Chinese automobile industry development general situation

① In the past ten years, rapid development, production and sales ranked first in the world

The automobile industry has a long industrial chain, wide coverage and many upstream and downstream related industries, and its development level and strength reflect a country's comprehensive national strength and competitiveness to a certain extent. In the past ten years, with the sustained rapid growth of China's economy, the improvement of residents' consumption level, and the support of industrial policies, China's automobile industry as a whole has shown a rapid growth trend, which has led to the development of many related industries in the national economy. At present, a relatively complete industrial system has been built and has become one of the pillar industries to support and drive the Chinese economy.

From the perspective of automobile production and marketing scale, China has become the world's largest automobile producer and automobile consumer. According to the statistics of the China Association of Automobile Manufacturers, from 2010 to 2017, China's automobile production and sales continued to grow, with an annual compound growth rate of 6.84% and 6.93%, respectively. In 2018 and 2019, affected by factors such as the full withdrawal of vehicle purchase tax preferential policies, Sino-US trade frictions and the switch of environmental protection standards, China's automobile production and sales showed negative growth, but still maintained a high base, and in 2019, automobile production and sales were 25.721 million and 25.769 million, respectively.

In 2020, China's automobile market was affected by the epidemic, and the sales volume fell sharply in the first quarter. However, under a series of national and local policy support and the recovery of automobile consumption, the automobile market gradually recovered, and the annual production and sales volume of automobiles in China reached 25.2250 and 25.3110 million respectively, ranking first in the world for a second time. In 2021, China ended the situation of declining automobile production and sales, and the annual production and sales reached 26.0820 million and 26.2750 million, respectively.

In the first half of 2022, due to the shortage of chips, rising prices of power battery materials and the impact of the epidemic, the overall production and sales of domestic automobiles fell slightly year-on-year to 12.117 million and 12.0570 million, respectively, but benefited from a series of policies and measures to stabilize automobile growth and promote automobile consumption. At present, the overall recovery of the auto industry is good.

② Passenger cars dominate the automotive industry

Chinese automobiles can be divided into two types: passenger cars and commercial vehicles, of which the production and sales of passenger cars occupy a leading position in the total production and sales of automobiles. According to the statistics of the China Association of Automobile Manufacturers, from 2009 to 2021, with the rapid growth of China's economy and the vigorous development of the overall automobile market, the overall demand for domestic passenger cars has grown rapidly. Production and sales increased from 10.3838 million and 10.3313 million in 2009 to 21.408 million and 21.4820 million in 2021, with compound growth rates of 6.21% and 6.29%. From January to June 2022, in the case of a slight year-on-year decline in the total domestic automobile production and sales, domestic passenger car production and sales of 10.4340 million and 10.3550 million, respectively, an increase of 6.00% and 3.40%. The share of domestic passenger cars in China's total automobile production and sales increased from 75.29% and 75.72% in 2009 to 86.11% and 85.88% in January-June 2022, the proportion of which showed an upward trend, and it is the main force of the development of the automobile industry.

In terms of brand categories, joint venture brands are still in a dominant position in China's passenger car market, and lead the development of the high-end market for a long time. At the same time, with the improvement of product quality, technology absorption and transformation, and the enhancement of brand effect, China's independent brands have gradually occupied a place, but the market share is still relatively low. According to the statistics of the Passenger Car Market Information Association, the top ten passenger car manufacturers in 2021 are mainly joint venture brands, and the total sales volume of the top ten passenger car companies reaches 12.028,600 units, accounting for 56.10%, among which the market share of the joint ventures SAIC Volkswagen, SAIC-GM and FAW-Volkswagen is relatively high. The market share of most independent brand car companies is relatively low. From January to June 2022, China's independent brand cars seized development opportunities at the moment of industrial change, and their market share continued to increase, among which BYD's car sales and proportion increased significantly.

From the perspective of brand grade, luxury car sales continued to grow rapidly, and the market share increased, leading the development of the passenger car market. As a mainstream high-end automobile brand with large market demand and sales, luxury car brands have wide market recognition and strong technical strength. In recent years, the sales of luxury cars have grown significantly. According to the statistics of the report released by the Passenger Car Market Information Association, the sales of luxury cars from January to June in 2021 and 2022 are 2,652,100 and 1,265,300, respectively, an increase of 123.95% from 2015 to 2021. The compound growth rate was 14.38%, and in the context of the decline in passenger car sales in 2020 affected by the epidemic, luxury car sales still achieved positive growth. In addition, with the acceleration of China's new urbanization process, the improvement of residents' income level, and the continuous sinking of the luxury car market, the market share of luxury cars has also increased significantly, increasing from 6.10% in 2015 to 13.70% from January to June 2022, becoming an important driving force for reshaping the passenger car market pattern and leading the development of the passenger car market in the future.

(3) The market competition is full, and the industry concentration is high

At present, there are many manufacturers in China's automobile industry, and the market has formed a pattern of full competition, and the industry concentration is high.

Although China's automobile industry compared to the developed countries of the automobile industry development started late, but the rapid growth of the domestic market, relatively low cost of production factors, attracted the global automobile industry resources to our country, Audi, BMW, Mercedes-Benz as the representative of the high-end brands have established manufacturing bases in our country, China's vehicle industry's technical strength and manufacturing capacity has been rapidly improved. In the future, with the support of China's industrial policy, the upgrading of consumer demand and the continuous increase of residents' income, China's automobile demand will still have a large room for growth in the medium and long term.