Cheng Xiaodong: Analysis of Price Trends and Characteristics of Automobile Market in Recent Years

In recent years, the rapid development of China's auto industry, the rapid growth of private car purchases, production and sales repeatedly hit a record high, the overall price remained steady down in the trend. At present, China's economy is in a critical period of sustained development. It is of great significance to study the characteristics of price changes in the automobile market, to grasp the rules of market operations, to make scientific and effective macro-control, to guide consumers in rational consumption, and to maintain a steady and rapid development of the automotive market.

I. Basic conditions and characteristics of automobile prices in recent years Since the accession to the WTO, the domestic automobile market has achieved a “blowout” development. The production and sales have maintained a growth rate of one million vehicles for several consecutive years and have quickly become one of the world's most advanced. With the gradual opening of the market, a large number of foreign-funded enterprises are influx, and the market competition is becoming increasingly fierce. The auto prices have continued to decline steadily under the influence of internal factors such as increasing supply, upgrading of product technology, and decreasing costs.

From 2001 to 2004, the annual decline in domestic car prices was close to 8%, and continuous price cuts made the automotive products begin to enter ordinary people's families quickly before and after 2003. From 2004 to 2005, as the base of production and sales continued to expand, the market growth rate fell from 35% in the previous period to less than 15%, and the vehicle prices have been declining year after year. As a result, the profit of bicycles has decreased, and the decline has begun to slow.

From 2006 to 2009, automobile prices decreased by 2.14%, 2.86%, 1.42%, and 0.06% respectively compared with the previous year. In 2010, automobile prices rose by 0.39% from the previous year. In 2011, they returned to a declining trend, a decrease of 1.14%. Declined by 5.01%, the decline has slowed down significantly since the entry into the WTO. Passenger car prices fell by 4.11%, 3.61%, 1.74%, 2.84%, 1.64%, and 2.59% respectively over the previous year in 2006-2011, a cumulative decrease of 11.84% compared to 2006. It is not difficult to see that the passenger car market is still pulling The main driving force for the overall decline in car prices, but the decline has also been more significant than before 2004, the average annual decline has dropped to about 2%.

Generally speaking, since the 21st century, China's auto industry and its prices have generally exhibited the characteristic of "one lift and one drop." On the one hand, as the national economy continues to improve and industrial policies are moderately adjusted, the auto market has achieved unprecedented growth. The average annual growth rate has remained basically above double digits. In 2009, under the external environment of the global auto market downturn, the domestic market is even more With a growth rate of more than 40%, it surpassed the United States for the first time in the world. On the other hand, automobile prices have continued to expand and escalate, and competition has intensified with the expansion of market size. They have basically continued to unilaterally decline. After undergoing a rapid decline in the early years of accession, the price decline has gradually narrowed in recent years.

Since this year's national auto market was affected by the inertia of the market downturn last year, production and sales continued to show a weak trend, and prices continued to decline. In the first half of the year, domestic auto prices have fallen by 0.71% from the end of last year, of which, the month-on-month ratio fell by 0.53% in May, the largest drop in a single month since the beginning of the year, and the average price in each month of the first half of the year was down by 1.07 percentage points from the same period of last year. Among them, passenger car is still the main driving force for driving down prices. From January to June, the cumulative price of passenger cars has fallen by 1.06% from the end of last year, and the monthly average price has decreased by 1.63% compared with the same period of last year. The prices of commercial vehicles have generally declined slightly. In the first half of the year, the cumulative price of commercial vehicles has fallen by 0.30% from the end of last year, and the average monthly price has dropped by 0.37% from the same period of last year.

In addition, imported cars have fallen more than this year, and prices have continued to fall. As imported cars continued to sell well in the second half of last year, high-end cars were queued up at the end of the year and the price increase for individual models amounted to several hundred thousand yuan, enabling dealers to earn profits. Since this year, the overall auto market has been in a weak state, consumer spending mentality has weakened, and the price reduction of imported cars has become the main means for dealers to seize market share. In the first half of the year, the cumulative price of imported automobiles decreased by 0.83% from the end of last year, and the average monthly price fell by 2.94% from the same period of last year. Among them, the price of imported cars decreased by 1.87% from the end of last year, and the average monthly price dropped by 4.58% from the same period of last year. The cumulative price of imported SUVs rose slightly by 0.19% from the end of last year, and the monthly average price dropped by 1.26% compared with the same period of last year.

II. Analysis of reasons for changes in market prices In recent years, the automobile industry has played an important role in the national economy and social development. As a typical capital-intensive industry, its industry chain is long and highly connected, and it has an upstream and downstream machinery, metallurgy, and electronics. Rubber, petrochemical and many other related industries are strong, and their price changes are not only determined by the relationship between supply and demand, consumer psychology, but also affected by many complex factors such as production and operation management, financial consumer credit, changes in energy prices, logistics transportation, and emergencies. . In a comprehensive judgment, the changes in car prices in recent years are mainly affected by the following factors:

(I) Market supply is faster than actual demand growth, and competition continues to increase, driving automobile prices to continue to decline. The domestic market has continued to upgrade from small to large production and sales for the past 10 years. Due to the large demand for automotive production funds and the relatively long production cycle, it reflects the changes in the market. Relatively lagging behind, market production and sales in 2000-2007 saw a step-by-step growth every two years. The growth rate of production and sales in 2000-2001 was about 13%. The growth rate of production and sales in 2002-2003 was 39%, 37%, and 37% respectively. , 35%, 2004-2005 growth rate of production and sales fell to 14%, 15% and 13%, respectively, 14%, production and sales growth in 2006-2007 once again rose to 27%, 25% and 22%, 22%, 2008 The year was affected by unexpected factors such as the rising cost of steel price increase and the slowdown in demand for financial crisis. The growth rate of production and sales was less than two for the first time, falling to 5.21% and 6.70%, respectively, breaking the previous year's operating pattern and calling back in one year. In 2009, The policy stimulus stimulated growth in production and sales to reach record highs of 48% and 46%, respectively. In 2010, the growth rate of both production and sales continued to exceed 30%. In 2011, after two consecutive years of rapid growth, immediate consumer demand quickly released Under the influence of a series of encouraging policies gradually withdraw from other factors, sales growth plunged to 0.84% ​​and 2.45%, showing an overall market supply slightly larger than the demand of buyers in the market. In recent years, with the continuous expansion of the market, nearly 100 new models have been put on the market every year. The large number of new vehicles listed at low prices has further aggravated the market competition between new and old models, resulting in a decline in inventory prices. At this stage, the relationship between supply and demand is still the most important factor in determining the price of automobiles. The supply of slightly looser supply is the main feature of China's auto market in recent years. From the perspective of market development, any mature market that continues to develop rapidly will be accompanied by a modest overcapacity. Through market competition, the survival of the fittest will ensure survival of the market. The current domestic production and sales ratio is relatively low, basically within the scope of reasonable control.

(II) Profit growth of enterprises, upgrading of industrial technologies, and expansion of production scales drive down production costs, and provide space for falling automobile prices. In recent years under the guidance of industrial policies, the merger and reorganization of auto companies and the overall listing process have been accelerated, resulting in the continuous injection of high-quality assets of enterprises. The structure has been continuously optimized, and the production, operation and management, and profitability have increased dramatically. In 2007, the profits of the automotive industry exceeded RMB 100 billion for the first time. The profits of the auto industry have remained at a high level since the financial crisis in 2008. The year 2008-2009 The accumulative total profits of enterprises above designated size in the industry were 130.955 billion yuan and 19.887 billion yuan respectively. Total accumulated profits for 2010-2011 were 331.4 billion yuan and 420.3 billion yuan, respectively, a year-on-year increase of 66.8% and 15.99% respectively. With the growth of corporate profits, increased investment in independent research and development and product innovation, the company’s large-scale production capacity has been continuously improved, operating costs and financial costs have been gradually reduced, which has led to a reduction in the cost of production of bicycles, providing room for the decline in automobile prices.

(III) Significant increase in residents' income, strong ability to purchase and pay, and effective release of demand played an important basic role in the rapid development of the automobile industry and maintaining a steady decline in vehicle prices. Along with the sound and rapid development of the national economy, industrialization and urbanization The process of progress has been steadily progressing, and the living standards of urban and rural residents have increased substantially, which has promoted the upgrading of the consumption structure. According to statistics, from 2001 to 2008, the per capita net income of rural households increased from 2,366 yuan in 2001 to 4,761 yuan in 2008. After deducting price factors, the average annual growth rate was 6.4%, and the per-capita living expenditures had doubled compared to 2001. Reached 3361 yuan. The per capita disposable income of urban households rose from 6,860 yuan to 15,781 yuan. After deducting the price factor, the average annual growth rate was 9.9%. In 2011, the per capita net income of rural residents increased to 6,977 yuan. Excluding price factors, the actual growth was as high as 11.4%. The Engel's coefficient decreased from 46.9% in the mid-1990s to about 40% in 2011. It has reached the 30% to 40% level of affluence proposed by the UN Food and Agriculture Organization, and the focus of consumption is also apparent from food demand to wear and use. Other aspects transfer. In recent years, the proportion of domestic private car purchases has jumped from 50% at the beginning of this century to more than 80%, and it has become the main force driving automobile consumption. The increase in income of residents and the narrowing of the gap between urban and rural areas have stimulated the release of car demand in second- and third-tier cities. In 2009, with the encouragement of “automobiles going to the countryside” and tax incentives, the second and third-tier cities’ automobile consumption exceeded that of first-tier cities for the first time. Due to the large population of the country, nearly 300 million people in second-tier and third-tier cities currently have auto purchase capabilities. A large number of potential demands have yet to be released, and at the present stage, the number of vehicles per 1,000 people in China is about 50, which is a huge gap between the 9,000, 50,000, 550, and 500 motor-driven countries such as the United States, Germany, Japan, and France, and the world The average level of 1,000 people is also far away from the 160, the world ranking is only more than 80, the market is still vast space for development.

(IV) The world auto industry has gradually shifted its focus to the east and the domestic market will usher in long-term stable development. A sudden financial crisis in the second half of 2008 has swept the world and brought heavy blows to several major auto markets in North America, Europe and Japan. The three auto giants collapsed under the impact of the financial turmoil and relied on government assistance, bankruptcy protection, sales of assets, and staff reductions. Toyota's annual domestic sales fell by 5% to 2.15 million units. Overseas sales fell by 4% to 6.82 million units. It forced the closure of some factories to reduce corporate expenses and maintain operations. Renault Motors France also suffered heavy losses in 2008. Its sales in emerging markets such as North Africa, Romania and Russia plummeted by 41%, and global sales fell by more than 4%. However, the Chinese auto market maintained its growth rate of nearly 7% under the financial crisis raid and became the world's largest auto consumption market.

Judging from the experience of the development of the world’s auto industry, major changes will occur after each major economic crisis. After the oil crisis in the 1970s, Japan’s Toyota Motor Corporation quickly became one of the world’s automotive powerhouses with its unique lean production model, safe and high-quality energy-saving automotive products, and eventually formed a 6-large, 3-small, 6 3 automotive industry structure (6 major General Motors [Fiat-Suzuki-Fuji Heavy Industries-Isuzu Group], Ford [Mazda-Volvo Car Group], Daimler-Chrysler [Mitsubishi Group], Toyota [Daifa-Hino Group], Volkswagen Group, Renault [Nissan-Samsung Group ], 3 Honda, Peugeot-Citroen (PSA) and BMW). The international financial crisis triggered by the US subprime loans has caused the global economy to decline, the auto market has drastically contracted, and the prices of cars have fallen, making it difficult for many companies to operate. In 2009, the world’s major trading nations experienced a weak economic recovery. The overall performance of the automobile industry was sluggish. Sales volume in major world markets except China and India fell by about 15 million vehicles compared to 2008. German masses sold more in China than their local counterparts. It reached 13.64 million vehicles, accounting for 22% of the world's sales. It has grown by more than 4 million units over 2008, a year-on-year growth rate of 46%. One car for every 4 cars sold in the world comes from the Chinese market, emerging markets such as China, India and Russia. The rapid rise of the world quietly changed the world auto industry structure and gradually shifted its focus to the east.

Therefore, the automobile industry is an important pillar industry of China's national economy. The macro industrial policy that the country continues to encourage to support automobile production and sales during the 12th Five-Year Plan period will not change. It is expected that the auto consumption demand will remain stable in the next 5 to 10 years. With the momentum of growth, car prices will maintain the basic trend of steady decline in the strong support of demand.

Third, several suggestions for the development of the market in the later period Since the beginning of the 21st century, the rapid development of China's automobile industry has resulted in the production and supporting systems for various types of vehicles and components of various varieties and series. The degree of industrial concentration has been continuously improved and the level of product technology has increased. Obviously promoted, it has become a world leader in automobile production and consumption. However, the conspicuous contradictions in the industrial structure, low technical level, weak self-development capabilities, consumer policies still need to be improved, and constraints such as energy, environmental protection, and urban traffic are increasingly evident.

In order to further implement the Central Party Committee, the State Council to ensure growth, structural adjustment, and benefit people's livelihood, stabilize automobile consumption, speed up industrial restructuring, and promote the overall requirements for sustained, healthy, and stable development of China's auto industry. At present, government supervisory departments and production enterprises should work together to do a better job.

First, we must accelerate the optimization and upgrading of industrial structure. On the one hand, it will intensify efforts to implement industrial restructuring and consolidate the market position of the enterprise with a group development approach. On the other hand, it will do a good job of upgrading products, increase the awareness of independent brands, increase the development of proprietary intellectual property products, and increase the localization rate. Various ways to reduce costs, so as to enhance the core competitiveness of products and enterprises in the market competition.

Second, we must further increase the scale and level of auto consumer credit. At present, the development of China's auto consumption credit is slow, accounting for about 10% of the total consumption, and it is far from the level of 80% of the developed countries in western developed countries. The relevant government departments should speed up the development of auto financial service companies and study and solve the problem of interbank borrowing. Issues such as the issuance of bonds and other refinancing channels can be borrowed from the successful experience of foreign countries, led by the government, coordinated by various departments, and promote the cooperation between auto companies and commercial banks in establishing auto consumer credit institutions, giving full play to their respective advantages to reduce consumer credit risks and ensuring the stability of financial order. And security.

Third, we must focus on solving the bottlenecks that restrict traffic congestion and energy shortages that limit the growth of auto consumption. With the rapid growth of car ownership, on the one hand, urban road traffic construction is difficult to meet the needs of rapid growth in automobile consumption. The problem of road congestion caused by difficult travel and parking difficulties has become increasingly serious and has become a common social problem for large and medium-sized cities. To this end, relevant departments and urban governments in various localities should attach great importance to the issue and make it a priority to solve the problem of urban road travel. Under the premise of doing a good job of overall planning, we will take preventive measures to prevent traffic congestion, increase the intensity of urban road traffic management, and strengthen the construction and management of parking facilities. At the same time, we will actively develop public transport, rail transit, and intelligent transportation systems to improve urban traffic capacity. It can gradually adopt measures such as increasing bus lines, reducing bus fares, advocating residents to reduce driving travel, implementing the environmental protection concept of public transportation priority, and working hard to create favorable conditions for the development of the automobile industry and the growth of automobile consumption. On the other hand, energy consumption has been increasing and pressure on oil supplies has risen sharply. According to the International Energy Agency, China’s per capita oil resources and per capita oil production are only 18.3% and 21.4% of the world’s average, and per capita oil and gas resources are relatively poor. At present, China’s automobile fuel consumption has accounted for 75.5% of the entire gasoline consumption. The average annual fuel consumption of a vehicle is 2.28 tons, which is much higher than the average level of 1.1 tons for a Japanese car. Energy-saving and emission-reduction work has become imminent. According to the "National Mineral Resources Planning (2008-2015)" and "Energy Blue Book," it is predicted that by 2020, China's foreign oil dependence will exceed 60%, and the contradiction of energy shortage will persist for a long time. Therefore, we should further improve the management system and operating mechanism of oil reserves, increase the distribution of China's oil import regions, and promote the diversification of oil import channels. At the same time, it encourages automobile manufacturers to innovate in science and technology, and advocates companies to research and develop new energy vehicles with low energy consumption, low pollution, and low emissions, focusing on the research and promotion of plug-in hybrid and pure electric vehicle technologies and the development of industrialization to reduce air pollution. Ease energy consumption needs and build a sustainable society for automobiles.

In addition, we should continue to implement the export strategy for automotive products, speed up the transformation of foreign trade export growth mode, strengthen the company's core technology to improve international competitiveness, and increase international market development efforts. The company will provide necessary financial support and appropriate tilt to quality consulting and certification, and actively help companies develop overseas quality certification. Financial institutions actively provide financing facilities on the premise of meeting market principles. Encourage competent companies to acquire foreign companies, build overseas production bases, and give corresponding support in policies to promote the sustained and healthy development of China's auto and auto parts exports.

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