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The downturn of the automotive market is accelerating industry reshuffle, and technological improvement and demand orientation have become the focus of competition
2024-05-15

In September of this year, automobile production and sales significantly decreased compared to the same period last year, continuing the sluggish trend of the automobile market since the beginning of this year. Among them, the year-on-year decline in production and sales of passenger cars and commercial vehicles is very significant. In the first nine months of this year, the overall growth rate of automobile production and sales also continued to decline, and the overall performance was lower than the expectations at the beginning of the year.
The sluggish car market has accelerated the reshuffle of the automotive industry, with some cars gradually withdrawing from the market, while products that vigorously promote technological upgrades and strive to meet market demand will usher in spring.
Slow growth will become the norm in the automotive market
The monthly production and sales data released by the China Association of Automobile Manufacturers recently showed a significant year-on-year decline in automobile production and sales in September this year. In that month, the national automobile production and sales were 2.3562 million and 2.3941 million, respectively, a year-on-year decrease of 11.71% and 11.55%. Among them, 2024800 passenger cars were produced, a year-on-year decrease of 11.86%; Sales of 2.0605 million vehicles decreased by 12.04% year-on-year. From January to September, the year-on-year growth rate of passenger car sales fell below 1%, only 0.64%.
It is not difficult to see from the data that the growth momentum of new energy vehicles and luxury vehicles is very strong, but the market conditions of traditional fuel vehicles, independent and joint ventures are not satisfactory. This "polarization" phenomenon is obviously not conducive to the growth of car market sales.
In addition, the SUV market, which used to grow wildly, has also returned to rationality. In September, SUV narrow retail sales decreased by 14.5% year-on-year, to only 803000 units. The cumulative sales of SUVs in the first three quarters of this year were 6.847 million units, with a year-on-year growth rate narrowing to 0.4%.
In response, Vice Minister of Industry and Information Technology Xin Guobin stated that the period of high-speed growth in automobile production and sales has passed, and low-speed growth may become the norm in the automobile market. However, at the same time, the concentration of China's automotive industry is also further increasing. "There are still many positive factors in China's automotive industry. Considering the replacement and scrapping of old cars and the demand for some third and fourth tier small towns, the growth space of the automotive industry is still relatively broad," said Xin Guobin.
Faced with the increasingly competitive automotive market, major enterprises are constantly improving their technical strength and product quality to better meet market demand.
Recently, Beijing Hyundai's all-new high-performance sedan, the Fiesta, was officially launched, with prices ranging from over 110000 to over 150000 yuan, directly dropping into the price range of independent products.
Liu Yu, the permanent deputy general manager of Beijing Hyundai, said, "Previously, Hyundai would generally launch new car models in China after six or four months globally, but now it is the first to launch in China. In addition, in the past, production has been organized according to the automotive consumption logic of the European and American markets, but now it emphasizes meeting the needs of Chinese consumers. These are all changes that Beijing Hyundai is promoting localization."
According to Wen Chengkun, Deputy General Manager of Beijing Hyundai South Korea, the Beijing Hyundai Yantai R&D Center is Hyundai's overseas R&D center, specializing in the development of vehicle models for the Chinese market. At present, Beijing Hyundai is actively promoting localization in research and development, production, design, technology, and other aspects, achieving 98% localization and striving to achieve 100% localization.
Data shows that since the second half of this year, Beijing Hyundai's sales have been increasing every month. Although the overall Chinese automotive market has slowed down, Beijing Hyundai's terminal retail is positive. "For prepared enterprises, this is a very good opportunity," Liu Yu said.
New energy vehicles are growing against the trend
In the first nine months of this year, the overall production and sales of automobiles continued to decline, with both passenger and commercial vehicles showing a significant decline. However, new energy vehicles showed a trend of rapid year-on-year growth.
In September, the production and sales of new energy vehicles reached 127000 and 121000 respectively, an increase of 64.4% and 54.8% compared to the same period last year. In the first nine months, the production and sales of new energy vehicles reached 735000 and 721000 respectively, an increase of 73% and 81.1% compared to the same period last year.
Both in terms of production and market demand, new energy vehicles have shown a very rapid growth trend. During this year's National Day holiday, Suzhou Auto Show, as a car exhibition in Jiangsu region, was exceptionally hot, with a record high number of exhibitors, visitors, and transaction volume. Although the growth of the car market has slowed down and is currently during the National Day holiday period, almost all of the cars on sale in China have arrived. New energy and intelligent vehicle models have also become the highlights of the Suzhou Auto Show, with many manufacturers releasing a large number of new technologies and products at the show.
Peng Jianming, the organizer of the auto show and chairman of Suzhou Zhicheng Exhibition Service Co., Ltd., stated that although the growth rate of the auto market has slowed down, the demand for automotive products and the trend of consumption upgrading have not changed. Higher quality and technological automotive products are highly sought after in the market, and new energy and intelligent vehicles have become a new growth point in the automotive market.
With the continuous growth of market demand, major domestic and foreign automotive companies have also increased their efforts to promote the research and production of new energy vehicles. A large number of independent car companies such as BAIC, SAIC, Changan, BYD, and Geely have achieved tremendous development in the field of new energy. BAIC New Energy has replaced Tesla as the world's best-selling pure electric vehicle enterprise, while a large number of international companies such as Mercedes Benz, BMW, Volkswagen, Toyota, and Hyundai have also invested in new energy vehicle products in the Chinese market.
At the same time, there have been multiple breakthroughs in the technological route, not only in pure electric vehicles, but also domestic and foreign car companies continue to make efforts in hybrid power, fuel cell and other technologies.
At the recent China South Korea Automotive Industry Development Seminar, domestic and foreign experts stated that the development of new energy vehicles requires multiple legs, and hydrogen fuel cell vehicles will be the commanding heights of technological competition in the future automotive industry. It is expected that by 2030, China may achieve large-scale promotion and application of fuel cells and hydrogen energy, and pure electric vehicles and fuel cell vehicles will complement each other in the long term.
Zhang Xueying, Deputy Director of the Information Center, stated that hydrogen energy has advantages in achieving zero emissions in the industrial and power sectors, especially in the transportation sector. China is rich in hydrogen energy and is a global producer of hydrogen. However, the development of China's hydrogen energy industry started relatively late and is currently in its early stages of development.
At present, multinational car companies such as Toyota, Honda, and Hyundai have carried out small-scale production and sales of fuel cell vehicles. It is understood that by 2025, Hyundai Motor will export approximately 5000 fuel cell vehicles, including passenger and commercial vehicles, to France. Domestic companies such as Yutong, Foton, and CNHTC have also developed multiple products such as fuel cell buses, logistics vehicles, and tractors.
Zhang Jinhua, executive vice president and secretary-general of the Chinese Society of Automotive Engineering, said that in the future, we will focus on breaking through key technologies, strengthening the industrial chain and grasping the weak points, and constantly promote the multi-directional development of new energy technologies such as pure electric power and fuel cells.
Increased pressure of independent competition
In September this year, the market share of self owned passenger cars decreased significantly. The sales of autonomous passenger cars reached 806000 units, a year-on-year decrease of 16.5%, accounting for 39.1% of the total sales of passenger cars, a decrease of 2.1 percentage points compared to the same period last year. The sales of sedans, SUVs, and MPV models have all shown a downward trend year-on-year. Previously, the sales of independent SUV models decreased by 18.6% year-on-year, while the sales of MPV models decreased by nearly 20% year-on-year.
In the first nine months, a total of 7.242 million autonomous passenger cars were sold, a year-on-year decrease of 1.5%, accounting for 42% of the total passenger car sales, a decrease of 0.9 percentage points compared to the same period last year. The proportion of sales of sedans, SUVs, and MPVs is showing a downward trend.
The Ministry of Industry and Information Technology stated that the slowdown in automobile sales growth is due to various reasons. Currently, China's automobile production and sales base is relatively large, reaching a production and sales scale of 29.4 million vehicles in 2017. It is difficult to achieve sustained high-speed growth on this base.
At the same time, consumers have a strong demand for upgrading their consumption, and their demand for automotive product technology, quality, and other aspects is even higher. This is also driving China's automotive industry into a critical period of transformation and upgrading, and the industry reshuffle is further accelerating.
Experts say that although the growth rate of the automotive market has slowed down, there are many positive factors in the development of China's automotive industry. The concentration of the automotive industry has further increased, and the main business revenue of the automotive industry has grown higher than the growth rate of production and sales. The industry as a whole is relatively healthy. Meanwhile, new energy vehicles have maintained a good development momentum.
Xin Guobin stated that with the increase of car ownership, there is great potential for the demand for the replacement of old cars, and there is also a high demand for car consumption in some small towns in the third and fourth tier. The growth rate of the car market in the future may not be as fast as before, but the development space is still relatively broad.

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