At the beginning of 2007, the domestic automobile industry can be described as "a success story." First, auto stocks began to perform very well since the end of last year, with multiple stocks continuing to limit. A recent data from industry associations shows that the overall profit of China's auto industry reached a record high of 76.8 billion yuan last year, a 46% increase from 2005. What is more worth mentioning is that the domestic automobile industry also took advantage of this to get rid of the “two big circles†that have been formed for a long time. Using “good year†to describe the past year of 2006 should be just as appropriate.
Vicious circle 1: increase production can not increase income?
Although in recent years, the output of the Chinese auto industry has always maintained a rapid growth, the haze of “increasing production but not increasing revenue†has shrouded the entire industry. In 2005 and 2004, the profits of the auto industry fell by 24.3% and 5.2%, respectively. However, in 2006 this circle was finally put on a rest.
According to the latest statistics from the China Association of Automobile Manufacturers, China's auto production and sales were 2,279.7,700 and 7,271,600, respectively, which represented a year-on-year increase of 27.32% and 25.13%, of which production and sales of passenger cars were 5,231,100 and 5,176,000, respectively, which represented a year-on-year increase. 32.76% and 30.02%. In terms of profits, the overall profit of China's auto industry (including entire vehicles, engines, auto parts, and motorcycles) reached 76.8 billion yuan last year, an increase of 46% from 2005. Compared with the growth rate of car sales of about 30%, 46% of the profit growth will increase sales far beyond. Last year, China had become the world’s second largest automobile consumer after the United States and the world’s third largest automobile producer.
Zhang Xiaoyu, vice president of the China Federation of Machinery Industry, said with full confidence that the first increase in profits in 2006 exceeded the increase in output is an important turning point and major breakthrough in the development of the Chinese automotive industry. He also revealed that 14 backbone automotive companies realized a profit of 33 billion yuan, a growth rate of 48%, which is higher than the average growth rate of the industry. The significant increase in profits was due to the optimization of the product structure of the automotive industry.
In 2007, the strong growth momentum of car sales did not diminish. According to the latest data from the National Passenger Car Information Association, in January this year, the total domestic sales of passenger cars, including cars and SUVs, reached 543,551 vehicles, a year-on-year increase of 24.64%. This seems to indicate that in 2007, it will be China again. Another "good year" for the automotive industry. Some organizations and people in the industry have also made optimistic estimates. It is expected that China’s auto sales will exceed the 8 million mark this year, at least 15% compared with last year, and the vehicle price will remain at a relatively stable level.
Circle 2: Private car than bus?
Last year, the domestic automobile industry not only achieved rapid growth in sales and profits, but also showed a healthy development. At the same time, it also achieved a simultaneous increase in the profits of commercial vehicles and passenger vehicles, and private car consumption was a substitute for bus consumption. The main driver of profit growth in the domestic automotive industry.
According to Xu Changming, director of the Information Resources Development Department of the National Information Center, from 2002 to 2005, the situation in domestic car sales shows that passenger cars and commercial vehicles have alternately increased. Last year, domestic car sales not only reversed this turmoil, but also There has been a general recovery in the profits of various industries such as vehicles, modified cars, engines, and parts and components. From the situation in 2006, the main driving factor for the development of the passenger car market is the increasing proportion of private car purchases.
According to authoritative statistics, the proportion of domestic private car consumption has increased from 58% in 2001 to around 80% now, and the proportion of private car consumption has increased substantially. In 2006, domestic sales of more than 7 million domestic and imported cars, of which 60% were private purchases. As of the end of last year, China’s car ownership was approximately 38 million, of which privately-owned vehicles exceeded 20 million for the first time, reaching nearly 22 million vehicles. Private cars already account for about 60% of the country's car ownership, which indicates that China's auto consumption has entered a new stage of development that focuses on private consumption.
In 2006, China became the second largest new car market in the world after the United States. According to industry insiders, the current number of cars in China is less than 30 vehicles per 1,000 people, which is about 60 people, which is far from the world’s average of 120 vehicles per 1,000 people. The development potential of the Chinese automobile market is huge, especially the consumption of private cars. The next 20 years will continue to grow rapidly.
Director Xu Changming believes that as long as GDP maintains a rapid growth in 2007, demand for passenger cars can keep rising. The domestic demand for passenger cars this year is 5.15 million, an increase of 20%; the total demand for automobiles is about 8 million, an increase of 14.3%, and it is expected to reach half of the US car sales. In general, the main line that affects demand for passenger vehicles is the growth rate of households that can purchase cars. The growth of households purchasing car capacity mainly depends on the growth rate of GDP in the short term. Therefore, as long as the main factor GDP keeps high growth, the development trend of passenger cars will not change. In 2006, consumption tax and oil prices only had a very short-term impact on the auto market.
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