Throughout the year will continue to steadily increase when the automotive market is currently adjusting

After the auto market continued to grow rapidly for several years, it suddenly began to experience a drop in production and sales in March this year. In particular, the downturn in the auto market lasted for four months. Experts attributed this phenomenon to the auto market. Into the adjustment period, and analyzed that the main reason is due to the rapid growth of the automotive base this year, the price continues to fall, the import tariffs will soon be reduced, and the country's economic cooling measures taken together and other factors caused by the current market conditions. Recently, relevant experts from the Ministry of Commerce, the Development Research Center of the State Council and the China Association of Automobile Manufacturers have stated on different occasions that with the stabilization of macro-control policies in the second half of the year, and the stability of holiday factors and automobile prices, the auto market will continue to grow steadily throughout the year. - Excess supply will gradually increase In terms of aggregate supply, the domestic auto market supply is roughly "domestic output + import volume + last year's ending inventory". According to the statistical analysis of the passenger car market by Dr. Qing Wang of the Development Research Center of the State Council, the total supply of the passenger car market in the first half of the year was about 2 million vehicles, while the total domestic demand was 1.763 million, and the supply and demand difference was about 240,000 vehicles. . Coupled with the hidden inventory at the dealership, the difference between supply and demand may be even greater. "The supply and demand gap was about 90,000 units in the first quarter of this year. In the second quarter, it not only did not digest the stock in the first quarter but increased 150,000." According to him, "Although the situation of oversupply has intensified, it is still warning. Within the scope of the analysis.” According to the analysis, even though some manufacturers reduced their production in June, the average monthly growth of passenger vehicle production in January-June was still 33.2%, which was nearly 1/3 higher than the same period of last year. However, on the other hand, the year-on-year increase in sales of passenger vehicles has been decreasing month by month, with an average monthly increase of 28.2%, which is much lower than the average growth rate of production. Therefore, the exacerbation of the oversupply situation in the second half of the year is inevitable. People concerned in the Ministry of Commerce believe that the current drop in sales in the market is only a drop in growth rate. From the aspect of circulation, car sales in the first half of the year still have a large increase. - The decrease in sales volume growth is inevitable. The analysis concludes that the main factors causing the current decline in the auto market are as follows: First, the overall price level of passenger vehicles has fallen sharply in May, increasing the risk of consumer purchases. This further reinforces consumer expectations for car prices, which in turn reduces the price elasticity of demand in the short-term, leading to a cycle in which the auto market falls into the category of “price reduction - hold-to-buy, price-cutting promotions, and enhancement of currency holding”. Second, consumers expect that the import quotas and tariffs continued to decrease at the beginning of next year will lead to a sharp decline in the price of imported vehicles to suppress the domestic car market, resulting in a full price drop. Consumers' judgment of the market is mainly due to the price cuts of manufacturers in the first half of the year. Third, under the circumstance that car prices remain high for a long time, the sharp price cuts in 2003 and in the first quarter of this year caused demand to be released rapidly in the short term, and this normal decline has now occurred. Fourth, the gradual emergence of auto consumption costs and the tightening of auto loans have curtailed consumption in the short term, which has constrained the rapid growth of consumer demand. - There are indications that the price-reduced models have extended to high-priced models. Starting from the beginning of the year, all price-reduction models are basically concentrated on models with less than 150,000 yuan, and then gradually extended to high-priced models. By March, the price reduction models were mainly concentrated on models with a price range of 100,000 yuan to 200,000 yuan, and by June they had begun to extend to 300,000 yuan models. Dr. Wang Qing of the Development Research Center of the State Council said that although sales began to decline in March, sales volume fell to some extent. However, from the analysis of the market's entire transaction volume, there is no significant decline in the magnitude of the decline. In other words, the focus of competition in the auto market is a sign of shifting to higher-priced models. This person is expected to enter September, with the market demand situation will have improved. It is expected that the average annual increase of passenger car production in the second half of the year will reach 30%-35%, and the annual increase will be 33% year-on-year. The cumulative production of passenger vehicles will reach 4.1 million-4.2 million, of which the sedan will increase by 35% year-on-year. Cumulative production reached 2.65 million vehicles - 2.8 million vehicles, more than 201.89 million vehicles last year. However, according to a report from the Ministry of Commerce, China’s total automobile production in 2004 is expected to reach 5 million, an increase of about 13%, including 2.4 million cars, an increase of about 16%. - In the second half of the year, the price dropped by about 3%. Overall, because manufacturers have accumulated certain experience in price reduction activities since 2003, they have a certain understanding of the actual effect of price reduction in the second half of the year, and their price behavior will tend to be rationalized in the second half of the year. . Therefore, it is unlikely that there will be large-scale, high-frequency price cuts, and it is expected to decline by about 3% in the second quarter price level. However, there are still some incentives to make the car prices continue to decline. First, the increasingly fierce competition in the domestic auto market, price adjustment is still the main means for manufacturers to increase sales performance and expand market share. The price competition for high-priced models will be more pronounced. Second, domestic enterprises with profit margins 2-3 times higher than foreign countries still have room for price cuts. Third, the increase in inventory will increase the pressure on downstream distributors' cash flow, causing dealers to cut sales of inventory vehicles. Fourth, the new “Automobile Industry Development Policy” will allow large auto companies to continue to expand their market share by adopting mergers and price cuts to meet standards, and thus gain greater room for development. - In the second half of the year, the sales of automobiles will rebound. The Institute of Market Economy of the State Council Development Research Center predicts that sales in the second half of the year will show a steady upward trend, with a 30% growth rate throughout the year, and total sales of passenger cars will also increase. It reached 3.9 million - 4.05 million vehicles, of which sedan growth was 33%, and total sales reached 2.55 million - 2.65 million. The analysis shows that in the second half of the year, the passenger car market sales will rebound from the second quarter. Xu Changming, deputy director of the Information Resources Development Department of the National Information Center, believes that although the current growth in the production and sales of automobiles has slowed down, the prospects for auto demand are still promising. In particular, the continuous economic growth has enabled a considerable number of households to have consumption potential. He predicted that the total demand for Chinese cars in 2005 will reach 5.9 million, surpassing Japan to become the world’s second-largest automobile consumer. The total car demand in 2010 will reach 8.7 million. (He Dengfeng)

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