Eight Characteristics of China's Auto Market in the Next Decade

The arrival of the personalized car era will further test the domestic and foreign automotive companies' response to consumer intelligence and capabilities.

The first decade of the 21st century is over. The past decade has also been a “golden decade” for the Chinese auto market. The Chinese auto market has grown from 2 million cars sold in 2000 to 13.6 million cars sold in 2009. Vehicles, cars from the symbol of luxury and identity began to enter the family life of Chinese ordinary people, the potential of eruption also makes the global auto industry full of expectations for the future of the Chinese auto market. In this issue, we will continue to analyze the automobile market in China from 2010 to 2020 from the perspective of the development characteristics of the auto market to see what new features the Chinese auto market will present in this new decade.

Features 1. The urbanization process drives the further development of the auto market

Many people are optimistic about the development of the Chinese auto market in the next decade. Among the reasons for supporting the rapid development of the Chinese auto market in the next decade, one of the most basic reasons may be: China is continuing and will continue its urbanization process.

In the first decade of this century, the rate of urbanization in China has increased from about 35% to about 45%, and about 140 million people have migrated from rural areas to cities. The rapidly increasing urbanization rate has become the number one driving Chinese auto market. One of the most fundamental reasons for the appearance of the "Golden Decade".

In 2009, China’s urbanization rate reached 45%. By 2020, China’s urbanization rate is expected to reach 55%. More than half of Chinese people will live in cities, which means that there will be approximately 150 million people. To enter the city from the countryside in this decade, such a huge population will enter the city, and it will certainly bring huge market space to the city's housing, automobiles, and infrastructure construction.

Features 2. Overlapping east and mid-western car purchases

In most of the first decade of the 21st century, the economically developed coastal areas of eastern China, represented by Beijing, Shanghai, and Guangzhou, served as the “engines” for the development of the Chinese auto market. However, with the economic development in the central and western regions, In the next decade, the central and western regions will probably take over the major task of the development of China’s auto market and become the “blue sea” that domestic and foreign auto companies will enter first. In 2009, the automobile preferential policies for the automobile in the countryside and the purchase tax was halved. Under the stimulus, the tremendous energy released by the central and western regions of China can be seen as a preview of this trend.

In the next ten years, China's central and western regions will enter the peak period of automobile consumption, but the eastern market cannot be forgotten by enterprises. Currently, the penetration rate of automobiles has reached more than 20% in developed cities such as Beijing, Shanghai and Guangzhou. The number of car ownership has also jumped to more than 1 million vehicles. In the next decade, as the cars in the Midwest region enter the family, it is likely that in the eastern part of China, there will be a wave of car transfers. The auto companies can be described as good news: the tide of east-car exchanges and the tide of car-buying in the Midwest are superimposed.

Feature 3. Rise of used car market

In areas with developed automobile consumption in the United States, Europe, etc., the volume of used cars is several times that of new cars, but in the Chinese car market, the used car market is only less than one-third of the new car deals, with the automotive consumer market. Mature, I believe that the next decade, the used car market will be a huge development, second-hand car trading volume in the next ten years gradually catch up with the new car traffic and more than it is not impossible.

For the prophetic auto companies, the used car market will be as important as the development of the Midwest auto market. In the past few years, Shanghai GM, Dongfeng Nissan and FAW Toyota have launched their own used car business. This, to a certain extent, shows that the used car market in China is on the eve of awakening, and as the first generation of private car owners enters the peak of shifts in the next decade, the used car business will grow rapidly.

Feature 4. Farewell to the time when cars dominate

In the past decade, Chinese auto consumers have begun to bid farewell to the era of dominance of cars, and more personalized models have entered China. SUVs, MPVs, cross-border cars, and sports cars have all become Chinese consumers' choices.

It is believed that in the next decade, the era of China's automobile personalization will be further deepened. Coupes and exquisite cars that are popular in foreign countries will be popular in China.

The arrival of the era of personalized car purchase will also test the wisdom and ability of domestic and foreign auto companies in responding to consumers. Those eras that can be sold in China as long as they are cars can become history.

Features 5. Car prices from "connecting to the world" to "connecting with China"

It's hard to imagine that Santana could sell to the price of today's Accord ten years ago in the Chinese auto market. The Accord may be more expensive than today's Mercedes, but now, after ten years of blood-fire and baptism, China's auto prices All the way down, and now, although the price of some models is still high, there is no sound in the market that makes China's car prices in line with the world: In the past decade, everything has been rising, and only cars are cutting prices.

In early 2010, Shanghai General Motors released Chevrolet Sail in the Chinese market. The price of the lowest model was only about 50,000 yuan, equivalent to only 8,000 US dollars. The world's largest brands and mainstream A0 sedans were priced at only 8,000 US dollars, which means that China The price of the auto market may become the benchmark for global auto prices in the next few years. After all, there are the most competitive labor markets and raw material markets in the world. Here, Japan’s Toyota, the crazyest cost madman, feels the cost war. The shudder Geely and Chery cars.

Feature 6. New energy vehicles have become an important force in the market

Although foreign car giants have introduced new energy vehicles since the 1990s, in the past decade, new energy vehicles have also come to the Chinese automobile market, including Toyota, Honda, GM, and Chinese domestic BYD autos. All new energy vehicles are sold in the Chinese market. However, the sales of these models are generally not high, and new energy vehicles have become more of an overview in the Chinese market. Such despicable end is also quite impressive, of course, new energy sources. The reason for the inefficient promotion of cars in China is that apart from the small number of models that can be selected, high prices are also an important reason.

However, in the next ten years, it is believed that the development of new energy vehicles in China will go on track. The state is planning to introduce subsidies for ordinary consumers to purchase new energy vehicles, and a group of more mature and more competitive new energy vehicles. It will also land on the Chinese auto market. Nissan LEAF, Chevrolet Volt, and Toyota Prius will be the representatives of these models. We believe that in the next decade, new energy vehicles will become an important force in the automotive market.

Features 7. The car market is no longer "anyone can play paradise"

The Chinese market in 2000 can be described as a white paper for domestic and foreign auto companies: The private auto consumption market is gaining momentum. The distinction between Chinese people's auto brands and models is basically equal to zero. The major auto companies in China are in full swing. Looking for partners... For the international auto companies at that time, the Chinese auto market is a “paradise for anyone to play”.

However, after ten years of development, Chinese auto consumers began to mature rapidly. They already had their own understanding of the brand, and they also had their own understanding of the model. In other words, Chinese auto consumers have started from the year’s price loyalty. With brand loyalty transfer, I believe that in the next ten years, the brand awareness and loyalty of Chinese auto consumers will further increase. Those auto companies that have failed to operate their own brands and build their own brand characteristics in China in the past decade, Faced with the risk of being abandoned by the market, some companies may even stage a desperate exit from the Chinese auto market.

Feature 8. The interpretation of policies on the auto market will become clearer

In the past ten years, we can profoundly feel that the rapid development of the Chinese auto market has caught the attention of the relevant departments' policies. This has brought a series of problems to automobile consumption, urban transportation, urban environment and energy consumption. To some extent, we can think this way: In the past ten years, the residents of Beijing, Shanghai, and Guangzhou in China have entered the auto society in advance, but the policy's understanding of this society has been delayed. However, this situation will change in the next decade, the government’s understanding of the auto market is deepening, and the frequency of action is also accelerating. The government departments and local governments at all levels are trying to understand and plan the new features of the automobile society. The rapid integration with the international community reflects the intervention in the automotive market and consumption.

The fact that the country in Beijing broke out on January 26 may impose an exhaust gas tax on automobiles can be described as an important message that the Chinese government is increasing its interpretation of the automobile society. Before that, national policies have also repeatedly released an understanding of the automobile market. I believe In the next decade, our understanding of policies and interventions in the auto market will no longer be significantly delayed. China will truly enter the automotive society and the automobile era from the top down.