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China’s Auto Companies: Will the Legend of 2009 Continue?

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auto May 5, 2010 (Judy Zhang) A Prosperous Auto Market in China

The global financial crisis brought a heavy blow to the world auto market. In 2009, the auto sales in the US market wilted 21%, from 13 million to 10 million. Specifically, the “Big Three”--Chrysler, GM, and Ford--shrank 40%, 36%, and 22% in their sales, followed by Toyota, Nissan, and Honda with 28%, 26%, and 25% decrease respectively.

However, 2009 oversaw a huge explosion in China’s auto market with a 46% sales increase to over 13 million, and for the first time surpassed the US market and became the biggest market in the world. At the same time, GM and Ford  (NYSE:F) gained increased sales of 66.9% and 44%, and Nissan and Toyota increased sales by 30% and 21% respectively.

China’s auto companies even took a step ahead. Chana International Corporation, Beijing Automobile Works, and Shanghai Automobile (SHA:600104) occupied the top 3 in China’s auto market with sales increases of 117%, 61%, and 57%.

 

The upswing in China’s auto market not only saved the foreign auto companies, but also benefited China’s local auto companies in a higher level.

We analyzed the outstanding performance of China’s local auto companies in 2009, and we believe they will continue to outperform in 2010 based on three main trends:

• Preferential policies

• Increased GDP and overall demand

• Rapid growth of local brands


Preferential Policies

In 2009, China government announced several preferential policies to encourage auto consumption.

First, in March 2009, people in the countryside could enjoy a subsidy of about 10% of the original vehicle price for their vehicle purchase.

Second, in January 2009, the purchase tax on small-displacement vehicles was cut in half (from 10% to 5%), which significantly stimulated consumption and finally led to the market explosion from February 2009.

These policies, however, mainly favored China’s auto companies, because (1) the subsidies in countryside are limited only to the vehicles of China companies, and (2) most of the exported vehicles in China are not small-displacement.

As a result, China’s auto companies benefited from these preferential policies and undergone an enormous increase in 2009. However, on one hand, many foreign auto companies noticed this and started to export more small-displacement vehicles to China, hoping to share the policy benefits. On the other hand, although the countryside subsidies policy will remain in 2010, the purchasing tax on the small-displacement vehicles was enhanced from 5% to 7.5% in 2010. Therefore, China’s auto companies may need to make more efforts in order to realize the same achievement in 2009.


Increased GDP and Overall Demand

Nevertheless, the booming GDP and huge demand in China will help China’s auto companies to increase sales in 2010.

In 2009, the GDP in China increased 8.7%, along with an increase in per capita income of about 9%, driving up by 50% the demand for passenger vehicles.

The rapid urbanization process, along with the special consumption concepts of Chinese people towards cars, also contributed to the exploding demand in 2009. For example, a Chinese will purchase a car mainly based on peer pressure, rather than their real needs. This trend also contributes to the huge demand for passenger vehicles.

The accelerating economic growth but uneven distribution of resources in China (e.g. 88% of the coals are located in Middle West) requires intensive transportation and infrastructures such as freeways, which accounts for the increase of about 36% on the demand of commercial vehicles in 2009.

Most of this increased demand has been consumed by China’s auto companies such as Chana or Shanghai Automobile (SHA:600104) other than foreign companies, because most of the consumers in China can only afford middle-class vehicles instead of imported high-class vehicles. Therefore, a major part of the auto demand is focused on the local vehicles instead of imports.

Given these trends and the increasing GDP and demand in 2010, we estimated that the sales of China’s auto companies will keep rising.


Rapid Growth of Local Brands

In 2009, the China local auto brands also grew rapidly. In March 2010, Geely’s (HKG:0175) acquisition of Ford’s Volvo also marked a significant change of the joint venture tradition in China’s auto market, indicating that the China local auto brands will not only become a strong rival in China’s market but also play an important role in the global market.


Conclusion

China’s auto companies gained a significant achievement in 2009 due to preferential policies, the boom in China’s economy, and increased demand,

In 2010, sales will increase but the rate of increase may decline because of diminishing preferential policies, intensified competition, and the recovery of US auto market, which will shift the focus from China’s auto market. However, given the rapid increase in GDP and consumer focus on local vehicles as well as the rapid growth of local brands, China’s auto companies will continue their rapid expansion in 2010.

 

中国汽车厂商:2009的神话是否能够延续?

 

中国汽车市场的繁荣

全球金融危机对世界汽车市场造成了严重打击。2009年,美国市场的汽车销量萎缩了21%,从2008年的1300万辆锐减到2009年的1000万辆。尤其美国三大汽车厂商克莱斯勒,通用,福特在美国的销量分别缩水40%,36%和22%,日本的丰田、日产和本田在美国市场的销量也分别减少了28%,26%和25%。

然而,2009年中,中国汽车市场呈现出爆炸性增长,销量增长了46%,达到了历史性的1300万辆,并首次超过美国市场成为全球最大的汽车市场。同时,通用和福特也在中国市场获得了66.9%和44%的增长,日产和丰田以30%和21%的增长紧随其后。

中国的汽车厂商更是领先一步。长安、北汽和上汽2009年销量分别增长了117%,61%和57%,占据了中国汽车市场销量榜的前三名,

中国汽车市场的繁荣向上不仅拯救了国外汽车厂商,也使中国汽车厂商获得了更大收益。

我们分析了中国汽车厂商2009年的出众业绩,并且相信它们在2010年会继续保持这种出众表现,原因如下:

 

• 优惠政策

• GDP和整体需求的增长

• 本土品牌的迅速成长

 

优惠政策

2009年,中国政府颁布了几项鼓励汽车消费的优惠政策。

首先,2009年3月,农村人口在购车时可享受汽车原价10%的补贴。

其次,2009年1月,小排量汽车的购置税由原来的10%减半为5%,对汽车消费的刺激非常显著,并直接导致了2009年中国汽车市场的爆炸性增长。

但是,这些优惠政策更倾向于中国汽车厂商,主要原因是:第一,农村的购车补贴适用的主要车型仅限于中国本土生产的汽车;第二,大多数进口车不属于小排量汽车。

因此,中国汽车厂商从这些优惠政策中获益良多,并在2009年实现了销量上的巨大增长。然而,一方面,众多国外汽车厂商注意到了这些政策,并开始向中国市场加速引入进口小排量汽车,希望能从优惠政策中分一杯羹;另一方面,虽然农村购车补贴政策2010年还将延续,但是小排量汽车的购置税却从2009年的5%提高到了2010年的7.5%。所以,中国汽车厂商如果想要获得2009年的出众业绩,需要付出更多的努力。

 

GPD和整体需求的增长

除此之外,飞速增长的GDP和中国的巨大需求也将帮助中国汽车厂商获得销量上的持续增长。

2009年,中国的GDP增长了8.7%,人均收入增长了9%,拉动乘用车的需求上升了50%。

同时,中国城市化进程的加速,以及中国人对房、车等固定资产特殊的消费观念,也是2009年汽车需求爆炸式增长的原因之一。比如,一个中国人购买汽车时考虑的主要因素更多是身边的人拥有汽车给自己带来的压力,而不是自身的真实需求。这种消费趋势也带动了乘用车需求的巨大增长。

飞速的经济发展和中国资源的不均衡分布(如88%的煤炭分布在中西部地区),要求强化运力及增强基础设施(如公路)建设,这些因素推动商用车需求在2009年增长了36%。

上述这些需求增长多数都被长安和上汽等中国厂商而非国外厂商消化,因为中国大多数消费者只能负担得起中档汽车,对进口高档汽车仍不敢问津。因此,中国汽车市场需求的一大部分都被本土汽车而不是进口汽车占据。

考虑到这些趋势和2010年的GDP和需求走势,我们预测中国汽车厂商的销量会在2010年继续大幅增长。

 

本土品牌的迅速成长

2009年,中国本土汽车品牌也迅猛成长。2010年3月,吉利公司对福特沃尔沃的收购,标志着中国汽车市场传统合资模式的转变,同时也意味着中国本土汽车品牌将不仅将成为中国市场强大的竞争者,并将在全球市场扮演重要角色。

 

结论

受益于优惠政策,中国经济的飞速发展,以及需求的快速增长,中国汽车厂商在2009年获得了巨大的增长。

2010年,这种增长将会持续,但增长速度将会适当放缓,因为优惠政策逐渐减少,竞争加剧,同时,美国汽车市场的复苏也会将焦点从中国汽车市场转移。然而,由于GDP的飞速增长,中国消费者对本土汽车的持续关注,以及中国本土汽车品牌的迅速成长,中国汽车厂商在2010年还将持续快速扩张。

 

 



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