Discussion on the Development Characteristics, Trends and Paths of China's Automobile Industry (Part 1)

First, take the momentum: the overall characteristics of the development of China's automobile industry

The automobile industry is an important support for the construction of manufacturing power, but also an important pillar of the national economy. At present, the scale of China's automobile industry is relatively high, but there are environmental and energy problems caused by the lack of key core technologies, the innovation system still needs to be improved, the slow construction of international brands, and the large number of cars. Under such a background, China's automobile industry has presented a policy situation focusing on new energy vehicles and intelligent networked vehicles. Enter the market trend of quality-oriented development, and develop the technology trend around electrification technology and intelligent network technology.

(1) Policy situation: The top-level design of the development of the automobile industry is perfect, and intelligent network connection and new energy are policy priorities

In the top-level design of the automobile industry, the state has successively issued the "Medium and long-term Development Plan for the Automobile Industry", "Intelligent Vehicle Innovation and Development Strategy" and "New Energy Automobile Industry Development Plan (2021-2035)". The Medium and long Term Development Plan of the automobile industry proposes a general goal, six sub-goals, six key tasks and eight key projects for the development of China's automobile industry, one of which is to build an automobile power, and the overall goal can be further refined into six sub-goals. Major breakthroughs have been made in key technologies, the whole industrial chain has been safe and controllable, Chinese brand cars have developed in an all-round way, a new industrial ecology has basically taken shape, international development capacity has significantly improved, and the level of green development has been greatly improved. In order to support the realization of the objectives of the automobile industry, the corresponding key tasks and key projects are put forward. In the key tasks, it is clearly proposed that the key areas of the development of China's new energy automobile industry include new energy vehicles, intelligent network connected vehicles, energy-saving vehicles three key areas, and key projects also put forward new energy vehicle research and development and promotion application engineering, intelligent network connected vehicle promotion project.

The "Intelligent innovative Vehicle Development Strategy" makes clear that intelligent vehicles are already the strategic direction of the development of the global automobile industry, which is of great strategic significance to China, and further puts forward the goals of China's standard intelligent vehicles in terms of technological innovation, industrial ecology, infrastructure, regulations and standards, product supervision and network security system. And the main tasks of intelligent vehicles in technological innovation system, industrial ecosystem, infrastructure system, regulations and standards system, product supervision system and so on. The "New Energy Automobile Industry Development Plan" has deployed five strategic tasks around the development of the new energy automobile industry, including improving technological innovation capacity, building a new industrial ecology, promoting industrial integrated development, improving the infrastructure system, and deepening opening-up and cooperation.

In terms of specific goals, the "New energy Vehicle Industry Development Plan" proposes that by 2025, the average power consumption of new pure electric passenger vehicles will be reduced to 12.0 KWH / 100 km, the sales volume of new energy vehicles will reach about 20% of the total sales volume of new vehicles, and highly autonomous vehicles will achieve commercial applications in limited areas and specific scenarios. The "Intelligent Connected Vehicle Development Strategy" proposes that by 2025, China's standard intelligent vehicle technology innovation, industrial ecology, road network facilities, regulations and standards, product supervision and information security system will be fully formed, new cars will basically realize intelligence, and high-level intelligent vehicles will achieve large-scale application. The "Medium and Long Term Development Plan for the Automobile Industry" proposes that by 2025, the global influence and market share of the backbone enterprises of new energy vehicles will be further enhanced, and intelligent connected vehicles will enter the world's advanced ranks.

On the whole, China's automobile industry will closely focus on the two important development directions of new energy vehicles and intelligent connected vehicles, electrification and intelligent connected vehicles will become the development theme of China's automobile industry for a long period of time in the future, the development goal reflects the requirements of scale, but also contains high expectations for technology.

(2) Market trend: The scale and speed type has changed to the quality and efficiency type, and the segmentation field of new energy vehicles has outstanding performance

1. The probability of substantial growth of sales volume is low and the ability of independent brands is not high

In terms of market size, China's auto sales rank first in the world for many consecutive years, with a high auto market size, but through the changes in the scale and growth rate of China's auto sales in recent years, it can be found that the current market size growth of China's auto industry has slowed down, and even the scale of auto sales has experienced negative growth in recent years. According to the current market size trend, it can be preliminatively judged that the probability of substantial growth in the automobile market in the next few years is not large.

In terms of independent brands, FAW, BYD, Geely, Changan, Great Wall and other independent brand car enterprises have risen rapidly in the past two years, but overall, the strength of independent brands in China's current automobile industry is still insufficient, and the data of the market share of independent brands in China in the past five years show that they are less than half, accounting for about 40%; German, Japanese, American, Korean and European car brands occupy a large proportion in China's auto market, especially in the field of luxury cars, and foreign car brands are still dominant.

2. The new energy vehicle market has the first-mover advantage and is in a new adjustment stage

After years of cultivation and development, China's new energy automobile industry has a certain first-mover advantage, which is mainly reflected in the market size and the strength of independent brands. The new energy automobile industry has gone through the planning stage, the introduction stage and the development stage, and by 2019, the sales volume of new energy vehicles in China has reached 1.206 million, accounting for 53% of the total global sales. Since 2015, China's new energy vehicle production, sales and ownership have ranked first in the world for five consecutive years, and the growth rate of new energy vehicle sales in 2016, 2017 and 2018 has been more than 50%. In addition to the scale, the strength of China's new energy vehicle independent brands has also been improved, BYD and other traditional car companies in the field of new energy vehicles excellent performance, and Weilai, Xiaopeng, ideal and other car making new forces in the new energy vehicle market segments also have good performance, favored by market capital.

It is worth emphasizing that, under the influence of various factors such as policies and markets, China's new energy automobile industry has entered a key adjustment period since 2019. At present, it is an important time node for China's new energy automobile industry to transition from subsidy policy to integral policy, and the intensity of automobile supply-side reform will be further strengthened in the future. The market vitality under the new situation will be further stimulated.

3. Developed regions lead the promotion of intelligent connected vehicles and accelerate market penetration

At present, the promotion and application of intelligent connected vehicles are led by economically developed areas and areas with good automobile industry foundation. According to the regional distribution of the national intelligent connected vehicle test demonstration zone, it can be found that the current intelligent connected vehicle test demonstration zone is concentrated in the Yangtze River Delta, Guangdong-Hong Kong-Macao Greater Bay Area, Chengdu-Chongqing region, Beijing-Hebei region, the middle reaches of the Yangtze River and other regions with high scientific and technological level, relatively developed economic level and good automobile industry foundation. In such a test pattern, it can not only rely on the comprehensive strength of regions with strong comprehensive strength to provide guarantee for the development of the intelligent connected automobile industry, but also enable the testing of intelligent connected vehicles to be carried out under relatively rich climate and environmental conditions, providing certain guarantee for the diversity and comprehensibility of the test data of intelligent connected automobiles in China. Improve the level of road test data construction of intelligent networked vehicles in China.

Combined with the development goals of intelligent vehicles mentioned in the "Intelligent Vehicle Innovation and Development Strategy", we can see that the future penetration trend of intelligent connected vehicles in the entire automotive industry will be manifested in two aspects: first, the market penetration rate of intelligent connected vehicles will have a higher growth, and the second is the proportion of high-level intelligent connected vehicles will be further improved.