Automobile industry or structural crisis

In 2013, the annual sales of Chinese automobiles exceeded 20 million for the first time, and the auto industry oversupplyed for the first time in three years. Does China's auto market really have "overcapacity"? How can China's auto industry cross the "scale theory" and return to rational growth? At the sub-forum on the hidden worries and outlets of the "scale theory" of the automotive industry held at the 2014 annual meeting of the Boao Forum for Asia, the auto industry leaders and industry experts at the conference held a heated discussion.

Industrial Structure Excessive Capacity

Statistics show that in 2013 China's auto production and sales completed 22.21 million vehicles and 21.98 million vehicles, respectively, an increase of 14.8% and 13.9% year-on-year, and output exceeded sales of 130,000 vehicles. This is the first time that the Chinese auto industry has experienced oversupply in the past three years.

For the first time, China’s auto sales spanned 20 million years and saw the hopes of the automotive industry. A large number of automakers started a new round of capacity expansion. It is reported that according to the plan of Shanghai GM, the automobile production capacity will reach 5 million vehicles per year by 2015; currently there are 3 Shanghai Volkswagen projects under construction, FAW-Volkswagen will establish its fifth factory in Wuhan, and the capacity of Volkswagen in China in 2018 To plan to 4 million vehicles. However, there are also worries in the industry: The industry has already seen a phenomenon of oversupply and the continued expansion of production capacity. The Chinese auto market is probably in a vicious circle of “scale theory”. So, does the Chinese auto industry really have the so-called "overcapacity"?

Xu Heyi, chairman of BAIC Group, analyzed from the perspective of “demand” that China’s auto industry does not have an overall excess capacity. He said that in China's existing stock market, housing market and auto market, the auto market is relatively healthy and stable. "China has more than 70 cars owned by thousands, which is twice the average level of the world." But at the same time, he also admitted that China's auto industry "has a problem of structural excesses."

Zhu Fushou, general manager of Dongfeng Motor, said that the vehicle's production capacity is a competitive production capacity. In a mature market economy, overcapacity is a basic factor driving the development of the market. In other words, in the market economy, supply must be greater than demand. "Because the rapid development of the automobile in this decade has exceeded people's expectation, various environmental protection issues, transportation problems, and energy problems have occurred one after another. This has virtually magnified the problem of excess capacity," said Zhu Fushou.

Zhu Fushou said that if we look at the current capacity utilization rate of China’s auto industry, it is still in a controllable range. He pointed out that at the end of 2013, the latest statistical data on China's auto production capacity was 29.14 million units, and the average annual production capacity in 2013 was 26.2 million units. In 2013, the sales volume of China’s autos was 22.21 million units. This way, the actual capacity utilization rate is 84. %. "80%-100% is the acceptable range of capacity utilization," he said.

However, Zhu Fushou warned at the same time that if the capacity utilization rate drops below 70% in the future, it must cause the automotive industry to attach great importance to it, and at present this kind of signs have already appeared. “According to the current plan, by 2018 or 2020, China’s production capacity will reach more than 40 million units, and if the calculation is based on the sales volume of 30 million vehicles, it is very likely that the capacity utilization rate will be less than 70% by then. This should draw our attention," he said.

Avoiding "scale" needs to return to the market

"The reason why there are signs of overcapacity is that there are several reasons. First, the high growth in car sales in recent years has given a very optimistic expectation to the operating management of automotive companies. Everyone has drawn up a more ambitious plan for the future. The second is that nowadays local governments have taken the auto industry as a pillar industry and have introduced some encouraging policies in the process of adjusting the industrial structure, which has caused many auto companies to make investment decisions. Can not make rational, objective and calm judgments." Zhu Fushou said.

He also pointed out that there are many non-market factors hidden behind the overcapacity. “Actually, China’s current automobile industry policies, including the production and approval process, all have an approval system. In the case that approval has become a scarce resource, automobile manufacturers have such a tendency: the more approval, the second step is completed. Just want to do the third step, and do the third step to do the fourth step, because they do not know whether the future policy will change." Zhu Fushou bluntly.

Zhu Fushou said that the auto industry is a pure market economy industry and it should be allowed to return to the industry itself. “The capacity policy should not be influenced by local governments. It should allow companies to independently decide when and where to invest. When everything is straightened out, any entrepreneur who makes decisions will be very careful,” he said.

Wu Weiqiang, editor-in-chief of the China Youth Daily Automotive Weekly, also stated that if the auto industry wants to avoid scale, it must be dominated by marketization. "In fact, on the surface, China's auto industry is indeed the most market-oriented industry relative to real estate and the stock market, but the traces of the planned economy are still heavy. The high degree of marketization may also inevitably have the consequences of excess capacity, but we The only thing that can be done is that the government and the local government can rely on the government and rely on the decision-making power to the market. This is a relief to the hidden worries of scale, he pointed out.

However, Zhu Fushou also said that if there are some excess capacity in the future, the country should introduce some policies to absorb these excess capacity, including encouraging manufacturing resources, allowing automakers to do more brands, he believes this can solve future production capacity. Question of excess.

China's auto brands need to improve their own brand strength

In fact, people from all walks of life have formed a consensus that the "scale theory" is merely a representation. The real crux of the Chinese auto industry is the small scale of auto companies and the lack of strength of their own brands.

“Now there are hundreds of domestic vehicle companies, but each has average production and sales volume, and some top-ranking car companies also produce two or three million units. In comparison, the top three cars in the world Basically, the production and sales volume of enterprises is in the range of more than 9 million to 10 million. China's auto companies are small-scale and monomer-separated, and they need to rely on mergers and acquisitions and restructuring to increase their own strength.” Xu Heyi said that from last year to this year, many domestic Auto companies have accelerated the pace of mergers and acquisitions, which is the future direction.

Zhu Fushou stated that in the 22 million cars sold in China in 2013, sales of genuine self-owned brands accounted for only 38%. The brand influence of China's own brands is still far from enough, let alone scale.

However, he is full of confidence in the future. He said that the Chinese actually have actually spent a dozen years as passenger cars. In the future, with the further maturation of the market economy, the market will better play its role in the survival of the fittest. In another five to ten years, China's own brands will certainly have greater development.