National Five and National Sixth Switching Time: The Relation of Automobile Industry Chain Should Be Straightened out

 National Five and National Sixth Switching Time: The Relation of Automobile Industry Chain Should Be Straightened out

China Automobile Circulation Association also put forward Report and Suggestions on the Impact of Implementing the Sixth National Emission Standard in advance on the Automobile Market to the Ministry of Ecological Environment, Ministry of Industry and Information, Ministry of Commerce, Ministry of Public Security and other ministries and commissions on May 27. It is hoped that the switching areas will set aside a transitional period for the Sixth National Emission Standard switching, and it is suggested that automobile manufacturers should stop selling Five-Year cars to u3002 Last Friday (May 31), the Department of Atmospheric Governance of the Environmental Protection Department invited the China Automobile Circulation Association to exchange views and reached a consensus that manufacturers should continue to supply the five models of the country in accordance with the state regulations; the circulation of the five cars can be transferred to places where the six standards have not yet been implemented. On June 3, Xiao Zhengsan, Vice President and Secretary-General of China Automobile Circulation Association, told reporters on 21st century economic reports.

Prior to this, the Henan Automobile Industry Chamber of Commerce wrote to the Henan Federation of Industry and Commerce and the relevant authorities, strongly appealing to Henan to suspend the implementation of the Sixth National Emission Standard. It is difficult for automobile dealers to sell and the stock of the Five National Vehicles is large. It is indeed impossible to digest the Five National Emission Standards by July 1, which will cause many automobile dealers to close down in the second half of the year.

There are some dealers with a lot of stock of Five-Car, which is difficult to clear in a short time. Everyone is a little helpless. Some 4S stores do have the risk of closing down. On June 3, a distributor in Jiangsu told 21st Century economic reporters.

In fact, the implementation of the Sixth National Emission Standard is not a temporary idea. As early as 2016, opinions have been publicly solicited and national standards have been completed. The plan at that time was to start implementation in 2020. The Three-year Action Plan for Winning the Blue Sky Defense War issued by the State Council in July 2018 clearly requires some regions to implement the standards ahead of schedule on July 1 this year.

Why are some distributors still caught off guard when the policy is approaching its concrete landing?

On July 3, 2018, the State Council issued the Three-year Action Plan for Winning the Blue Sky Defense War (hereinafter referred to as the Action Plan), which states that from July 1, 2019, the Sixth National Emission Standard will be implemented in advance in key areas with serious atmospheric pollution, such as Beijing, Tianjin, Hebei and its surrounding areas, the Yangtze River Delta, Fenwei Plain and the Pearl River Delta and Chengdu-Chongqing areas.

It is not difficult to find that the areas that are prepared to implement the plan ahead of time are exactly the areas that the State Council explicitly requires to implement the Six National Standards ahead of time, except Hainan Province. Local governments implement the Sixth National Emission Standard in advance, which is in response to the requirements of the highest administrative organ of the state. As for the landing of the policy, all parties in the automotive industry chain actually have early warning.

Since the second half of last year, there has been a downturn in the automotive market, manufacturers have begun to pressure dealers. For some time, dealers have gone through the process of inventory removal. Implementing the Sixth National Standard, the pressure suddenly increased. On June 2, a dealer of a popular brand told reporters.

The situation of distributors in some regions and brands is more serious. A senior distributor group in East China told the 21st century economic reporter frankly: There is still a month to go, it is impossible to digest the stock of Guowu.

He told reporters that summer is the off-season of sales, according to the previous sales rate, Guowu inventory needs at least three months to fully digest. At the same time, due to the introduction of the Sixth National Standard, some consumers choose to hold money for purchase, and there are considerable doubts about the five models in the purchasing country, so the inventory clearance process will be extended.

The 21st Century Economic Reporter learned that FAW-Volkswagen, Guangzhou Automobile Honda, Dongfeng Nissan, Geely Automobile and other automotive companies had already implemented the policy of parallel sales of national five and six products as early as this year, and allocated more national six models to distributors in areas where the national six standards were implemented in advance, and no more national five models were supplied to the above-mentioned areas in April and May.

However, there is also a difference between product line replacement and dealers response to switching. Some car companies do issue delivery tasks to dealers, but some dealers do have early warning. The fast-responding distributors only take the six models from the auto companies, while some slow-responding distributors bring many five models to the auto companies, which creates the present situation. A senior automobile dealer group told reporters.

The number of mainstream brand Guowu models is controllable, and these brands are already ready for Guowu. At present, the situation is worse, mainly some self-owned brands with poor sales and slow technology conversion. The senior management of the above-mentioned dealer group told reporters.

However, within the independent brand, Changan Automobile, Great Wall Automobile, Geely Automobile and other head independent brand technology switching pace is faster, some sales decline is more serious in the hands of the joint venture brand Guowu inventory is more, but also has already realized the model switching.

The implementation area of the Sixth National Standard accounts for about 70% of our market. Guangzhou Automobile, including joint ventures and self-owned brands, has made preparations in advance and is now making efforts to go into stock. Guangzhou Auto has a small inventory and plans to digest part of it in June. The rest will be gradually digested by the end of the year in 30% of the Fifth National Market. In addition, we are also committed to upgrading technology to make Guo VI products more competitive and achieve timely conversion. On May 31, Zeng Qinghong, chairman of Guangzhou Automobile Group, said at the 2018 annual shareholdersmeeting of Guangzhou Automobile Group.

Contradictions between manufacturers intensified

From a quantitative point of view, there are a lot of Six National Cars that can provide market sales at present, and the supply side can resolve the problem of technology switching. According to the statistics of the motor vehicle emission monitoring center, as of May 30, 2019, a total of 87 enterprises have completed the disclosure of environmental protection information of light vehicle Guoliu by 1 950 vehicles of 36238,000 vehicles, all of which are Guoliub (except 6 vehicles of Guoliua).

Despite the stringent national 6B standard, the Ministry of Environmental Protection estimates that the upgrade cost of light gasoline vehicles is about 1200 yuan. This cost is not high, compared with the tens of thousands of yuan of terminal incentives on the market can be almost neglected.

However, there is still a big technological gap between automobile enterprises. For joint ventures that have already adapted to the stringent emission standards in Europe and the United States, the process of switching is relatively smooth, but the ability of technology switching of independent brands is weak. In addition, due to the decline in sales in Chinas automobile market last year, many automobile companies suffered from poor performance, invisibly adding a lot of costs.

From Guo 5 to Guo 6, it is a whole process of upgrading. Therefore, various parts need a series of upgrading operations. It is very difficult not only to make the engine press its working efficiency further, but also to improve the three-way catalytic converter when exhaust gas is discharged, and also to improve the electronic control unit of ECU and other components. Some people in the automotive industry told reporters.

Because of the immaturity of their own technology, the relevant core technology is in the hands of multinational parts giants. Many independent brand automobile companies need to seek the giants of multinational parts such as Bosch to purchase relevant parts and get technical support. This has also led to the lag of independent brands in technological upgrading compared with multinational automobile groups.

This exposes the problem of insufficient technology reserve and technology research and development prospects of independent brands, and the lack of core technology, leading to some independent brands can only be controlled by others, but also affect their competitiveness. The automobile industry said to reporters.

However, automobile companies have a higher pursuit of market share, and they are reluctant to reduce the time and quantity of new cars to market because of emission standards. As a result, some automobile companies also transferred the pressure to dealers, which also led to the current automobile circulation industry sales chaos.

Faced with the switchover of five countries and six countries, not only has the price chaos been formed, but the dealers are really helpless. We have to sell at a low price and do everything we can to clear the stock. Should it be a dilemma, whether to sell or not? It will only become worthless if the loss is serious and the stock is not overstocked. A car dealer told reporters.

In this case, there are three major contradictions in the automobile circulation industry: automobile production and marketing mode, market price inversion and excessive channels and outlets, which are becoming increasingly fierce. This is not due to the switching of G5 and G6, but in the current market environment, these contradictions are being amplified.

However, in the buyers market where supply exceeds demand, the risk and loss of price decline are borne by distributors, who digest inventory through price reduction. As a result, the purchase and sale prices continue to hang upside down. Price war has become a means of dealer market competition, which not only damages the competitiveness of manufacturersbrands, but also damages the orderly development of the automobile market.

According to the Survey of the Survival of Automobile Distributors in 2018 issued by China Automobile Circulation Association, the gross profit of new car dealers dropped from 5.5% in 2017 to 0.4% in 2018, and the loss of dealers increased from 11.4% in 2017 to 39.3%. In 2018, except for a few brands, the gross profit of new car dealers was generally negative, and the loss of new car dealers was further increased, and the vast number of dealers were facing unprecedented challenges. Pressure.

Host factories and distributors are the community of destiny, which is the right direction of development, not the current relationship between superiors and subordinates. At last, the automobile dealer said to the reporter.