Chaos vs. Transformation: Four Conjectures of the Development of Chinese Automotive Market in 2018

On the last day of 2017, I woke up one night and everyone in the circle of friends brushed their selfies or photos when they were 18 years old. "My 18-year-old" quickly became the stalk of brushing WeChat friends. For all automotive companies that have been busy for a year, 2017 has passed. To adapt to the fastest-changing Chinese auto market, it is necessary to think non-stop about the 2018 strategy. The car industry Zatan believes that there are four major conjectures surrounding the 2018 Chinese auto market that are worth looking forward to and responding to.

Auto market: officially entered the period of shifting the impact of 30 million vehicles and a growth rate of about 3%.

From any perspective, the past two decades have been the golden period of development in the Chinese automotive market. The high growth rate and high quality have become the main features of the Chinese auto market. Since the beginning of the 21st century, the growth rate of the Chinese auto market has only dropped to 2.5% in 2011, followed by 4.3% in 2012 and 4.7% in 2015, with the rest being above 5%.

However, with the Chinese economy entering the upgrading stage, China's auto market may also be moving toward the historical stage of high-quality development. Reflected in the quantitative scale, that is, the absolute number is still growing steadily, but the growth rate will further decline. According to the judgments of several organizations at home and abroad in China FAW and China, the sales growth of the Chinese auto market in 2018 is expected to be 3%, and the overall market sales will exceed 30 million. In the case of a further slowdown in market growth, 2018 is an important turning point for both self-branded and joint-venture branded companies. Although scale is still the basis for competition among car companies, who can Products, technology, marketing services and other full value chain links will be upgraded first, and everyone will be able to grasp the future development rights and initiatives.

Structure competition: The SUV enters the red sea stage where the bayonet sees red. Autonomous car companies must conquer the “post-SUV” era strategy.

Judging from the laws of the Chinese auto market for many years, subject to a lower brand premium, once the market has been troubled, it is often the independent brands that are hurt the most. It is undeniable that over the years, with the help of the SUV market, independent brands such as Chang'an, Great Wall, Geely, Guangzhou Automobile, etc. have grasped a rare market opportunity and won a spot in the passenger car market.

According to the forecast of the China Automobile Association, the sales volume of SUVs reached 11.52 million units in 2018, an increase of 11% over the same period of last year, which is expected to exceed the passenger car for the first time as the main force of the passenger car market. Under the pattern of slowdown in the overall market, 11% of the market growth rate has been very bright, but it has slowed down by 30% to 40%. Almost every car company is involved in SUVs. There are several heavyweight products in almost every market segment, and the growth rate of the products obviously exceeds the increase in market capacity.

For independent brands, relying on forceful SUV market to achieve “staking” growth has become less likely. While fighting price wars, upgrading the arms race has become a necessary option to upgrade from a single product to a product. + One-stop ecological experience for the service is needed.

New energy vehicles: Development has no way back, and it has officially entered an annual sales volume of 1 million vehicles.

From December 18 to December 20, 2017, the Central Economic Work Conference was held in Beijing to make important arrangements for the economic work in 2018. The meeting for the first time proposed that in the next three years, we must focus on the three major challenges of defeating major risks, accurately preventing poverty, and preventing and controlling pollution in a well-off society.

Pollution prevention and control is listed as three major challenges, which already means that the development of China's new energy automobile industry has become a general trend and there is no escape route. In 2018, under the influence of multiple factors such as the acceleration of subsidy, the entry of foreign brands, and the opening of the double-integration policy, China's new energy automobile industry will be accelerated by the government to market-driven, which is expected to exceed 1 million vehicles. With the continuous adjustment of industry subsidy policies, the support direction of new energy auto industry will also begin to shift to “helping and strengthening”, and the industry will fully enter the stage of adjustment and upgrading. This also means that the government-led cultivation market model will come to an end and the company will lead. The new stage of cultivating the market opens and the market will soon face the test brought by the post-subsidy era. For all the participants, the new energy vehicle is already not a bit lucky, and it has no way to withdraw from it.

Internet construction: In the first year of mass production, the shuffle has quietly begun.

Although Jia Yueting, who is returning home next week, is on the road to return to China, the Chinese internet car industry driven by electrification, network integration, intelligence, and sharing is still busy. Just in the last two months of 2017, there were a group of new car companies that had new actions: Beiteng’s North American headquarters in Silicon Valley was officially launched; Weima’s first production model EX5 officially unveiled; Zhang Hailiang, who had left from LeTV, joined the café. And with a new team debut in Zhejiang; Weilai ES8's listing has won numerous attention.

In the past 2017, the Chinese automobile market has grown by leaps and bounds without being optimistic. The huge growth space has also allowed the capital market to see hope and continue to flow into the automotive industry. In just one year, it is not a traditional car company, and there are more than 10 Different "car prices" at home have mushroomed. Almost all Internet and technology giants, including BAT’s three giants, have participated in vehicle manufacturing in different ways. They all want to build a car, and inadvertently formed a wave of automobile manufacturing. Inspur was called "new car forces" by the outside world. In 2018, once the story is gradually honored, it may be necessary to open the industry reshuffle, 90% of Internet companies will die, this sounds a bit sensational, but it may come true.

This is the worst time and the best time. In 2018, the end of high-speed growth and the SUV becoming a Red Sea market all mean that competition is more difficult, but the new round of changes represented by new energy and intelligence has indeed brought about tremendous opportunities. The narrow road meets, only the brave one wins, only the innovator wins.