What will happen to the Chinese auto market in the fourth quarter?

Now, the industry has basically reached a consensus on this. There is no doubt that the growth rate of Chinese cars in 2011 will be significantly slower than in 2010. At the beginning of this year, the Automotive Research Institute of this newspaper once predicted that in 2011, the growth rate of Chinese autos will be around 10%. Compared with the mature world market, Chinese cars will return to the stage of rational growth. In other words, the average double-digit growth of Chinese cars for consecutive years has not been in line with the market's normal situation.

According to the data released by the China Association of Automobile Manufacturers, in the first nine months of 2011, the cumulative sales of Chinese automobiles only achieved an increase of 3.62% over the same period of last year, reaching 13.6135 million vehicles. The cumulative sales volume of passenger cars was 10,537,800, an increase of 6.38%. For the fourth quarter, the newspaper Automotive Research Institute and Gasgoo.com conducted a joint investigation.

The survey was conducted from October 18 to October 24, 2011. During the investigation period, a total of 2,153 industry participants participated. The survey results showed that 39% of the respondents agreed that the growth rate of the domestic auto market in the fourth quarter will still fall within the range of 1% to 5%; the more pessimistic 23% believe that the overall auto market will experience negative growth in the fourth quarter; In contrast, optimistic people who believe that the market growth in the fourth quarter will reach 5%-10% or even over 10% only account for 27% and 6% of the total number of participants in the survey.

Under the influence of many factors, Chinese cars are moving toward another pole of development.

Negative growth or in accordance with the characteristics of the Chinese automotive market, was considered to be a golden period in September. However, in the past September, the market did not show its past hot status. In fact, at the beginning of 2011, the industry’s conservative expectation of the market as a whole has laid the foundation for development.

At that time, in the survey on the trend of the Chinese auto market, only 15% of the people believe that the overall growth of the auto market this year will maintain a high growth rate of more than 15%. Among them, 18% and 14% of those who believe this increase will be 0-5% or even negative growth. From the results of the survey data, at the time, although the industry generally maintained conservative expectations for market conditions this year, the mainstream view is still not pessimistic. Most industry insiders are forecast to be around 10%-15%.

However, with the passage of time and the continuing downturn in the market, especially in April when there was a watershed in the “27-month first drop”, the argument that there may be a risk of hard landing in this year's auto market began to dominate the mainstream. In order to further understand the industry's judgment of market trends, in May 2011. Once again, we launched the industry survey for the second half of the auto market forecast (the number of people participating in the survey reached 3,812). The results show that the percentage of votes that will increase by 5% or less in the second half of the year is already as high as 47%, which is consistent with the whole year. Compared with the forecasted survey results of the auto market, the voting rate for accrediting this growth range has risen by more than 10 percentage points. In this survey, more than 60% of people who have reached 62% have set the growth rate in the fourth quarter to this range, which is 5% or even negative.

According to the characteristics of the Chinese automobile market, September was once considered a golden period. However, in the past September, the market did not show its ever-hot status. In January, the sales volume of passenger cars was 1,129,500, an increase of 8.79% year-on-year. This has brought pessimism to the market to a large extent.

Combined with the voting composition and the offline investigation, most people still believe that the market as a whole this year may have a flat or slight increase compared to last year. However, based on the year-on-year base rate in the fourth quarter of last year, we believe that, due to the influence of external factors such as the base effect and the adjustment of energy subsidies policy, the sales volume in the fourth quarter of this year is more likely to show a negative growth year-on-year.

Those who stopped spending ahead of time and accounted for 82% of the total number of voters considered that this fall in the Chinese auto market this year is a rational return of the market as a whole. It is a normal performance. Opponents account for only 11%

Although the factors that affect the auto market, especially the Chinese auto market, are complex, they can be summarized into three categories: endogenous factors of the demand side, external factors such as policies and consumption environment, and factors affecting external and endogenous interactions. In the past two years, the fundamental reason why the Chinese market was booming was that residents were in the stage of upgrading the consumption structure. The rigid demand for car consumption was strong. The government’s policy of stimulating auto consumption in response to the financial crisis intensified and catalyzed the demand side. The concentration of outbreaks, as well as the advance overdraft effect of endogenous demand before the policy may be withdrawn, are the result of a combination of the three that form a powerful synergy. Now these three types of influencing factors are basically returning to the standard and the market tends to be rational.

Judging from the survey results, the “overwhelming demand” and “exiting of stimulus policies” are widely considered by the industry as the two major factors leading to a significant slowdown in the auto market this year, with 33% and 28% respectively. In addition, inflation from the macroeconomic level and the rising cost of vehicles have led to the recognition of 15% and 13% of the participants who voted for the purchase of each of the two factors, and another 7% of the respondents. It is attributed to the intervention of administrative interventions such as purchase restriction.

Contrary to previous enthusiasm for speed, in this survey, the reality of the slowdown in the Chinese auto market has been accepted. Those who accounted for 82% of the voting participants agreed that this year's decline in the Chinese auto market is a rational return of the overall market and is a normal performance. Opponents only accounted for 11%. Although the overall market tends to be flat, neither analysts nor representatives of manufacturers are completely pessimistic about the performance of this market, and are still optimistic about the prospects for the development of the Chinese market in the next decade.

From the perspective of the global market, despite the slowdown in the growth of the market, the absolute value of domestic car ownership is still growing at a relatively high rate. If the market has not yet made effective adjustments and returns, and continues to continue the glory of the previous two years, it is very likely that the future market will be overdrawn in advance. Of course, such rapid growth is both unsustainable and unreasonable from an economic or sociological point of view, because it will have a major impact on the social ecosystem. Nowadays, the growing problems of traffic jams, tight energy supplies, and pressures on environmental protection are just a few examples.