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In 2005, China’s auto market was approaching 6 million vehicles, which may be tied with Japan and become the world’s second largest auto market. Comprehensive analysis of various parties, China Automotive News, judging that in 2006 China's auto market will move forward steadily, but the overall increase has declined.
In 2006, total car sales in the Chinese market are expected to reach about 6.4 million vehicles, an increase of about 11% from 2005, of which total sales of domestic cars will be about 6.3 million. In 2003 and 2004, the scale of the Chinese auto market reached 4 million and 5 million vehicles respectively. In 2005, China's total automobile sales increased by about 12%, which was lower than the 15.2% in 2004 and 34.2% in 2003, which is even lower than the 39.4% in 2002. Although the growth rate has slightly decreased, the automobile industry has become China's fifth-largest industry, moving five places before 2000.
In 2005, the total sales volume of passenger cars comprising cars, MPVs, and SUVs was approximately 3.2 million units, an increase of 22% over 2004; total sales of commercial vehicles were approximately 1.78 million, representing a decrease of approximately 4% year-on-year. In 2006, the total sales volume of passenger cars is estimated to be 3.6 million units, an increase of about 16%; the total sales volume of mini-buses is expected to be 890,000 units, an increase of about 7%. In 2006, the total sales volume of commercial vehicles was about 1.8 million, with a growth rate of approximately 3.7%.
In 2006, the growth momentum of China's auto market mainly comes from the following three aspects: First, GDP still maintains a relatively high growth rate; the National Bureau of Statistics predicts that it is 8.8%, which is 0.6 percentage point lower than this year. The second and third-tier markets began to start; statistics show that the per capita GDP of Zhejiang, Guangdong, the Soviet Union, and the Lusaka secondary market exceeded US$2,000 and approached the level of popularity of cars. 3. The central government's "Eleventh Five-Year Plan" proposal clearly states that the State encourages independent innovation and the development of independent brands. Enterprises generally increase their research and development efforts, increase the number of self-developed models and continuously improve their quality. At present, in the A00 and A0 sedans, the market share of self-owned brands has reached 54.3% and 50.6% respectively.
In 2006, there were also some variables in the Chinese auto market. First, the new consumption tax has been adjusted from three levels to seven levels. It is estimated that the impact on demand will be small, but it will have a greater impact on the product structure of the company. Second, next year is the last year of the WTO transition period. The tariff of whole vehicles will be adjusted from 30% to 25%; the tariff of spare parts will be adjusted from 13% to 10%. Some hesitant waiters may join the ranks of buyers and bring a small shock to the auto market. Third, the domestic crude oil import costs and product oil prices upside down, so that there is the possibility of rising oil prices at any time, the international crude oil prices to maintain the status quo or increase, the domestic oil price increase is an inevitable trend. High oil prices will stop some people from buying cars. According to information from various sources, it is unlikely that the fuel tax will be levied in 2006.
In 2006, the overall level of car prices will decline slightly, and domestic car prices will still be on the price slide due to a serious surplus of capacity. The fire of price cuts will further spread to cars above class A. All manufacturers want to reach production, new products listed on the market will give up price range, benchmark model price cuts, corporate cost control will be gradually effective, and the speed of research and development and localization rate will increase, which will cause the car price pattern to “crash†and even earthquake.
Commercial vehicle prices are more calm. 2006 is still the year of adjustment for commercial vehicles. If the current policy of oversupply, implementation of the regulations of GB1589 and GB7258 remain unchanged or loose; if the state controls the investment scale better at the beginning of next year, the heavy truck will survive the overdraft. During the fatigue period, the growth rate has increased and the total sales volume is expected to reach 240,000 units. Buses may also grow by about 7%.
Since the “unconventional growth†period of the auto market in 2003 has passed, the key auto companies have not increased their production, and profits have generally continued to decline. In 2005, they continued to decline, and the market competition became more fierce. Chinese auto companies should profoundly rethink their own investment models and corporate mechanisms, and reduce management costs in various operational aspects such as investment and marketing. With the increasing trend of technology and quality homogeneity, the cost has become the biggest weapon for global auto companies to compete. While paying attention to costs, we must also attach importance to execution. Under the background that the country is determined to build a conservation-minded society and a harmonious society, Chinese auto companies should increase the development of economic vehicles. The history of competition in the auto market over the past two years shows that the rise and development of enterprises are not based on investment and opportunities, but on internal strength and strategy.
China's auto market will move slowly and steadily in 2006