Auto Industry facing 30m units sales challenge in the 13th“five-year” period

Time:2016-01-06 11:15:27From:gasgoo Author:Biwen Wang (Shanghai Jan 5)- With the coming end of “12th-five” period, automobile companies are turning to R&D and brand-building in the coming “13th-five” period. Dong Yang, vice chairman of China Automobile Association of Manufacturers (CAAM)believes that, the “13th-five” period will be a period in which the auto industry has a fastest growth. “The increasing input of R&D fees, along with the break out of alternative energy vehicles and exported vehicles will make the new increasing point of China’s auto industry.”

Is it possible to reach annual 30m units?

According to data provided by CAAM, the total auto production and sales volume reach 23.72m and 23.49m units respectively in 2014. Calculated by the 4% growth, the data will be 30.01m and 29.72m units respectively in 2020, mainly leveling with the previous forecast of 30m units.

However, the unexpected downturn in 2015 adds some concerns on the market’s future. The updated sales data shows the overall market size will be 28.77m units in 2020, slightly smaller than the forecast.

Confronting the”new normal” slow growth, auto companies are adjusting their 13th“five-year” plans. Changan aims to reach a production and sales size of 4.5m units by 2020, including self-built brands of 2.47m units and self-built Changan Auto brands of 1.5m units. Dongfeng plans to have a production and sales volume of 3m units by 2020 for its self-built brands, including 1m units for commercial vehicles and 1m units for passenger vehicles. SAIC Group plans to launch 18 self-built models into market by 2020, with self-owned brands exceeding 2m units.

Cui Dongshu, General Secretary of CPCA told reporters that, most domestic auto groups have not completed their goals on self-owned brands during the 12th“five-year” period, therefore some are adjusting plans. “No matter whether the market can reach the 30m units goal in 2020, self-owned brands are taking steady steps towards a fast-growing period.”

Seeking for changes in 1m exported vehicles

In Dongyang’s view, exported vehicles will have a rise in the 13th“five-year” period. He believes that, it’s a time for exported domestic brands to change, not only relying on the trade, but also following the “belt and road” strategy.

Since last year, Chery, Geely, GWM, SAIC, BAIC, GAC and other groups have built overseas plants. SAIC’s plan of a 20%-30% exported sales among the total makes it having the largest proportion of overseas business among all auto companies. Changan plans to reach 400,000 units in the overseas market by 2020. Chery aims to become a global auto company in the middle and long term. CAAM predicts the total volume of exported vehicles will reach 3m units by 2020.

However, self-owned brands are facing new challenges. The exported volume reaches 668,200 units in the previous eleven months, decreasing 18.2% compared with the same period of last year. Dong Yang also points out the opportunity,” Self-owned brands such as Changan, Chery, GWM, and BYD develop greatly in the past five to ten years. Besides, the market shuffle and consumers’ decreasing adoration on famous brands bring advantages to self-owned brands.”

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