2019 auto market observation: the cold winter has

Auto market observation · 2019 | The cold winter has arrived, and Chinese auto companies have begun to reshuffle

Text | Pan Yuchen Editor | Xu Zhe At the beginning of 2020, Wang Xing, the founder of Meituan.com, suddenly "crossed the border" and said that in the future, China's auto market after reshuffle will form a "3+3+3+3" pattern: FAW, Dongfeng and Chang'an, three central enterprises; SAIC, GAC and BAIC, as well as Geely, Great Wall and BYD, as well as three private enterprises and three new forces of car manufacturing. This controversial view has also triggered a heated discussion in the industry.

According to the data released by the China Automobile Industry Association, in 2019, China's automobile production totaled 25.721 million, down 7.5% year on year; 25.769 million vehicles were sold, down 8.2% year on year. China's auto market as a whole has ushered in the second year of negative growth. Among them, the market share of independent brands fell below 40% again after 2014. Except for a small number of auto companies, most of the top brands showed a decline in varying degrees, while many second-tier and third-tier auto companies were swaying under the impact of the cold wave.

The era of big reshuffle of Chinese automobile enterprises is coming.

Geely: First down, then up, and the market stabilized

After failing to meet the sales target of 2018, Geely, the leader of its own brand, set a sales target of 1.51 million vehicles in early 2019, slightly lower than the total sales of the previous year. However, in the first half of the year, Geely's sales fell into a downturn because the sales of new products had not yet climbed. The operating revenue in the first half of the year decreased by 11% year-on-year; Net profit decreased by 40% year on year. In July last year, Geely had to reduce its target to 1.36 million vehicles. After that, Geely finally achieved this goal without any danger.

Nevertheless, thanks to the market accumulation in the past few years, Geely is still able to sit firmly in the Diaoyutai among its Chinese counterparts, and ranks fourth among all automobile enterprises.

Geely icon

It is worth mentioning that the sales performance of Geely in the second half of this year is significantly higher than that in the first half of this year. Among them, the MPV Jiaji launched in March, the sports SUV Xingyue launched in May and the Boyue Pro launched in September have successively contributed to the turnaround of Geely in the second half of this year. On the other hand, Geely's high-end brand Linke has been in a downturn since the end of 2018. Although the consumer market is gradually upgrading, the road to high-end independent brands is still very difficult.

As the largest shareholder of Daimler Group, the cooperation between Geely and Benz is also increasingly close. In March 2019, Geely and Mercedes-Benz announced that they would establish a smart joint venture, which was designed by Mercedes-Benz and manufactured by Geely. Daimler in fact entrusted Geely with the car brand which has been losing money for years; In the field of travel, the "Bright Travel" jointly launched by Geely and Daimler was also put into operation at the end of the year; In addition, Geely also co-invested with Daimler in Volocoptor air taxi.

In the field of new energy vehicles with key layout, Geely announced in June that it had reached cooperation with the Korean battery giant LG Chemical through a secondary company and built a battery factory. According to the plan, the project will be completed by the end of 2021 with an annual capacity of 1 billion Wh. This is also another battery supply channel that Geely has obtained after the Ningde era.

On the other hand, Geely officially released the pure electric brand Geometry in the first half of 2019, and launched the electric vehicle Geometry A based on the new brand. However, in 2019, Geometric A had a bad start, and its sales were almost completely defeated by GAC Aion S. After passing the trial and error of Geometry A, in the next year, Geely will release the new pure electric Geometry C, and continue to compete in the increasingly competitive market in the form of SUV.

In addition, Geely's understanding of new energy vehicles is not limited to pure electric vehicles: in October, Geely reached a cooperation with Weichai Power, an important equipment manufacturer, to promote the marketization and industrialization of methanol commercial vehicles, and to layout the global methanol heavy truck market.

In 2020, Geely has set a new year's goal of 1.41 million vehicles, and will launch six new vehicles, the first of which is the Geely icon, which first appeared during the Guangzhou Auto Show.

The Great Wall: advance first and then suppress, and attack in all directions

As one of the few automobile enterprises that maintain positive growth. In 2019, the sales of Great Wall Motors reached 1.06 million vehicles, a slight increase of 0.6% year on year, but the sales target of 1.07 million vehicles was not achieved. Among them, the Haval brand won the annual sales champion in China's SUV market for the 10th consecutive time with the result of 769000 vehicles.

In contrast to Geely, the performance of the Great Wall in the first half of the year was better than that in the second half. Although Great Wall has developed in high-end models, pickups, new energy vehicles and other market segments, it still relies on the performance of Haval SUVs, which in disguised form weakens the pressure resistance of Great Wall. While Haval H6 fell by nearly 20%, Haval M6 and F7 models hit in time to help the H series stop the loss.

On the other hand, like Linke, the high-end WEY brand model under Great Wall is also the first high-end brand in China to reach the level of 300000 vehicles, although it has been three years since its birth. Its cumulative sales in 2019 also exceeded 100000 vehicles, but it still fell by nearly 30% year on year.

Although the "brand up" of WEY brand was temporarily frustrated, the Great Wall did not give up the shaping of WEY. At the third anniversary conference of WEY brand held in November, Wei Jianjun, Chairman of Great Wall Motors, stressed that WEY should continue to be "over-invested, over-developed and over-allocated", further create a "sense of luxury" and become a "global luxury brand" in the next five years.

WEY VV7 PHEV

At the same time, Great Wall is also expanding and building domestic production bases. Following the headquarters in Baoding, Hebei, Xushui, Baoding, and Tianjin Binhai production bases, the eighth factory of Great Wall Motors in China, Taizhou Base, was officially inaugurated in February 2019, and Chongqing Yongchuan Base was completed and put into operation in August. In the future, it will mainly produce high-end pickup trucks and Haval H9 models.

While the domestic market continues to grow, Great Wall Motors has also made good achievements in overseas markets. Up to now, Great Wall Motors has focused on 19 markets in the world. Among them, the most important overseas production Russian Tula factory was officially put into operation in June, becoming a bridgehead for Great Wall Motors to enter the European market, and is expected to expand its production capacity in 2020.

However, the overseas business of Great Wall is not easy. In the first half of 2019, the rumor that "Great Wall was defrauded by Russian dealers of US $58.4 million" spread widely. In this regard, Great Wall clarified that Russian dealers did not deliver the car payment on time, involving less than US $50 million, but would not affect Great Wall's business in Russia. However, the failure of the Great Wall in overseas markets has also raised a wake-up call for all Chinese auto companies entering overseas markets.

In addition, the joint venture between Great Wall and BMW, the light beam car project, was finally settled in Zhangjiagang at the end of the year, with a total investment of 5.1 billion yuan, and will produce new energy and fuel versions of MINI models. The battle between Great Wall and Geely for the title of its own brand will open a new battlefield through the car brands of two of the world's top luxury car companies.

BYD: It's not too late

BYD is the largest auto company affected by the subsidy recession in the first half of 2019. BYD, which has set the annual target of 650000 vehicles, will have a cumulative sales volume of 461000 vehicles in 2019, down 11.4% year on year; Among them, the number of new energy vehicles dropped by 7.39% to 229500.

It is worth noting that in 2019, BYD's battery load was 10.75GWh, down 5.7% year on year, and continued to rank second; The number one Ningde Times was 31.46GWh, with a sharp increase of 34%, accounting for more than 50%.

BYD still enjoys the bonus of subsidies. According to the data disclosed by the Ministry of Industry and Information Technology, as the most subsidized auto enterprise, BYD is expected to receive 3.632 billion yuan of national subsidy in 2018, accounting for nearly 30% of the total subsidy. However, with the decline of subsidies, BYD began to fall second to Tesla in the world.

From the overall trend of sales of new energy vehicles this year, BYD's growth still depends on policy rather than market. In March this year, four ministries and commissions issued the Notice on Further Improving the Financial Subsidy Policy for the Promotion and Application of New Energy Vehicles, and set a three-month transition period. The new policy puts forward higher requirements for the range of pure electric vehicles and the energy consumption of plug-in hybrid vehicles. A batch of new energy vehicles that fail to meet the standard will lose the subsidy qualification, which will have a significant impact on new energy vehicle enterprises including BYD.

Due to the lack of sales of pure electric vehicles, BYD launched the e1, e2 and e3 models based on the e-platform at one go in the year, and expanded BYD's pure electric product line together with the yuan EC360 and the new Qin EV, but it is not enough to convert into sales in the short term.

BYD e3

At present, BYD passenger car factories are located in Shenzhen, Xi'an and Changsha. Last April, BYD successfully signed a contract with Changzhou to invest 10 billion yuan to build the first complete vehicle and parts factory in East China. However, against the background of unfavourable auto sales, the most significant event of BYD in the year was the formal agreement with Toyota: the two sides formally confirmed in November that they would establish a joint venture in 2020 to carry out the related businesses of pure electric vehicles and platforms, parts design and research and development for vehicles.

In addition to Toyota, BYD is also negotiating battery supply with many international brands, including Audi, and cooperating or discussing with state-owned enterprises such as BAIC, Chang'an and Dongfeng to jointly develop electric vehicles using e-platform technology. BYD's battery business is also expected to be split and listed in 2022.

Although the subsidy has declined, BYD has also "benefited from misfortune". Its lithium iron phosphate battery, which dominates the main market, has a "recovery" trend due to its low cost. BYD plans to launch a new generation of lithium iron phosphate battery (blade battery) in the second quarter of 2020. The volume specific energy density will be increased by 50% and the cost will be reduced by 30%. Wang Chuanfu, chairman of BYD, also said that the new generation of blade battery will be applied to BYD's new medium-sized sedan model, "Han", and will be launched in June this year.

In terms of the export of new energy vehicles, BYD is still in the forefront. Last December, BYD won the order for 259 pure electric buses in the Netherlands, making it the largest pure electric bus project in Europe so far. Up to now, BYD electric buses have spread across 6 continents, more than 50 countries and more than 300 cities in the world.

Others: The cold winter has arrived, and it is freezing

In the cold winter of the car market, the top private car companies are still one step away from the annual target, while more second-tier and third-tier car companies are mired in the mire, even on the verge of bankruptcy. Lifan, Zhongtai, Huatai, Cheetah, Haima and other enterprises were once powerful, but the cruel reality is that the market share of these brands has reached a negligible level: Haima Motor, which has been reported in the media as selling its real estate, sold less than 30000 vehicles in 2019, and its share price plummeted, being labeled as "* ST" and facing the risk of delisting. At the end of the year, the news of the establishment of "Transformation Studio" came out;

Lifan Motor has become the OEM of the ideal car of the new force of automobile manufacturing at the end of 2018, but it has been continuously pursued due to various debts from suppliers, which has dragged down the performance of the parent company, Its dealers have also successively "sat down to protect their rights";

Zhongtai, Huatai, Cheetah and others have repeatedly fallen into the list of executors, and even been rumored of bankruptcy liquidation. Although these auto companies insist that all operations are normal, it can be seen from their numerous debt disputes and information of the executors that the speed of the shuffling of Chinese auto brands has exceeded the outside imagination. [P] 。 Whether China's auto market will continue to decline in 2020 is still unknown, but in this cold wave, the survival of the fittest will undoubtedly end for a large number of private auto companies.