Excess capacity” is not a new topic to automotive industry. But with the emergence of the first negative growth of China’s automobile market in the April, “excess capacity” crisis will really happen.
Since this year, the automotive industry had the stimulus delisting, high oil prices. The central bank raise rates to tighten liquidity. Beijing began licensing policy to limitt the number of cars. All these encourage consumers to wait and see. Therefore, the traditional climax of small car market in May took the place of the traditional low season in Jun. Most car dealers do not have much expectation on the terminal market in the next 2 months. “Now the monthly sales is only 60% Of the regular month in last year. ” said a dealer in Guangzhou. The situation of the automobile market since the February of this year is very bad.
However, it should be noted that this round of “excess capacity”should be a structural surplus, rather than the overall surplus of the whole industry.
Automotive industry has entered a period of adjustment and it may have to undergo two years or so. The industry will not form a new round of rapid growth until 2013. But the magnitude will not be as high as before.
Stimulus over the last 2 years led to the early release of consumption potential. The delayed construction of urban infrastructure facilities, the withdrawal of stimulus policies and even changes in the macroeconomic environment are the objective factors of the industry’s entering into the adjustment period.
In the past two years, the automotive industry has experienced double-type growth. The production and sales scale of China’s auto market jumped from more than 9 million vehicles in 2008 to more than 18 million cars in 2010.
In automotive industry, the sales growth rate has always been higher than the output growth. But from January to April of this year, the growth rate of profit was obviously lower than the sales growth, indicating that the business efficiency is declining.
According to the latest published market index, own-brand dealers are most pessimistic about prices in the future. 60% of them think that car prices may continue to falin May. Car dealers of joint venture brand think that the price may remain stable. Even so, car companies have already felt the market crisis.
Experts of this industry analyzes that this round of “excess capacity” should be a structural surplus, rather than the overall surplus of the whole industry’. Experts also expect that the automotive industry has entered a period of adjustment and it may have to undergo two years or so.