On May 3, the China Automobile Dealership Association released the "China's Auto Dealer Stock Early Warning Index Survey." Data show that in April the car dealers stocks early warning index was 54.6%, up 2.5% qoq, this is the end of the car market this year, the fourth consecutive month inventory warning index is located above the warning line.

On May 9th, the data obtained from the National Passenger Cars Association of the K Line indicated that in April of this year, the output of China’s general passenger vehicles was 2 million, an increase of 13.3% year-on-year; by comparison, sales were approximately 1.844 million. Vehicles, an increase of 9.4% year-on-year, although manufacturers in the first quarter to try to clean up inventory, vehicle sales have also recovered, but the gap between production and sales is increasing.

According to the data from the first four months, the production and sales volume of general passenger cars were 7.944 million units and 7.604 million units, respectively, a difference of 340,000 units. The inventory pressure of some brand car dealers may increase. In this case, what is the situation as a listed company? Which car companies maintain rationality, and which companies will fall into madness?

"The Rational School" dominates

With major auto listed companies successively publishing April production and sales data, after the car K-line finishing found that in addition to the large difference between the production and sales of some companies, the vast majority of companies are in front of the actual market environment, attributed to rationality.

On May 2nd, GAC Group took the lead in issuing an announcement. In April of this year, the production and sales volume of GAC Group were all 622,000 vehicles, an increase of approximately 7.3% year-on-year, maintaining a balance. It is worth noting that from January to April, the sales of Guangzhou Automobile and Guangzhou Automobile Mitsubishi were all higher than the output, and GAC passenger vehicles and Guangzhou Automobile Honda basically maintained a balance between production and sales.

What attracts attention is GAC Fick. In the first four months of this year, the company's production and sales were 45,000 units and 48,500 units respectively, of which sales of the company fell by more than 30% year-on-year. However, from the data point of view, companies have begun to take rational actions on the market and drastically reduce production. The data shows that in March of this year, the company's stock depth reached 2.5 months.

Similar to Guangzhou Automobile Fick, there are also hippocampus cars. On May 4, Haima Motor announced that in the first four months of this year, Haima Motors was dismal with sales of 27,800 units, a decrease of 50.29% year-on-year; production volume was approximately 28,800, a similar slowdown, but the company did not look like before. Crazy to take pressure in the library.

Unlike the slowdown in pressure storage, Changan Automobile, which released data on May 9, is more rational and has taken actions to clear inventory. According to statistics, in the first four months of this year, Changan Automobile sold 845,000 vehicles. Although it decreased by 15.55% year-on-year, the company’s output was 818,000 units, which meant that the company had cleaned up 27,000 inventories in the first four months.

Among them, Chongqing Chang'an Branch sold 316,000 units, which was basically the same as last year, but its output was 290,000 units, which is equivalent to a reduction of 26,400 units of its old model inventory. As Gong Bing, vice president of Changan Automobile, put it, it will make room for a new generation of security products. However, its joint venture company, Changan Ford, still needs to make adjustments through product replacement.

China Automobile Dealers Association believes that this is mainly due to the decline in demand. From its survey subindex, the inventory index, market demand index and average daily sales index have declined from March, respectively 56.7%, 39.8%, 45.9%, of which the market demand index fell the most, reaching 15.3%.

Several families are happy and happy. As the largest auto group in China, on May 7, SAIC Motor Group announced that its sales volume in the first four months of the year was 2.391 million units, an increase of 10.86% year-on-year, and the difference between production and sales was 72,000 vehicles. However, SAIC-GM-Wuling and SAIC passenger vehicles are facing inventory risks. From January to April this year, the output of the two companies was larger than the sales volume of 31,200 vehicles and 12,800 vehicles respectively.

In the inventory index of the China Automobile Dealers Association, the two car companies can also enter the "high inventory" ranks from time to time. It is worth noting that, in March, SAIC Roewe's inventory depth has reached 2 months and it needs to attract the attention of the company.

As robust as SAIC, there is Great Wall Motors. On May 8, Great Wall Motors released data showing that the company sold 81,800 vehicles in April, an increase of 11.79% year-on-year; in January-April, it sold 338,400 vehicles, an increase of 3.4% year-on-year.

While maintaining sales volume, Great Wall Motor’s output in the first four months of the year was 337,700, and production and sales remained basically balanced. What is particularly noticeable is that the WEY brand basically maintains a balance between supply and demand.

Although there is no output data, but from the current market demand, Geely Automobile and BYD with the brand promotion and product updates to accelerate, sales have maintained rapid growth.

Among them, on May 7th, Geely Automobile released its sales data, showing that in the first four months of this year, its sales volume was 515,000 vehicles, an increase of 41% year-on-year, and completed one-third of its annual target of 1.58 million vehicles.

This is not difficult to understand, from the point of view of sub-brands, in April the joint venture engine index, import & luxury brand index, self-owned brand index increased from last month, reaching 53.5%, 54.1%, 60.8%.

Among them, the highest warning index is independent brands, but also shows that the differentiation of independent brands is more serious.

Market may turn for the better in May

Judging from the specific indicators, most dealers believe that the market demand, transaction rate, and transaction price in April have decreased from last month. The decrease in the transaction price indicates that the inventory pressure is high, so the dealers will choose to use a relatively large margin to digest the existing inventory.

On the whole, in April, as the traditional off-season, the market demand itself is relatively low. In addition, due to the proximity of the 51 auto show, most customers maintain the attitude of holding the currency on a wait-and-see attitude; and since some northern regions enter the busy season, the rural consumer to store rate is reduced. . In addition, there is a Ching Ming Festival in April. In particular, consumers in the southern region are affected by traditional customs and will generally miss the April purchase.

Due to the declining market demand and sales in April, dealer inventory and operating pressure are high, and dealers have a lot of inventory pressure, which in turn leads to an increase in long-term vehicle age.

However, the Chinese Automobile Dealers Association Secretary-General Xiao Zheng San pointed out that some manufacturers can now actively control the inventory and control the overall market rhythm. When inventory is high, there will also be rhythm to control the market purchase volume, so the pressure of distributors is relatively large, but it can basically remain normal.

It is worth mentioning that from the feedback of distributors in this survey, the impact of rural consumers on the market is increasingly important. Therefore, the sinking of automakers in channels and services is crucial to boost rural car purchases.

For future judgments, a survey conducted by the China Automobile Dealers Association revealed that dealers’ expectations for the May market were better than in April. Most dealers expect that the auto show and May Day holiday in May will stimulate the market demand, market demand and sales will increase, dealers inventory pressure is expected to be eased.

Cui Dongshu, secretary-general of the National Association of Travel Unions, told the K-line of the car that this year should be a “Red May” with a high growth in retail sales. However, at the beginning of May, the sales of the 4S store were stable, and there has been no short-term hot-spot after tax reduction. "Apart from the April auto show in Beijing, some new cars are new generation products and require an inventory conversion process, which should be reflected in a certain amount of increments in May."