Unforgettable memories in 2003, ushering in a new 2004, naturally will inevitably inventory the past and look forward to the future. At this time last year, China Automotive News analyzed the major factors affecting the market and their changing trends. When conservative sentiment was once filled, it was boldly predicted that the passenger vehicle market in China will continue to maintain a high growth rate of over 60% in 2003. . This prediction has been confirmed by reality.
According to relevant data from the China Association of Automobile Manufacturers, the passenger car market in China grew rapidly in 2003. Among them, from January to November, a total of 1.8011 million passenger cars were produced, an increase of 83.74% year-on-year; cumulative sales of cars were 1.731 million, an increase of 69.95% year-on-year. This is exactly the same as we predicted at the beginning of last year.
In 2004, the speed of production and sales of passenger cars in China will continue the trend of high growth last year? Through our analysis, we predict that in 2004 China's production and sales growth of passenger vehicles will undoubtedly exceed the number in 2003. Even if the base is expanded again, the growth rate is still expected to reach about 50%.
The private-sector investment has grown rapidly
Further expand consumer demand
In 2003, the reason why the Chinese passenger car market can continue to maintain rapid growth is because China's macroeconomic level has continued to improve. In 2004, this degree of association will continue to deepen.
In recent years, China’s economic growth has clearly been characterized by “government-ledâ€. However, since 2003, the government's activation effect on social investment has begun to show. In 2003, the growth rate of private investment in China has been basically the same as that of state-owned investment. In 2004, it will be expected to exceed state-owned investment. China’s economy has begun to show its momentum of expansion driven by autonomous growth. The proportion of government-led factors has continued to decrease, and the autonomous growth mechanism for investment has further increased.
This increase in the autonomy of investment will undoubtedly play a huge role in the direction of China’s economy, just like the rapid growth of overseas direct investment and the escalation of consumer spending. In 2003, the supporting forces for China’s economic growth have undergone fundamental changes. In 2004, the Chinese economy will gain more momentum for development.
From recent major conferences held by the Central Government, China's economic restructuring will be significantly strengthened in 2004. The focus of economic work will be on adjusting the structure, transforming the growth mode, and improving the quality and efficiency of growth. Among them, the policy of adjusting the proportional relationship between investment and consumption, expanding consumer demand, and cultivating and stimulating new growth hot spots for economic growth will be further improved in 2004. All of these factors have become the strong cornerstones to ensure continued rapid growth of the passenger vehicle market in China in 2004.
Car related policies are constantly improving
Become a strong guarantee for rapid growth
The year 2003 can be said to be a bumper year in automobile policy. The policies that were introduced covered many aspects such as automotive finance, production, and transportation. Among them, the "Administrative Measures for Auto Finance Companies" and the "Implementation Rules for Administrative Measures for Auto Finance Companies" broke the status quo of too-monotonous business in China's auto consumer credit market and provided strong policy support for the diversified development of auto companies' businesses. .
In 2004, we had reason to expect more auto policies to appear. Many of them include the "Automobile Industry Policy", "Automobile Consumption Policy", "Automobile Product Brand Monopoly Management Measures", "Defective Automobile Product Recall Management Regulations" and "Home Car Product Repair Replacement Returns" that have not been brewing for a long time. Responsibility regulations and so on. These policies are both macroscopic and microscopic. It refers not only to the direction of industrial investment, but also to the improvement of circulation and aftermarket measures. The introduction of all these automobile-related policies undoubtedly will create a healthier automobile development and consumption environment in 2004 and directly promote the expansion of the consumer market.
Overall price space adjustment
More consistent with the purchasing power of consumers
After China's accession to the WTO, import tariffs on automobiles have been reduced year by year, and the pressure on domestic cars has continued to increase. In 2003, China's auto import tariffs fell by nearly 6 percentage points. From 2004 onwards, the tariff on cars under 3.0 liters will drop from 38.2% to 34.2%, a drop of 4 percentage points, and the tariff on 3.0 liters or more will drop from 43% to 37.6%, down 5.4 percentage points. At the end of 2005, China's auto import tariffs fell to 25%. With the gradual reduction of import tariffs, the increasing number of permits will inevitably affect the price chain of the domestic passenger car market. In 2004, the overall price space of the domestic passenger car market continued to decline, and it has been beyond doubt.
The continuous warming of China's passenger vehicle market in 2003 has attracted companies with ambitions in formulating plans for expansion in 2004. It is understood that Guangzhou Honda will have a production capacity of 240,000 units in 2004 based on 120,000 last year; after the FAW-Volkswagen 2 plant is completed this year, the production capacity will reach 330,000 units, plus 330,000 units of the old factory, for a total of With 660,000 units, production capacity has doubled; after Shanghai Volkswagen completed 396,000 units in 2003, the 2004 target also pointed to 462,000 units; Shanghai GM completed 200,000 units in 2003 and this year's target is close to 300,000 units on the basis of last year; In 2003, Shenlong Automobile achieved an annual sales volume of more than 100,000 units, and its 2004 sales target is expected to be 140,000 units. After the completion of Beijing Modern Phase II Expansion Project, the production capacity in 2004 will reach 150,000, almost three times the previous year. In addition, Chery, Geely and other companies will also exceed the annual output of 100,000 vehicles in 2004. The rapid expansion of production capacity is bound to have an impact on the supply and demand relationship, and thus directly reflected in the price strategy competition.
In addition, according to the "Announcement" just released by the National Development and Reform Commission and the disclosure of major manufacturers, in 2004, the new car will be launched in 2004 will continue its strong momentum last year, almost every manufacturer will have more than one new model available It is expected that in 2004, the new car will reach more than 40 balances. In addition to the models already listed in 2003, the domestic passenger car market will have more than 100 new and old models participating in the competition. As models continue to increase and the market continues to break down, competition will inevitably become even fiercer.
Beginning in the late 1990s, Chinese urban residents entered the savings preparation period where the consumption structure once again escalated. With the consumption structure focusing on “eat and wearâ€, the transition to the consumption structure dominated by “residential housing†was accelerated. Especially since 2002, residents’ ability to spend on emerging durable products such as automobiles and housing has increased significantly. The consumption structure has been accelerated, and the passenger car market in China has begun to enter the “wailing†consumption stage and will continue for quite a long period of time.
Tariffs have been lowered, production capacity has been expanded, new products have increased, and many factors have contributed to a further reduction in the overall price of the passenger car market in 2004. At the same time, the fact that many consumers are eager to book new cars also shows that the domestic car market still has plenty of consumer kinetic energy. Survey data from the National Bureau of Statistics shows that in 2004, consumer expectations for income rose and the confidence index further increased. While the overall price space is lowered, residents are expected to continue to increase their income, which will inevitably induce a stronger purchasing power.