The 2024 World New Energy vehicle Congress (WNEVC 2024), co-sponsored by the China Association for Science and Technology, the people’s Government of Hainan Province and the Ministry of Science and Technology, will be held in Haikou, Hainan Province from September 27 to 29.
With the theme of “low-carbon transformation and global cooperation”, the conference aims to work with participants in the global automotive industry to promote the sustainable and healthy development of new energy vehicles, strengthen global cooperation and jointly achieve the goal of carbon neutralization.
Automobile House, as the official partner of the World New Energy Automobile Congress, successfully hosted the sub-forum of “consumption and Service of New Energy vehicles” at this conference.
join hands with enterprises and experts in various fields of the automobile industry to talk about the consumption trend, service mode and industry development trend of new energy vehicles, and jointly explore how to enhance user experience and optimize service processes to meet the changing market demand.
Promote the sustainable and high-quality development of the new energy vehicle industry.
, [Jiang Xiaowei, Chief analyst of Automobile Industry of Huaan Securities], Jiang Xiaowei, Chief analyst of Automobile Industry of Huaan Securities, pointed out in a speech at the forum that the inventory cycle of the automobile industry has a significant impact on the market, and the current industry is experiencing a passive inventory phase, which is affected by the capital market and capacity release.
It is expected that around 2026, the Chinese car market will usher in a new cycle of uptrend, which may be driven by overseas demand growth and the popularity of L3 self-driving technology.
The following is a transcript of the speech (edited): the current penetration rate of new energy vehicles has exceeded 50% in March and April this year.
As a field with strong alpha attributes, the consensus between its growth and the industrial cycle will be very significant.
Today, it is mainly from the perspective of the total amount of industry to reverse the performance trend and change of new energy vehicles, as well as the current cycle stage.
From the perspective of long-term development, since 2017, China’s automobile market has entered the post-popularity market, and the ownership of 150 vehicles is an important node, which means that 60% of households own at least one car, which indicates that the attribute of the rapid growth of the market will change.
After 2017, the industry experienced a downward trend in the inventory cycle and is currently experiencing a downward trend in the second inventory cycle.
This process is a positive phenomenon to the development of industry and the optimization of supply side.
In history, many industries have experienced phased challenges and processes in the course of decades of development, and become healthier and more competitive.
In the process of the development of China’s automobile industry, whether the uplink cycle is coming or not, we can learn from the situation in the development process of many pre-emptive markets and the factors that affect ownership.
At present, it seems that China’s domestic demand has great potential, the growth trend of per capita disposable income will not change in the short term, and the stimulus of fiscal and tax policies will still be important in the short term.
In the long run, the factors that affect the number of thousands of people include the potential of domestic demand.
At present, the trend of thousands of people in China has appeared, and the number of thousands of people in eastern economically developed areas such as Zhejiang has exceeded 300.
In non-restricted cities, the development of thousands of people still has a lot of flexibility and space.
Through the review, in the next 15-20 years, the number of thousands of people in China’s domestic market will gradually increase and is still in the growth cycle.
Although the growth attribute will be accompanied by the impact of the inventory cycle when the number of thousands of people reaches 150 vehicles, on the whole, we are full of confidence in the development of domestic demand in the Chinese market, and we need to deal with the impact of the inventory cycle on the industrial chain.
Take the American market as an example, its 1000-person holding capacity has reached about 800 vehicles, and the development process has experienced an obvious platform period, which is the impact of the inventory cycle.
Why is the inventory cycle formed? Because the demand curve of the industry is relatively smooth, while the supply side, especially the technology manufacturing industry, has a long-side effect.
In this process, changes in supply and demand may lead to a total assembly plant output of 200000 units, resulting in an obvious inventory cycle.
Judging from the demand curve, in the process of passive destocking in the industry, we have just experienced the passive destocking in the whole industry, especially in the automobile industry, caused by the global semiconductor supply crisis in 2021.
In 2022, we experienced the process of taking the initiative to restock.
With the release of the functional process, the price increase in the industry was based on weakness.
At present, we are going through the stage of passive inventory, because there are a large number of enterprises listed in the capital market in 2021 and 2022, which are transformed into supply-side production capacity with the passage of time, without strong inertia, which will bring challenges to the relationship between supply and demand.
In the long run, the inventory cycle will continue to cycle, each cycle will bring changes due to insufficient supply, but also lead to more capital expenditure.
The emergence of new technologies will also enter demand, and new investment will increase the release of production capacity on the supply side, and at the same time worsen the relationship between supply and demand in the market.
This cycle occurs in the development of all industries.
How to study or judge the stage of the current cycle, as well as the future direction and time node, from the existing mass analysis is a good case.
The data flow of the whole industry can affect the production side, and the existing capacity will become the depreciation of the mainframe factory’s profit statement, which will have a significant impact on the profitability of the mainframe factory.
As a result, more is devoted to market research, that is, the amount of production that is routinely disclosed every month.
One is export, the other is mid-range retail data.
Subtracting exports from production is basically equal to omni-channel inventory.
Of course, this is not complete, it is just a way to understand or judge the stage and trend direction of the current inventory cycle.
This chart shows the large fluctuations and changes in inventory from month to month.
If you pay too much attention to short-term volatility, it may confuse the judgment of trends.
Inventory fluctuates upward at the end of each year, while inventory fluctuates downward at the beginning of each year, which is not much different from that of previous years.
Cyclical fluctuations can also be shared in several directions.
First of all, analyze the monthly inventory fluctuations in the figure on the left.
The automobile industry is an industry with very strong quarterly fluctuations, which is the impact of the volatility of the year and the impact on the automobile industry.
This is the change brought about by sales, and the impact on the inventory cycle exists, but it is not so significant.
When we lengthen the time a little bit and turn the inventory fluctuation of the current month into a 12-month fluctuation, in fact, the inventory fluctuation has a strong annual cycle.
The development momentum of joint venture brands in the Chinese market is very strong around 2017, and 2017 may be the last active inventory increase in the inventory cycle.
Entering 2018, the market demand entered a state of weakness due to subsidy overdraft.
2018The industry has entered a state of passive inventory, no matter the number of days of inventory turnover, in fact, it is already on the rise.
In 2019, the automobile industry entered another stage, and the mainframe factory was also going bankrupt and exiting.
In fact, we see some fluctuations in the number of days of inventory turnover in 2019 from the data, and inventories are also in the process of falling in December.
2020 has the premise of ushering in a new cycle upstream, the supply side entered a relatively healthy state, after the epidemic, domestic economic stimulus policies and demand fully recovered, entering a two-year state of destocking.
There are factors outside the industry, such as the sanctions imposed on Huawei from 2019 to 2020, and Huawei’s crazy hoarding of goods throughout the market, leading to a shortage of global semiconductor inventory, as well as the hoarding of Xiaomi and OPPO, which has affected semiconductors.
In this round of upside, in addition to the impact of the demand side, there is also the impact of the semiconductor supply crisis.
Inventory will be added after 2020, because we have to recover those two years, resulting in a very high level of inventory in the whole industry chain in 2023.
China’s industry is very resilient and has put a lot of pressure on many dealers, which is an important part of the downward trend in car inventory.
In this process, it should correspond to the performance of the automobile index in the secondary market.
In fact, the inventory cycle of the whole automobile industry has a very synchronous impact on the secondary market, and also has a high correlation.
At present, we are going through this round of passive inventory, because we are supported by a very strong Alpha of new energy categories, this round will be over, the supply side will continue to optimize and improve, and it is expected that around 2026, the next cycle upside will come.
The factor of the next round of cycle uplink will not be the intelligence and electrification of this round, but may be the overseas demand of institutional and construction.
At that time, overseas demand will grow from more than 4 million units to 10 million units.
Another pull factor is the L3 level autopilot fully on the road, which will bring new stimulating or driving elements.
China’s automobile industry chain quickly enters the next cycle upstream, in fact, it still lacks some preliminary conditions.
Now the inventory water level of the whole industry chain and the whole channel end is too high, which does not support rapid entry into the next cycle.
Why is it more difficult for China? The core reason for entering the next cycle in the short term is that policy stimulus has a very strong short-term pulling effect on the market, the total long-term demand for any commodity is constant, and there is no demand elasticity for each industry in the long run.
Demand is elastic only in the short term.
In the process of the development of China’s automobile market, even when China’s automobile property is very strong in 2017, it has achieved very good performance and increment.
What are the consequences of raising the purchase tax from 5% to 7.
5% in 2010? In 2011 and 2012, China was a very good growth car market, but there was weakness.
The same is true in 2017, when car companies are encouraged to demand through the adjustment of purchase tax, corresponding to the purchase tax and new energy subsidies for fuel vehicles in 2018 and 2019, as well as the degree of market competition, the price reduction of market competition has indeed stimulated market demand, whether this demand will be challenged by policy overdraft in the future.
At present, the development of the market is inseparable from two curves, one is the supply curve, the other is the demand curve.
With the support of finance and taxation, the balance of transactions from 1: 00 to 2: 00, everyone’s costs began to fall, and market transactions began to rise.
In this process, the market demand is stimulated by the way of price war, which leads to the gradual change of the market demand curve from a certain elasticity to a close to vertical tree line, which may slowly begin to decrease for the pull benefit of the market.
Stimulated by the same value war this year, sales this year may be flat or weak compared with last year.
In this process, the elasticity of the market has become weak.
On a single brand or a single type of product, its demand curve still has a slope, such as new energy products, etc.
, new energy vehicles will be sold one more, other cars will sell one less, this kind of scalar competition.
When the price elasticity of a single brand gradually disappears, the price war is basically coming to an end.
at this time, the value war does not make any sense, and a good reserve of cash flow is the best idea.
After July, domestic demand reached a small peak.
The biggest reason for the small peak is the demand brought about by the renewal policy.
As a durable consumer product, the total short-term demand for cars is constant, and now it has reached a historical peak in August.
Will it be less prosperous at the end of this year and the peak season in December this year, which is worth tracking together? Although there is an increase in 2014 compared with 2013, but the absolute increment is definitely declining compared with 2023, the automobile market has grown this year, but the growth on the supply side has been more ferocious, resulting in a decline in the whole industry, both car companies and parts.
This is the pace of increasing effective production capacity.
In 2022 and 2023, costs on the supply side of the market begin to release, and these capacity cannot be sold at full capacity.
After these capacity is put into operation, they will be capitalized.
The implication behind capitalization is that the production process may become a relatively high burden and also bring pressure.
From this point of view, although I am very optimistic about the development of China’s new energy vehicle industry, we can not ignore the impact of some inventory cycles in the short term.
The downward trend of the current inventory cycle is to make China’s automobile industry enter a new round of supply-side reform and improve supply-side competitiveness and economies of scale.
In the long run, all manufacturing industries will always have changes that are not bright in the east and in the west, including Huawei’s return to lead the industry to rebound.
Because of its huge volume and its impact on the macro-economy, China’s automobile industry has the dominance of consumption and pull, which is still bullish for Chinese consumer cars, but it will bring pressure and challenges on the supply side.
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