Economic Observer Zhou Xin/Text Entering July, a number of car companies announced their sales in June 2024 and the first half of the year, and their sales of new energy vehicles and overseas markets performed well. Among them, Chery's sales of new energy vehicles in the first half of the year increased by 1.8 times year-on-year, BYD's overseas sales in the first half of the year were close to the total sales of last year, and Geely Automobile not only completed the half-year sales target, but also raised the annual sales target by 100,000 to 2 million units, benefiting from the increase in sales of new energy vehicles.
However, under the current situation of industry involution, the annual sales target completion rate of many car companies is not good. Among them, the annual sales target completion rate of traditional car companies is generally less than 40%, and the new power car companies are generally only about 30%. At the same time, the pressure of car companies has also been further transmitted to the dealer level, with less than half of dealers completing their sales targets, and facing pressure from high inventories and poor profitability.
Sales of new energy vehicles soared
At the end of May, after the Ministry of Finance issued the "old for new" policy, the production and sales of new energy vehicles have increased significantly. The Federation of Passenger Cars predicts that the retail sales of new energy vehicles are expected to reach 860,000 units in June, an increase of 6.9% month-on-month, and the penetration rate of new energy may reach 49.1%.
Under the boost of policies, the sales of new energy vehicles of various car companies performed well in the first half of the year. Changan Automobile sold 64,000 new energy vehicles in June, a year-on-year increase of more than 61%, and in the first half of the year, the sales of self-owned brand new energy vehicles were 299,000, a year-on-year increase of more than 69%.
Geely Holdings' sales of new energy vehicles (including Geely, Lynk & Co, and Zeekr) in June were 66,000, a year-on-year increase of more than 88%, and the total sales of new energy vehicles from January to June reached 320,000 units, a year-on-year increase of 117%, accounting for nearly 40% of total sales.
Chery Group sold 45,000 new energy vehicles in June, a year-on-year increase of 230.6%, and the cumulative sales from January to June were 181,000 units, a year-on-year increase of 1.8 times.
In contrast, Great Wall Motors still has room for improvement in new energy, although its new energy vehicles in the first half of the year achieved a year-on-year growth of 41.99%, but the sales of 132,000 units are still low among the above-mentioned car companies. SAIC Motor sold more than 93,000 new energy vehicles in June, and sold more than 460,000 units in the first half of the year, a year-on-year increase of 24%, the smallest growth rate among the above-mentioned car companies.
New energy vehicles will continue to be an important incremental point for car companies. The China Association of Automobile Manufacturers predicts that the sales of new energy vehicles will reach 11.5 million units in 2024, a year-on-year increase of 20%. SPDB International expects the new energy penetration rate to reach 52.4% by 2026.
Overseas sales are remarkable
The EU is about to impose tariffs on Chinese electric vehicles, and Chinese car companies' exports to Europe ushered in a situation of both volume and price decline in May, but throughout the first half of the year, the overseas sales of car companies are still remarkable.
Great Wall Motor's cumulative overseas sales in the first half of the year exceeded 200,000 units, a year-on-year increase of 62.59%, continuing the momentum of overseas exports in the past.
Geely Automobile Group exported 35,000 vehicles in June, a year-on-year increase of more than 61%, and the cumulative sales from January to June reached 197,000 units, a year-on-year increase of more than 67%. In the first half of the year, the Geely brand accelerated its deep cultivation in Central and South America, and the Zeekr brand accelerated the implementation of the Southeast Asia strategy.
In the first half of the year, BYD's overseas sales reached 203,400 units, which was close to the 243,000 overseas sales of last year. BYD's overseas sales target is 500,000 units in 2024 and 1 million units next year, and it plans to double in the next three years.
Chery Group exported 97,000 units in June, up 22.7% y/y, and exported 532,000 vehicles in the first half of the year, up 29.4% y/y. In the first half of the year, Chery Group's overseas sales were close to the sum of Geely, Great Wall and BYD.
It is worth mentioning that SAIC Motor has not yet announced its overseas sales volume. In the EU's action to impose tariffs on Chinese electric vehicles, SAIC was subject to a 38.1% cap tariff. In 2023, SAIC Motor sold 1.208 million units overseas, of which more than 300,000 units were sold in Europe, accounting for a quarter of the total sales.
The target completion rate of car companies is generally less than 40%.
New energy vehicles and overseas markets have become important growth points for car companies, but in the case of the downturn of the auto market and the intensification of involution, many car companies still cannot escape the reality of low target completion rate.
In the first half of the year, Great Wall Motor's sales reached 559,700 units, a year-on-year increase of 7.79%, and only 29% of the KPI was completed according to the annual sales target of 1.9 million units. BYD's sales volume was 1.613 million units, a year-on-year increase of 28.46%, and its completion rate was 44.8% based on the annual sales target of 3.6 million units.
Chery Holding Group sold 200,400 units in June, a year-on-year increase of 38%, and the cumulative sales from January to June were 1,100,600 units, a year-on-year increase of 48.4%, and the semi-annual sales exceeded one million units for the first time. However, if we look at the annual target of 2.3 million units (Chery Automobile expects the sales growth rate in 2024 to exceed the industry in 2023 by 10-20 percentage points), the completion rate is only 43%.
Changan Automobile's 2024 target is 2.8 million units, and the total sales volume for the first half of the year has not yet been announced, but considering the cumulative sales volume of about 1.11 million units as of May, Changan Automobile's annual target completion rate is likely to be no more than 50%.
Geely Automobile, with sales of 955,000 units in the first half of the year, a year-on-year increase of 41%, and 50.3% of the annual sales target. Geely Automobile announced that it has decided to raise its full-year sales target by about 5% from 1.9 million units to 2 million units in view of the strong sales performance.
Compared with traditional car companies, the target completion rate of new forces is lower, generally only about 30%.
In the first half of the year, Li Auto delivered 189,000 vehicles, with a completion rate of about 34% based on its lowered target of 560,000 units. Xpeng delivered 520,000 units, a year-on-year increase of 26%, and completed 33.2% of the annual 280,000 units; NIO delivered 87,000 vehicles, up 60.2% year-on-year, and achieved 38% of the 230,000 target. Leapmotor sold 86,700 units, 34.7% of the target of 250,000 units; Nezha Automobile sold 53,800 units, 17.9% of the annual target of 300,000 units.
In the first half of the year, Huawei Hongmeng delivered 194,000 vehicles, with a sales target completion rate of 33.5%; ZEEKR delivered 88,000 vehicles, with a completion rate of 38.2%; VOYAH sold 30,000 vehicles, with a completion rate of 30.4%; Zhiji Automobile sold 23,000 units, with a completion rate of 19.4%; GAC Aion sold 136,000 units, with a completion rate of 19.4%; The cumulative sales volume of Deep Blue Automobile is 84,000 units, and the completion rate is 30%.
The completion rate of dealer KPIs is less than 20%.
The low completion rate of sales targets of car companies is also transmitted to the KPI completion rate of dealers. According to the "China Auto Dealer Inventory Warning Index Survey" released by the China Automobile Dealers Association a few days ago, 18.4% of dealers completed the sales task in the first half of the year, 34.8% of the dealers' task completion rate exceeded 80%, and 13.5% of the dealers completed the rate less than 50%.
For the auto market in the second half of the year, most dealers believe that the terminal sales will face downward pressure this year, 22.0% of dealers believe that it will be basically flat, and 17.7% of dealers believe that the sales volume will decline by more than 15% in the second half of the year.
"In order to spread the volume and complete the sales target, the car companies are seriously pressurized, resulting in huge pressure on our dealers and a tight capital chain", including GAC Toyota, Changan Automobile and other brand dealers recently told the Economic Observer, "The auto market as a whole is not optimistic, and it feels more difficult than last year." ”
According to the data of the Circulation Association, the inventory warning index of China's auto dealers in June was 62.3%, up 8.3% year-on-year and 4.1% month-on-month, much higher than the 50% inventory boom and bust line, and the dealers' inventory pressure was high.
With high inventories and low target completion rates, dealers' profitability is getting worse.
"The involution of the industry is still intensifying, and under the influence of various factors such as inverted car prices and declining brand sales, auto dealers are facing tremendous pressure on their business operations, and anxiety continues to spread." Liu Yingzi, president of the Automobile Dealers Chamber of Commerce of the All-China Federation of Industry and Commerce, said.
In the "2024 Top 100 Chinese Auto Dealer Groups" released by the China Automobile Dealers Association, Guanghui Automobile ranked first in the industry in terms of total passenger car sales and second in terms of operating income among major dealer groups. However, the market value of Guanghui Automobile has shrunk by more than 120 billion yuan, and its share price has fallen by nearly 95%, facing a delisting crisis.
The All-China Federation of Industry and Commerce Automobile Dealers Chamber of Commerce released the "2023 Survey Report on Automobile Dealers' Satisfaction with Manufacturers and the Survival Status of Automobile Dealers", pointing out that in 2023, the overall gross profit margin of 4S stores will be 4.99%, and the overall profit margin of the industry will be low, and the gross profit margin of new car sales will be GP1 (vehicle gross profit margin) will be -12.69%, GP2 (vehicle gross profit margin including manufacturer rebates) will be -2.66%, and GP3 (including derivative business) will be 1.74%, which is significantly worse than the previous year.