2025 sand table deduction, evolution path of passenger car industry

The characteristics of the "third decade" of Chinese automobile popularization: the era of personalized consumption has come

The first decade and the second decade of China's automobile industry: from industrialization to privatization, cars began to be popular, consumers paid attention to cost-effective cars, and cars with balanced functions were better sold. In the industrialization of China after the founding of the People's Republic of China, automobile productivity continued to improve, the first car was produced in the mainland in 1958, and SAIC Volkswagen became the first joint venture car company in 1985, but it was not until 2000 (13 cars for 1,000 people) that China's passenger cars entered the stage of rapid popularity. At the same time, with the increase of national income, cars began to be privatized and gradually entered thousands of households. Since 2010, China's auto market has entered the "second decade" of popularity, independent brands began to challenge the share of joint venture brands with cost-effective SUVs, achieving the rise of the first round of independent brands, and the growth rate of the total industry has also experienced a substantial downward revision, and the industry growth mainly relies on the traction of SUV models. In the privatization stage, cars are mainly reflected in family travel needs, and car purchase decisions are often collective decisions of family members, so the best-selling models at this stage are often cost-effective, performance and space are more balanced, mature and stable appearance, and more homogeneous products.

Over the past 10 years, with the rapid adoption of passenger cars in the Chinese market, we have observed an intuitively conflicting phenomenon: Unlike the United States, the average sales volume of a single model in China's passenger car market has declined slowly after 2010, and has now fallen to 37,400 units per year, while the threshold sales volume to enter the top ten has continued to increase. This phenomenon precisely sums up the investment logic in the "second decade" of the automotive industry from an investment point of view: only by creating explosive models can excess returns be obtained. However, considering the unique personalized trend of the Chinese market in the future of the "third decade", we believe that car companies need to take into account the ability to "explode" and "personalized" in order to obtain an incremental market in the future.

The third decade: the "personalized" consumption stage has become a general trend, "one car for one family" to "one car for one person". According to the data of the National Bureau of Statistics, in 2020, the number of civilian cars in China reached 200/1,000, according to the average of 4 people for a family, the number of 200 people should be about 0.8 vehicles per family. Therefore, the improvement of the future ownership lies in the increase of the proportion of the second car in urban families, and the popularization of the first car in fourth and fifth tier cities and rural families. The decision-making of automobile consumption is changing from family group decision-making to individual decision-making. The "family" attribute of cars still exists, but the satisfaction of "personal" needs is becoming more and more important, especially considering that the users of the first car in the family are often dominated by the male owner, and the proportion of women and generation Z young people in the structure of users of the second car in the family increases. Changes in the consumer population and the rapid development of the science and technology industry have given China's automobile industry more changes, and the attributes of automobiles as "personalized consumer goods" and "science and technology tide play" are significantly enhanced. The ability of independent brands to position consumers and define products is significantly stronger than that of joint venture brands, and it is expected to occupy the lead on the track of "personalized consumer goods" and "science and technology tide play" in the future.

Generation Z will become the main force of car consumption, and the consumption concept is changing. Generation Z refers to the generation born between 1995 and 2009, also known as the connected generation. Affected by the rapid emergence of scientific and technological products, this group of people has formed a set of exclusive consumption concepts. In China, most of Generation Z are the only child, with strong self-awareness and desire for expression, and more distinctive personality characteristics. At present, in the Chinese automobile consumer market, the contribution of Generation Z can not be underestimated. Roland Berger predicts that by 2020, the proportion of people born in the 1990s who buy cars may have reached 45%; Most of the new drivers are under the age of 25. As the pan-Z generation grows into the main force of automobile consumption, the consumption concept of the traditional generation of people focusing on brand, cost performance and practicality will be replaced by the consumption concept of focusing on personality, self-satisfaction, experience and service.