In May, the automobile market continued to go downhill and the automobile companies promoted sales to remove inventory.

category:Finance
 In May, the automobile market continued to go downhill and the automobile companies promoted sales to remove inventory.


Sales of several auto companies fell by more than two digits

According to the sales performance in May, the sales of many automobile enterprises fell sharply, Changan Group dropped 34.7% in May, SAIC Group dropped more than 15%, Dongfeng Group dropped more than 10%, Geely Automobile dropped nearly 30%, Great Wall Automobile stopped rising and declined, and sales fell by double digits in May.

According to the data released by the China Automobile Association, the top 10 automobile sales companies in the first May of this year were SAIC, Dongfeng, FAW, Beiqi, Guangzhou Automobile, Changan, Geely, Great Wall, Huachen and Chery. Compared with the same period last year, sales of Great Wall and Huachen increased slightly, while other enterprises showed a downward trend, with Changan and SAIC leading the decline. From January to May, these ten enterprises sold 9.152 million vehicles, accounting for 89.2% of the total automobile sales.

The overall performance of Japanese cars is still good, especially Honda, which maintains double-digit year-on-year growth. Dongfeng Hondas sales grew by 40.9% year-on-year in May and 25.3% year-on-year in May. Guangzhou Auto Hondas sales grew 25.1% year-on-year in May and 18.3% year-on-year in May. Toyota also continued to grow, but the growth rate was not large. Sales of Nissan, Mitsubishi and Mazda declined.

As far as CAAC is concerned, from the completion of production and marketing data in May, the overall downward trend of production and marketing in the industry has not been effectively alleviated. On the one hand, consumption momentum has not been effectively improved, on the other hand, production enterprises take the initiative to slow down the pace of production and marketing, and reduce the pressure of the terminal market. However, due to the downward pressure of macro-economy and the early implementation of the Sixth Emission Standard in some regions, the production and marketing of automobiles are still at a low level. In the second half of the year, with the increasing number of vehicles meeting the Sixth National Standard and the continuing effect of a series of policies and measures such as tax reduction and fee reduction, especially in early June, the National Development and Reform Commission, the Ministry of Ecological Environment and the Ministry of Commerce jointly announced the Implementation Plan for Promoting the Renewal and Upgrading of Key Consumer Goods and the Smooth Recycling of Resources (2019-2020), which has brought relatively positive effects to the passenger car market. Production and sales of new energy vehicles will also continue to grow rapidly.

Removing inventory leads to price disorder

Due to the downturn in the car market and the imminent implementation of the Sixth National Standard in some areas, dealers are intensifying efforts to clean up inventory. According to the data released by the Federation, in May, the inventory of manufacturers dropped by 69,000 units and that of channels dropped by 84,000 units. The main reason for the great decline of channel inventory is that in the face of the sudden regional policy implemented by Guoliu, manufacturers relieve the pressure of distributors to purchase in time, and realize the general mobilization of people to speed up the digestion of inventory. Retail sales performance improved in May due to increased inventory clearance. Its narrow passenger car retail sales dropped 12.5% year on year, but increased by 4.8% annually compared with April, which was the strongest performance in May.

According to a survey released by China Automobile Circulation Association, the comprehensive inventory coefficient of dealers in May was 1.65, up 4% year on year, but down 18% year on year. China Automobile Circulation Association said that nearly two-thirds of the countrys sales will be implemented on July 1 in advance of the Sixth National Emission Standard, which will be centrally cleared in May. However, the inventory coefficients in areas without the implementation of the Sixth National Standard are much higher than those in areas with the implementation of the Sixth National Standard in advance. Some distributors in areas with the implementation of the Sixth National Standard will further increase the inventory in areas without the implementation of the Sixth National Standard by means of preferential promotion and transshipment to other areas. In addition, due to increased clearance pressure, dealers are more cautious to enter the car.

Because of the slow progress of the implementation of the Sixth National Standard, the short time of inventory clearance and the heavy task, dealers have a greater effort to clean up inventory. Due to the market downturn and the influence of the current switching of five countries and six countries in the market, various brand promotion methods and different brand propaganda techniques have caused some problems to the consumer judgment and decision-making of end-users, and some potential consumers have become more cautious. Cui Dongshu, secretary-general of the Federation, said that this would further trigger price instability due to the radical policies of the six local countries, which would not be conducive to the increase in vehicle sales in June.

At present, local and central governments have issued some policies to stimulate the car market. From June this year to 2020, Shenzhen will increase the incremental indicators of ordinary cars by 40,000 annually, while Guangzhou will increase the incremental indicators of 100,000 small and medium-sized buses. In addition, the Implementing Plan for Promoting the Renewal and Upgrading of Key Consumer Goods and Unobstructing the Recycling of Resources (2019-2020) issued by the three ministries and commissions has adjusted the automobile consumption policy, requiring that all localities should not impose restrictions on new energy vehicles and purchase restrictions, and those already implemented should be abolished.