Automobile sales continued to decline in January, bringing new market opportunities to the countryside

In 2018, domestic auto consumption registered negative growth for the first time in 28 years. Domestic auto sales continued to decline in January 2019, both year-on-year. Industry experts said that under the influence of factors such as the national policy to promote auto consumption, auto sales in 2019 will show a low-after-high development trend. China Association of Automobile Manufacturers ("CAAM" for short) statistics show that China's auto production and sales in January, compared with the same month last year, showed negative growth. In January, car sales totaled 2.367 million units, down 11.1 percent from a year earlier and 15.8 percent from a year earlier. In January, 2.365 million vehicles were produced, down 4.7 percent and 12.1 percent year-on-year, respectively. Xu Haidong, assistant secretary-general of the China Association of Automobile Manufacturers, said there was no sign of improvement in auto sales in January and that sales were expected to continue their downward trend in February. In recent years, as a result of seizing the era of high growth of SUV, the market share of independent brands has been greatly increased. But since last July, when the car market went into a downturn, SUVs have fallen more than the market average, with their own brands losing market share. In January, 510,000 SUVs were sold under Chinese brands, down 25.7 per cent from a year earlier. Affected by this, the market share of independent brands fell 2.4 percentage points to 41.2% in January. It is worth noting that within the autonomous brands, the market performance of the car companies is more serious differentiation. Geely Motor Corp. sold 158, 393 new cars in the first month of the year, up 2 percent from a year earlier, according to the company's data. BYD sold nearly 60,000 cars, up 77 percent year-on-year, Alternative-energy vehicles surged 342% from a year earlier, with cumulative monthly sales of 32,000 vehicles. But Chang'an and SAIC passenger cars, Guangzhou Auto Chuanqi sales fell sharply. Among them, Chang'an independent plate and Guangzhou Automobile Chuanqi decline more than 40%, SAIC passenger vehicles down 17.84%. Haima's monthly sales were the lowest, at 1,327, down 87.45 per cent from a year earlier and further down from 2018. In fact, Hippocampus has been losing money for two consecutive years. In 2017, Hippocampus Automobile suffered a loss of RMB994 million, and in 2018, Hippocampus Automobile is expected to suffer a loss of RMB1.2 billion-1.8 billion. As the Company's audited net profit for 2017 is negative and the net profit for 2018 is expected to be negative, if the Company's audited net profit for the last two consecutive fiscal years is negative, the Company's shares will be subject to delisting risk warning after the disclosure of the 2018 annual report, Haima Motor said. New energy performance bright new energy vehicles become the bright spot in the gloomy market. Production and sales of new energy vehicles reached 90,700 and 95,700 respectively in January, up 1.1 times and 1.4 times respectively from the same period of last year. Among them, the production and sales of pure electric vehicles reached 67,000 and 75,000 respectively, up 141.1 percent and 179.7 percent respectively over the same period of last year. The production and sales of plug-in hybrid electric vehicles increased by 59.92% and 54.55% respectively compared with the same period of last year. Even the fast-growing market for new-energy vehicles is fragmented, according to January sales figures released by car companies. In January, BYD Sales of new-energy vehicles totaled 28,700, up 291.11% from 7,300 a year earlier. Nearly 30 per cent of China's new-energy vehicle sales come from BYD, according to figures released by the China Association of Auto Vehicles. In addition, SAIC, Geely and Chery and other new energy vehicles have achieved a significant year-on-year growth. In prosperity, a few families rejoice and a few grieve. BAIC Blue Valley released data showing that in January 2019, BAIC new energy production of 142 vehicles, a year-on-year decline of 98.17%; January sales of 4,512 vehicles, down 43.66 percent year-on-year. Regarding the reasons for the decline in new energy sales of BAIC, some people in the industry said that first of all, consumers' acceptance of low-end new energy vehicles has declined with the adjustment of new energy subsidy policies and the upgrading of consumption of market products. According to the National Passenger Vehicle Market Information Joint Committee, sales of A-class electric vehicles rose from 8 per cent in January 2018 to 47 per cent in January this year, while sales of the A00 class fell to 30 per cent from 85 per cent in January 2018. BAIC recalls some new energy vehicles. State Administration of Market Supervision Official Website. Second, on November 30, 2018, Beijing Automobile decided to recall a total of 69,000 E, EV, EX, EU, EH and New Energy Vivant EV series pure electric vehicles from December 1, 2018 due to safety risks of brake booster vacuum pumps, which led to a lack of consumer confidence in them. In addition to new energy vehicles, a new round of automotive policies in the countryside will be an opportunity that China's own brands will need to seize in 2019. Faced with the downturn in auto consumption, the National Development and Reform Commission and 10 other departments jointly issued the "Implementation Plan for Further Optimizing Supply, Promoting Steady Growth in Consumption, and Forming a Strong Domestic Market (2019)" (hereinafter referred to as the "Plan"). The program promotes consumption in rural residents' car purchases, new-energy vehicles, and small-emission second-hand car transactions. In order to promote the upgrading of rural vehicles, rural residents will be given appropriate subsidies for the purchase of trucks of 3.5 tons or less or passenger vehicles of 1.6 litres or less, as a result of scrapping tricycles, which is considered a new round of "vehicle trips to the countryside" after 2009. Although the authorities have not yet launched specific measures, car companies have introduced subsidies, hoping to use the opportunity to boost sales. FAW-Volkswagen has launched the program of "10% down payment for new cars" and "maximum RMB 10,000 scrap allowance", and all its models that meet the "program" enjoy preferential subsidies. Chang'an Auchan launched a "rural subsidies" program, its six models can enjoy subsidies ranging from 5,000 yuan to 22,000 yuan. Some institutions predict that the introduction of national policies and the eventual landing of subsidies are expected to significantly drive the growth of auto consumption, and the trend of auto consumption in 2019 is likely to change. Cui Dongshu, secretary-general of the All-China Passenger Car Federation, said that due to the shortening of the 2019 Spring Festival holiday market, the country's auto consumption promotion policy and the gradual implementation of the sixth standard, the overall auto market in 2019 will show a trend of low-level development and high-level development. In his view, as the country stimulates the development of automobile county and township markets, the automobile market in small and medium-sized cities in the future will Gradually recover, is expected to resume normal development track.