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Accumulation of history, market demand, technological advantages … Is it waiting for the automotive market to bottom out or continue to slump?

A year ago, The Economist selected a report called “Great wheels of China” as its cover recommendation. The article proposes a “second transport revolution” perspective to explain the changes China’s auto industry is undergoing today.

The establishment of the “first transportation revolution” of a joint venture car company has promoted China ’s auto industry to realize an explosion in production capacity and meet the demand for private cars in the rapid accumulation of wealth; Energy vehicle R & D and manufacturing will become the core driving force.

It is reported that China’s advantage is very obvious. On the one hand, the history of car building is still shallow and the burden on stocks is small; on the other hand, the policy is tilted significantly and the market demand is large; in addition, it has comprehensive technical advantages in terms of batteries, shared travel, and autonomous driving.

But in just one year, all of this is facing unprecedented challenges.

On February 13th, the automobile production and sales data released by the China Automobile Association showed that automobile production and sales dropped significantly in January, with production and sales of 1.783 million and 1.941 million units, respectively, down 33.5% and 27% month-on-month, and down 24.6% year-on-year. % And 18%. The production and sales of new energy are expected to complete 40 thousand and 44,000 respectively, a year-on-year decrease of 55.4% and 54.4%.

The China Automobile Association said that since the Spring Festival holiday this year is in January, the decrease in effective working days compared with last year is the main reason for the decline in automobile production and sales in that month; in addition, the analysis results also show that the short-term impact of the new crown epidemic on the automotive industry will Greater than SARS, and in the long run it is more likely to affect the future global automotive market structure.

Historical accumulation, market demand, technological advantages … Wait for the auto market to bottom out or continue to slump?

01. The car industry that has been affected by all aspects

In fact, after the “first drop in 28 years”, “the implementation of National Six ahead of schedule”, and “the largest decline in 30 years” have caused difficulties to the automotive industry, many practitioners in the automotive industry under pressure have all responded to 2020. Expect high hopes as a turning point for bottoming out.

But a sudden epidemic not only disrupted the rhythm of the whole society in an instant, but also made “Aid Wuhan” a pastThe main election rate of major auto companies over time. According to incomplete statistics, as of February 12, more than 60 auto-related companies have donated more than 1 billion yuan of funds and materials to the “frontline of war epidemic”.

Benefits are big and small, and every stroke is worth remembering. But as the data from the China Automobile Association cited above, returning to the business itself, the automobile industry is falling into a huge uncertainty: to what extent will the epidemic affect it?

On the one hand, the weakness in the demand level is reflected. Unlike SARS, which occurred in late spring and early summer, the epidemic coincided with the traditional return-to-return cycle, and strict control measures were implemented everywhere.

As an asset-heavy and labor-intensive industry, this has actually caused a large number of employees in all walks of life to fail to return to work on time. The production and sales of enterprises cannot return to normal, and consumption declines, and eventually they will be reflected in affected income.

This will be directly reflected in the level of consumer confidence and willingness. Mass consumption represented by automobiles will be put on hold a lot. And even if it can drive sales through measures such as price reductions and payment of intentional gifts, the lack of 4S shop service capabilities is another hurdle.

The data released by the China Automobile Dealers Association shows that the comprehensive resumption efficiency of auto dealers as of February 12 was only 8.40%. Among them, the return rate of employees was 20.2%, the sales efficiency was 4.7%, and the after-sales efficiency was 6.2%. Among them, the local government stipulated the time for resumption, the application for resumption was not approved, and the shortage of epidemic prevention materials did not support resumption.

On the other hand, supply faces insufficient capacity. The worst-hit area, Hubei itself, is an important domestic province for automobile production. These include Dongfeng Honda, Dongfeng Nissan, Dongfeng Renault, SAIC-GM and other important mainstream brand production bases; related data show that as of the end of 2018, the output of automobiles was 2.419 million units, accounting for 8.70% of the total domestic automobile production that year;

Wuhan also has a large number of first-tier suppliers in the automotive industry. For example, Webast, which has recently received attention because Chinese employees infected German employees, as the automotive sunroof supplier occupying more than 50% of the global market, has the world’s largest factory in Wuhan; Bosch, Mahler, TRW, etc. are also in Wuhan has production bases.

Obviously, except for Hubei auto companies, all auto companies across the country may face shortages of spare parts and cannot produce normally in the future; even the failure to cooperate with suppliers in normal R & D, which will affect the progress of R & D mass production and delay the models Update the rhythm.

Obviously, the automotive industry is under full pressure from demand and attacks. So the question is, will “retaliation growth” really come?

02. Will retaliatory growth come?

Looking back at 2003, Taobao, JD.com, Ctrip, and Haidilao all caught up with the structural changes in the social business system.The special period and the subsequent “revengeful growth” resisted the shock and welcomed the turnaround. In this epidemic, due to the implementation of transportation capacity control and district access control in public transportation in various places, the advantages of private cars such as convenience, capacity, and safety have been highlighted Come out.

Will the auto market also usher in a strong rebound? Before answering this question, we must figure out a question, what exactly was the growth of that year? I think it is a “bonus”.

The “bonus” here needs to be quoted. The epidemic is obviously a “black swan” that no one wants to face. We only discuss the nature. There is a saying in Zhang Ruimin that “there are no successful companies, but only the companies of the times”, and the value of dividends in business is stated. The so-called dividend is that after the short-term supply-demand imbalance caused by changes in the basic factors such as users and technology, the advantage is gained by occupying the market.

The Chinese automobile market in 2003 was already in rapid development. At that time, China’s initial entry into the WTO, the national economy was still in a period of high double-digit development; in contrast, only 18.44 vehicles per thousand people, and the domestic automobile manufacturing industry is still in its infancy, making the market a typical The “bonus period” of imbalance between supply and demand.

In other words, the “revengeable growth” of automobile consumption must be based on suppressed real demand.

Back to the present day, does this “supply-demand imbalance” still exist? Obviously a question mark is needed. The auto market in 2018 ushered in the first decline in 28 years, in fact, it reflects that the rapid growth of the Chinese auto market has ushered in a turning point.

Many people will use the number of thousands of people as a reference. In 2019, the number in China was 173, while in the United States, the figure was 837, which is almost five times. It seems that there is still a lot of room for domestic automobile consumption; but this angle actually ignores a problem:

Are there not so many potential drivers? It is not difficult to draw from the car ownership and car driver data of the two countries: China has an average of 0.65 cars per driver, while the United States has an average of 1.28 cars per driver, less than a double gap.

When more than two-thirds of drivers own a car, it ’s hard to understand why the car market says goodbye to high growth. There are uncertainties in the big environment behind it, factors such as the over-expenditure of purchasing power in real estate, and the restrictions on purchases, licenses, and purchases in major cities.

In other words, affected by the epidemic, it is indeed possible for some people who originally have the ability to purchase cars, but do not have enough necessity, to speed up the car purchase plan; but more often, the purchasing power is reduced by the epidemic, or even People without purchasing power.

In general, the automotive market is different from catering and tourism. In retail, the possibility of “retaliatory growth” is not high.

03, more opportunities or serving the market

Nevertheless, the auto market under the epidemic is not limited to waiting. At the same time that the elimination of the last position is accelerating, the enterprises facing the waist and the head enterprises have to consider how to narrow the gap and stabilize their advantages.

The first is to accelerate the onlineization of services; revitalize people who have purchased power in the past, but benefit from people who have not bought a ride.

For 4S stores, the natural flow of visitors, second invitations, and bargaining transactions are extremely dependent on offline scenarios, and it is almost difficult to iterate and upgrade. At present, it seems that 4S store sales in various places have begun to try to guide customers to watch cars / deal online, and seek more diversified marketing methods such as live broadcast and short video. 4S shops have to cooperate with Internet companies to improve their digital capabilities.

For example, the “Car Evening” created by Auto House last year-the 818 Global Super Auto Show. On the one hand, it is linked with Hunan Satellite TV ’s network to increase the popularity, on the other hand, it integrates online and offline to create a 3D panoramic multi-dimensional visual car purchase scene through intelligent technology. It cooperates with large V and car models to multi-dimensional professional interpretation of products, and cooperates with manufacturers. Cooperative distribution of car purchase discounts has realized the unity of quality and effect of car sales.

In the long run, it is the technological innovation of filling cars and travel; especially after the impact of this epidemic, air filtering, temperature measurement and even higher-end anti-virus and anti-chemical functions will become extra points in car purchase decisions. For example, Geely announced a few days ago that it will invest 370 million yuan in advance to start the research and development of a “all-round healthy car” with virus protection.

In addition, industries such as shared mobility, autonomous driving, drones, and connected cars that slowed down or even got cold last year will also see more or less growth. For example, e-commerce companies in Jingdong have begun to land drones in the logistics and distribution of epidemic areas.

On the other hand, OEMs have accelerated cooperation with new auto retail platforms such as financial leasing to explore the sinking market.

Data released by Damo in 2018 shows that citizens in third- and fourth-tier cities have more generous spending than those in first- and second-tier cities. As many as one-third of the respondents plan to purchase new cars in the next two years. Higher than first- and second-tier cities (less than a quarter).

Compared with residents in first- and second-tier cities whose housing purchase demand has been suppressed by real estate and policies, “town youth” often not only have low daily consumption and a slight savings, but also a higher sense of wealth and security. With the expansion of social circles, it is urgent Hope to improve the quality of life.

For this group of people, traditional bank credit and auto finance products are difficult to cover. Geographical planning and other factors greatly diversify their needs. It is also difficult to be covered by the traditional 4S store sales system. Financial leasing has become a more efficient supplement.

For example, more than 5,500 community experience stores that have played a car have covered 31 provinces, 325 cities, and 2079 districts and counties; and among the current 400,000 users, the 4S point consumer groupsCustomers overlap less than 20%.

Compared to this, even if “retaliatory growth” is manifested, it is difficult to “renew life” for the traditional automobile industry. On the contrary, the promotion of business models, technological innovation, and industrial structure brought by it is more worthy of attention.