Abstract: New energy vehicles are still the bright spots of growth, but the epidemic has seriously interfered with the operation of the automobile industry, and many enterprises have stopped production or closed-loop production
Text | Guo Huaiyi
Edited by 丨 Wang Jingyi
Affected by multiple negative factors such as the epidemic, the good development momentum of China's automobile industry since 2022 was interrupted in March. On April 11, the China Association of Automobile Manufacturers (hereinafter referred to as the China Association of Automobile Manufacturers) released a production and sales report showing that in March, automobile production and sales reached 2.241 million units and 2.234 million units, down 9.1% and 11.7% year-on-year, and the momentum of year-on-year growth in production and sales for two consecutive months this year has been interrupted.
According to data previously released by the China Automobile Association, in January and February 2022, the cumulative production and sales of automobiles increased by 8.8% and 7.5% respectively year-on-year. Dragged down by March data, cumulative production and sales of automobiles totaled 6.484 million units and 6.509 million units throughout the first quarter, up 2.0% and 0.2% year-on-year.
▲ Automobile production in March 2022 Figure source China Automobile Association
▲Automobile sales in March 2022 Picture source China Automobile Association
Fu Bingfeng, executive vice president and secretary general of the China Automobile Association, said to Caijingqiche : "Although the production and sales of automobiles at the beginning of the year ushered in a good start and the development momentum was good, with a series of factors, including the rise in the price of raw materials for power batteries, the increase in fuel prices, the shortage of chip supply, the outbreak of the domestic epidemic at multiple points, etc., it will bring new problems and new challenges to the stable, orderly and healthy development of the industry, and will also have an impact on the annual sales trend and even the process of subsequent industrial upgrading and transformation." ”
The rapid growth of new energy vehicles has become a bright spot
From the perspective of market segmentation, in March, new energy vehicles still maintained growth, passenger cars were basically flat, and commercial vehicles were still in the downward range.
According to the China Automobile Association, in March, the production and sales of new energy vehicles reached 465,000 units and 484,000 units, respectively, an increase of 1.1 times year-on-year, and the market share reached 21.7%. In the first quarter, the cumulative production and sales of 1.293 million units and 1.257 million units increased by 1.4 times year-on-year, and the market share reached 19.3%.
The passenger car market information joint meeting pointed out that there is a certain contrast between the trend of new energy vehicles and traditional fuel vehicles in March, and the purchase of production materials in March drives the demand for traditional car exchange, releasing the popularity of automobiles and upgrading consumption; the strong growth of new energy vehicles in the spring influenza season, the safe travel of the second car of the family is of great significance, echoing the further recognition and adaptation of urban residents to new energy models in short-distance travel.
The Association believes that the sales of new energy vehicles are better than in March of the calendar year. Overall, although the domestic epidemic still has local sporadic cases, especially in megacities with main sales of new energy such as Shenzhen and Shanghai, the relatively mild epidemic prevention measures in most areas at that time had no obvious impact on residents' travel and car purchase consumption, which promoted the sales of new energy vehicles and had sufficient overall orders.
New energy vehicles are thriving, but the overall production and sales of the automobile market have declined.
In March, production and sales of passenger cars totaled 1.881 million units and 1.864 million units, up 22.4% and 25.1% sequentially and 0.6% y/y. In the first quarter, the company produced and sold 5.499 million units and 5.545 million units, up 11% and 9% year-on-year.
In March, commercial vehicle production and sales totaled 360,000 units, up 29.2% and 47.7% sequentially and 38% and 43.5% y/y. Production and sales of 985,000 units and 965,000 units were produced and sold throughout the first quarter, down 29.7% and 31.7% year-on-year, a decline that was wider than in January to February.
Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, told Caijingqiche that the domestic epidemic situation is frequent, the difficulties of market players have increased significantly, the smooth economic cycle has encountered some constraints, and the new downward pressure has further increased. From the perspective of automobile supply, the shortage of chips has not been significantly alleviated, the price of raw materials for power batteries has risen rapidly, further pushing up the manufacturing costs of enterprise products, and the production and operation activities of automobile companies have been affected to a certain extent, and the overall situation is less than expected.
Looking forward to April, automobile production and sales are still facing a state of uncertainty. According to the national bureau of statistics, Shanghai and Jilin province each account for about 11% of the country's production, and the production of some enterprises in Shanghai is running at full capacity, so the production and sales of passenger cars in the core areas will be greatly affected in April. Due to the long automotive industry chain, high coordination requirements, and a wider range of suspension radiation in the core production and logistics bases, the production and marketing pressure in the automobile market in April may be very large.
The pandemic has dragged down automobile production
It is not difficult to see from the judgment of the China Automobile Association that the new crown epidemic has caused great pressure on the industry. In fact, the disruption of the automotive supply chain by the epidemic has long plagued the production and operation activities of enterprises.
▲ Image source network
At the 100 Chinese Electric Vehicles Conference in late March, Xiaopeng Motors (NYSE: XPEV; 9868. HE Xiaopeng, founder of HK), told CaijingQiche (ID: caijingqiche): "(The supply chain is) I am hesitating about the problem, and now more and more cities have some partial or some areas that have a closed situation, which is a huge setback for the automotive industry chain." We have communicated with the Department of Industry and Information Technology and the Ministry of Industry and Information Technology of various provinces, and we are very grateful to the government for helping us solve this matter, but if it lasts for several months, it may have a relatively huge impact. ”
At present, due to the impact of the new crown epidemic, some car companies have stopped production or closed production.
On March 13, affected by the epidemic in Changchun, China FAW decided to stop production at five major vehicle plants in Changchun, including FAW-Volkswagen and FAW Toyota. On April 11, Sun Jian, director of the Department of Industry and Information Technology of Jilin Province, said that China FAW has fully resumed work today, while the first batch of 47 parts and components companies are resuming work in an orderly manner. In other words, China's FAW's five major vehicle plants in Changchun stopped production for nearly a month.
On April 9, NIO Motor (NYSE: NIO; 9866. HK) said that due to the impact of the epidemic, the company's supply chain partners in Jilin, Shanghai, Jiangsu and other places have stopped production one after another, and have not yet recovered. Affected by this, WEILAI's vehicle production has been suspended.
In this regard, Li Bin, founder, chairman and CEO of Weilai Automobile, said: "A car without a part can not be produced. Affected by the epidemic in Changchun and Hebei, we had parts and components in mid-March, and we barely supported it until last week. Recently, there have been epidemics in Shanghai, Jiangsu and other places, and many partners cannot supply goods and can only suspend production. ”
▲ NIO Automobile Plant
In the important town of China's automobile industry, many car companies in Shanghai have also stopped production or entered a closed-loop production model. Among them, Tesla (NASDAQ: TSLA) stopped production for two days on March 16 and 17, and said on March 28 that it would suspend production at the Shanghai Gigafactory, and has not announced the resumption of production so far. Car companies such as SAIC Volkswagen and SAIC Passenger Car have entered a closed-loop production model.
Guosheng Securities said in the research report that the epidemic in many places in China has rebounded, domestic factories such as Volkswagen and Tesla have stopped production, and the production and logistics efficiency of companies that have not stopped production have also been affected to varying degrees, the cost of raw materials is still at a high level, and the pressure on the operation of the industrial chain is large. At present, the impact will continue until April, waiting for the general environment to improve.