics and transportation.
In addition, the prices of bulk raw materials continued to fluctuate at a high level, increasing the cost of mid-stream and downstream enterprises, and increasing the pressure on capital turnover of small, medium and micro enterprises, affecting the stable operation of the industrial chain and supply chain.
From this perspective, the raw material and parts suppliers in the supply-side structure of my country’s auto industry are mainly small and medium-sized enterprises. Under the impact of the epidemic, many upstream and midstream enterprises have encountered difficulties or are on the brink of desperation. Therefore, these SMEs need more support from relevant policies.
From the perspective of market consumption, the current supply and demand relationship is in a downward trend. Liu Yan, deputy secretary general of the China Automobile Association and director of the brand service and exhibition department, also admitted that the consumer side is currently facing the greatest pressure on the Chinese auto market. “The lack of willingness to consume will inevitably lead to a decline in sales.”
In fact, after the epidemic, many companies are facing rising costs and declining revenue and profits. It is even more difficult for those companies with poor anti-risk capabilities, especially the self-employed in the catering industry, which ultimately reduces their purchasing power and consumption. confidence.
And these behaviors are bound to have an impact on people’s consumption behavior, especially in the purchase of a car with a large consumption amount. The survey shows that many consumers who had previously intended to buy a car have postponed their plans, because the epidemic has affected their income levels, consumers are not confident in the future economy, and they will be extra cautious when buying large items such as cars.
Industry insiders also said that the current round of the epidemic has caused the consumer market, which was already showing signs of weakness, to face a contraction in demand. Therefore, it is difficult for the industry to have high expectations for the upsurge of automobile consumption this year. An insider of a car company also said that there may not be a climax of car consumption after this round of the epidemic, “The epidemic has been going on for several years, and the consumer market basically buys cars. It has a great impact on everyone’s enthusiasm for buying a car.”
From the current point of view, both the supply side and the consumer side of the automobile industry are facing great pressure. The Ministry of Industry and Information Technology has now made the smooth supply of the industrial chain as its current priority. A supply chain coordination platform for key industrial chains such as automobiles, integrated circuits, and medical supplies has been established, focusing on key regions such as the Yangtze River Delta and the Pearl River Delta, and one by one to solve the problems of employees returning to work, logistics and transportation reported by industrial chain enterprises, and strive to protect upstream and downstream enterprises. Collaborative production, with the point leading the chain and the chain leading the surface, ensures the smooth operation of key industrial chains.
In addition, various places have also given policies to stimulate consumption of bulk items. The two-pronged approach is to provide more support to enterprises and bring the auto industry back to the right track as soon as possible.
Summarize
It can be seen that in order to boost car consumption, both the central and local governments have given support policies. However, in order to restore the level before the epidemic, we need to increase support. It is not enough to rely on cars to go to the countryside. After all, this time it affects the people of the whole country. As one of the pillar industries of the national economy, the automobile chain is very long, and it affects the whole body. How to solve the difficulties of the automobile industry is a major problem that the entire national economy needs to face.
(Editor-in-charge: Liu Lili)