Cheng Zhenhao: How big should China's auto market be?

The auto industry must develop in tandem with related industries and make progress together. It is impossible for China to become a powerful automobile country by “solitarily fighting” or “outstanding”. All kinds of facts show that in China, the automotive problem reflects typical development and sustainability issues. Therefore, to a certain extent, it can even be said that if we can find a "new road" different from the West for China's automobile development, then it is equivalent to finding a feasible path and reference to "coordinates" for China's sustainable development.

Planning a realistic development strategy for Chinese cars will have a huge and profound impact not only on China but also on the world. From this point of view, China's automobile development strategy is a national strategy. It is necessary for the central government to make a national-level prediction of the total amount of development of the automobile, rather than letting individuals or certain interest institutions in society decide.

At the national level, at least the National Development and Reform Commission and the Ministry of Industry and Information Technology should take the lead, the China Automotive Industry Association and the Automobile Engineering Society and other organizations, organize experts in relevant fields, and conduct in-depth studies on the development goals and speeds of China's automobiles in the near, middle and long term. In order for this research to be in line with China's objective and practical conclusions, all researchers must stand at the height of the national overall situation and comprehensively and comprehensively consider the development indicators of various aspects of China’s economy and society and related factors of basic national conditions to build different models. Put forward the best solution.

More than good

Thanks to the implementation of the country's strategy for reform and opening up and the continuous deepening and response to the "WTO entry" challenge measures, the rapid development of China's autos in the past decade has been extraordinary. In such a short period of time, the production and sales of more than 10 million cars and ranking first in the world have surprised many people, even for the author who has been tracking the development of domestic and foreign cars. In the early years, a group of experts and scholars similar to the author and other industries only wanted to instigate cars to enter Chinese families. It was not appropriate to study how high the speed was to enter the family and how many cars China should have in order to be the most appropriate and reasonable.

It now appears that this is a major flaw. Nowadays, in the face of the rapid development of China's auto industry, it has brought tremendous benefits and a series of major issues associated with it. Although the car is an excellent thing, it is not as good as it can be. The growth of its "quantity" must have a limit, otherwise, it will go to the opposite side of everything in the world.

As for the future development scale and automobile penetration rate of China's auto market, it needs to have a clear understanding: First, based on the unique national conditions, China will become the world’s largest automobile producer, but it will be difficult to replace the United States and become the world’s largest automaker. Consumer countries, even if they really replace it with the United States, and second, from the actual situation, in the process of advancing modernization, China should not pursue the goal of development as high as the Western countries, if it reaches roughly the world average, It is more appropriate and reasonable.

For the first point, some people have objections, because in 2009 China has actually surpassed the United States to become the world's largest automobile. In fact, China's super-smooth market last year occurred in the specific circumstances of the global financial crisis. In normal years, the size of the US automobile market is mostly stable at the level of 17 million vehicles (this does not include large passenger and cargo vehicles, etc.). Therefore, in a sense, at present, China is only temporarily or incidentally overtaking the car sales.

If we talk about the concept of the future development of China's auto market, if the relevant people say that China's auto production will reach 20 million by 2020, then the Chinese auto export rate should be at least about 15%. As a result, the sales volume in the domestic market is about 17 million vehicles, which is roughly the same as the sales volume in the United States during the normal period of the current era. The "world's number one" hat can still be worn by the United States.

If China's long-term economic and social development goals are to be controlled and the total population is controlled at about 1.5 billion yuan, then the automobile penetration rate will be roughly 200 vehicles/1,000 people. At present, the average level of the world is a little more than 100 vehicles per 1,000 people. By then, it may reach 200 vehicles per 1,000 people. This means that China’s index is still roughly at the world average. According to this prediction, China will have one car per five people on average, that is, less than two cars each have a car. It should be said that this is still a relatively aggressive goal compared to China's objective conditions for universal access to automobiles (in 2009, China’s automobile penetration rate was approximately 76 million vehicles and 1.3 billion people=58 vehicles/1,000 persons).

This means that the concept of this development goal is not conservative. In the long term, China's auto market will have much room for expansion. There is no need to worry that the company has no room for survival and development.

What is the steady speed?

If it is said that the average annual growth rate of China's automobile production and sales in recent years exceeds 20%, it is inevitability and rationality. After a very high level of 13 million vehicles, it must develop at a low or steady pace. Maintaining this speed is compatible with our country's vehicle development goals. It is by no means a conservative, pessimistic low speed. This can be understood from different perspectives.

Since the current base (over 13 million vehicles) is already large, even a 4% growth rate is not the same as it used to be. For example, if the auto production and sales volume in 2010 grew by 4%, the absolute increase would be about 500,000 vehicles, and in 2004 it would have to reach an absolute increase of 500,000 vehicles, and its growth rate would have to reach 10%.

Compare horizontally. Looking around the world, even in the absence of a normal financial and economic crisis, the recent global growth in total automobile output is basically stable at around 4%. Observing from this perspective, taking 2010 as a starting point, from now on, it is normal and sustainable for China’s cars to move forward at a steady pace.

Looking from a deeper level, the development of Chinese cars at a steady pace is also a requirement for China to change its economic growth pattern. In the specific period of responding to the global financial crisis, it is reasonable to expect that automobiles will boost domestic demand and make it develop faster and more prominent. However, under normal circumstances (especially if annual sales have exceeded the 13 million mark), Chinese cars must In pursuit of scientific development as the goal, only balanced, coordinated and sustainable development without ups and downs conforms to China’s long-term fundamental interests. Such a speed is a good and fast normal development speed.

Steady growth is conducive to strengthening China's autos. Steady growth will also help our country cope with and adapt to the advent of automatization and appropriate and continuous improvement. One of the biggest advantages of China in the world competition is to have a huge market that is unparalleled. Because of this, we should cherish the market as a pity.

If the auto industry can grow at a steady pace, in the long run, it will benefit the growth and development of local companies and independent brands. Under the present circumstances, local companies have a large gap compared with multinational corporations in many aspects and appear weak. The faster the "cakes" in the Chinese market are becoming bigger, the more profitable multinational companies will have, and the more painful the Chinese local companies are.

U.S. GM's domestic sales of cars in 2009 fell by nearly 30% year-on-year, while it rose by about 70% in China. Ford Motor Sales in China recorded a record high in 2009, with an increase of 44%. China has become the fastest growing market in the world. Toyota's global sales fell by about 20% in 2009, but it increased by 21% in China, and German mass sales rose by more than 30% in 2009 in China.

If Chinese domestic companies and independent brands use the favorable opportunities for the steady development of the Chinese auto market to become stronger and bigger, and there is greater improvement and enhancement in terms of “quality”, then in the future, if the market still has more room for development, there will be This kind of market competition may be reversed to obtain more benefits.