· Imported car first drop in ten years: 2016 will continue to destock

China's imported car market has entered a new pattern of rapid decline from sales to sales decline. According to public data, China's auto imports in 2015 were 1,067,300 units, down 25% year-on-year. This is the first time that auto imports have declined in a decade.

From the annual trend of China's imported car customs import volume in the past 10 years, 2006-2011 is the period of rapid expansion of imported cars in China. Due to the rigid demand of consumers and the competition of imported car mass production, the import volume of imported cars has reached one million. Magnitude.

With the oversupply situation in the imported car market from 2012 to 2014, after the fourth quarter of 2014, the sales of imported cars fell sharply. In 2015, there was a double drop in supply and demand, and the import volume exceeded expectations.

“We have previously predicted that the growth rate of the imported car market will slow down in 2015, and the result is a 25% decline. This is unexpected. Starting from 2015, the imported car market will enter a new structural adjustment period.” On January 5, Wang Cun, deputy director of the Information Department of the Imported Vehicles Professional Committee of the China Automobile Dealers Association, said in the analysis of the situation of the automobile circulation industry in January 2016.

“In 2015, the fists of dealers who went to stocks seemed to be hit on cotton, and they were hit back by the terminal sales price. The demand for the entire imported car market has declined, so in the case of double supply and demand, destocking is an inevitable choice.” Wang According to the deposit, dealers are in destocking in 2015, but because of the decline in terminal demand, inventory has not decreased significantly, so the import of car dealers in 2016 is still a problem.
The imported car market has fallen across the board

“The imported car market has always been the vane of the Chinese auto market, but the imported car supplier’s judgment on China’s auto market is too optimistic, and this has fallen sharply. We judge that the performance of the entire imported car market in 2016 will continue the current situation. This also requires the importer to re-judgment from the structure." On January 5, Xiao Zhengsan, secretary general of the China Automobile Dealers Association, expressed pessimism at the monthly analysis meeting of the association.

The increasingly rational consumption concept of Chinese consumers and the increase in the proportion of luxury cars sold to “domestic to domestic” are also the reasons for the falling market share of imported cars.

According to the "2015 China Imported Automobile Market Annual Report" and the "China Imported Automobile Market Trends and Development Strategy Report" issued by China Import Automobile Trading Co., Ltd., the imported car market will face an increase in the price of automobiles and a large area of ​​dealers. Structural problems such as losses.

Previously, Hu Siyu, director of the Imported Vehicles Professional Committee of the Automobile Circulation Association, predicted that according to the current situation of double supply and demand, the imported car brand business will return to the market-oriented position in the medium and long term.
It is worth noting that China's imported car structure began to adjust, brand structure adjustment continued to deepen, Mercedes-Benz and Porsche imports achieved positive growth, BMW and Mercedes-Benz ranked the top two on the card, the second echelon's competition pattern changed a lot.

Imports of the three major models fell across the board. Cars fell sharply by 25.06% year-on-year, SUVs fell by 24.4%, and MPVs fell by 10.6%. In addition, the shift in displacement is a major trend in the development of imported vehicles. The share of imported models with displacements below 3.0L has occupied 93.3% of the market, and the 1.5-2.0L displacement range driven by the new compact SUV models has become the mainstream. With the introduction of the 1.6L small displacement vehicles in 2015, the row The share of imported cars also rose from 2% to 6.1%.

“Under the high inventory, the imported car was sold at a discount of 10% in 2014. At that time, the discount was already very large. I did not expect the price drop in 2015 to be as high as 14.2%. The purchase tax for 1.6L and below is halved. It is good for imported cars, but this policy has limited incentives for the imported auto market." Wang Cun said.

Affected by the 8-12 Tianjin Port (9.320, -0.07, -0.75%) big bang, China's import port share has also been slightly adjusted. Data show that in 2015, the market share of imported cars in Tianjin Port fell from 40.8% to 30.1%. Driven by some brands to Hong Kong, the Shanghai Port share increased to 38%, and in September 2015 it reached a historical peak of 52%.
"Although the import volume of Tianjin Port has rebounded in the later period, some brands have turned to Hong Kong. It is difficult for Tianjin Port to recover to more than 40% of the shares, and it will take time." Wang Cun said.

Parallel import market share is difficult to expand

The structural adjustment of imported cars is very complicated, especially the system adjustment time is longer. However, the deep structural adjustment of the imported car market is inevitable. "The manufacturers have indeed adjusted, but this adjustment is not enough to support the dealers to develop better." Xiao Zhengsan said.

If the responsibility for the large-scale decline in imported cars in 2015 is that suppliers have overestimated the Chinese market, in terms of supply methods, authorized dealers and distributors bear excessive inventory.

Wang Cun said, "If from the perspective of the parties, the responsibility is in the general dealers and manufacturers, but this is a system problem. From the goal of issuing the 2016 target, after the target is set, it will go through multiple links in the middle of resource allocation. When the manufacturer takes action, the Chinese company reports to the headquarters, the headquarters makes production adjustments, and the production is rhythmical. It can't stop. Once the factory equipment is stopped, it needs to be re-adjusted and it will take more time."
"The existing parallel importers, there is no huge dealer network, more wholesale and retail, the market sensitivity is very strong, the price is changing day by day, so the whole decision-making process or system is much smaller, so time, decision, adjustment The speed will be much faster.” Wang Cun said that this makes parallel imports, less the most complicated manufacturing process, no need to purchase, directly picking up the car from the dealer, the efficiency is effectively improved.

Parallel imports performed very well in the case of a 25% sharp drop in imported cars. Data show that from January to October 2015, parallel imported cars sold more than 100,000 units, and the market share increased from 7.7% to 10.5%. Some experts predict that with the advancement of CCC certification, parallel imports of cars will have a favorable situation.

On January 6, the Ministry of Commerce issued a signal through the "Automobile Sales Management Measures (Draft for Comment)", which intentionally liberalized the parallel import sales method. The person in charge of the Foreign Trade Department of the Ministry of Commerce said that the number of pilot vehicles for parallel import of cars in the four free trade zones in China has reached 78. The Ministry of Commerce has applied for automatic import licenses for parallel imported cars to pilot enterprises. There is no brand authorization requirement. Any import limit.
However, due to imperfect after-sales service and parts supply system, there are still many problems in parallel imported cars. For example, some multinational auto companies have increased the control of parallel imports of automobiles in order to strengthen the control of foreign dealers, refused to guarantee the parallel imported cars, and adjusted the engine displacement.

In addition, parallel imported cars and China's current customs clearance, taxation, inspection, compulsory product certification, environmental standards and "three guarantees" and "recall" and other institutional policies have not yet fully integrated.

The price advantage that once attracted the most consumers, as the domestic luxury brands continue to reduce the price of new cars, the import of hot-selling models and domestic factors, the market space of parallel imported cars is constantly being squeezed.

Xiao Zhengsan does not seem to be optimistic about the future of parallel imports. “For multinational companies, will it disrupt the market of hundreds of thousands of vehicles for the parallel import sales of less than 10,000 vehicles? So at present, the market for parallel imported cars The share is not too big."

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