The "semi-annual report" of China's auto industry has been released one after another. Under the "big test" of the epidemic, the performance of China's auto industry has been hard-won, and the monthly performance is gradually improving. China's purchasing Managers' index (PMI) of the manufacturing industry in June was 50.9%, up 0.3 percentage points from the previous month. Among them, the expected index of production and operation activities of the automobile manufacturing industry has been higher than 60.0% for two consecutive months, and the second quarter performance "exceeded expectations"; In the auto industry, which has been hit hard by the epidemic, the monthly accumulative year-on-year decline of major indicators is still in the mire of deep decline, and it is still hard to return to the normal level.

Industrial added value increased by 13.4 percent

With the deepening of the resumption of work and production, automobile production gradually resumed and improved. In February, when the epidemic was raging, the production stopped and the output of 284,500 units dropped to 79.83%. In April, 2.101,600 vehicles were sold, down 2.26 percent from a year earlier; in May, 2.187,400 vehicles were sold, up 18.20 percent; and in June, 2.235 million vehicles were sold, up 22.48 percent. In June, auto production averaged 77,000 vehicles per 30-day day, the fastest pace since June 2019. SUV, heavy truck and light truck created miracle growth rate, reaching 25.76%, 96.78% and 99.12% respectively.

The growth rate of added value of automobile manufacturing industry also accelerated. In April and May, it increased by 5.8 percent, 12.2 percent and 13.4 percent respectively, 8.6 percentage points higher than the national growth rate of industrial added value above designated scale (4.8 percent), which is the highest level for each month since the second half of 2018.

Retail sales increase contributed to social consumption

Automobile consumption plays an important role in the social consumer goods market. The impact of automobile consumption shock on retail sales of goods above quota and even the whole social consumption cannot be underestimated.

During the window period of auto country 5 and 6 switching last June, manufacturers sold cars in great sale to promote the inventory of Auto country 5. In that month, the retail sales of auto products increased by 17.2% sharply, driving the total retail sales of consumer goods increased by 9.8% year-on-year in the same month, which became a beautiful talk of the auto market at that time. In June this year, the retail sales of automobile products increased to 361.2 billion yuan, which narrowed the decline of the retail sales of consumer goods from -15.6% in March to -1.0%, contributing 14.6 percentage points to the contraction. In the first half of the year, the retail sales of automobile goods narrowed to -15.2% from -30.3% in the first quarter, making the decline of the retail sales of social consumer goods narrowed to -10.9% from -17.7% in the first quarter, a contraction of 6.8 percentage points compared with the first quarter.

The increase or decrease of social retail sales of consumer goods, the positive or negative growth rate or high or low, are closely connected with the "nerve" of retail sales of automobile goods. China News Service reported that in May, the retail sales of vehicles with sales quota and above increased by 5.9% from 2.6% in April, which boosted the sales of vehicles with sales quota and above by 1.3 percentage points in The same month. As a result, the decline of the retail sales of consumer goods was greatly narrowed. Many provinces and regions have witnessed a good phenomenon just like that in Fujian. Therefore, the country and the local will promote the automobile consumption as one of the main forces to expand social consumption.

Total profits fell sharply

The total profit of the automobile manufacturing industry in the first five months of This year was 119.35 billion yuan, still down 33.5% year on year, but compared with the previous April (-52.1%) and the first quarter (-80.2%), the profit narrowed 18.6 percentage points and 46.7 percentage points respectively, showing a significant improvement. Total profits in the first half of the year, will be announced at the end of July, with the first half of the decline in the trend of narrowing, the decline will be further narrowed to less than 30%, is a large probability.

The decline in the total profit of the whole industry was much higher than the decline in operating income (-13.6%), and the industry experienced a great decline in efficiency, which seriously affected the production and operation activities. The growth rate of profit was not as fast as the revenue. The reasons were as follows: automobile production and sales declined by double digits; PPI of automobile products was hovering between 0.5% and 0.6%; and financial expenses grew at an extremely high rate. More 17 key factors of the large group of car, a big difficulty, return on investment (20.11 billion yuan) fell 35.1%, revenue (1.33708 trillion yuan) fell (13.6%) is greater than the cost drop (13.2%), profit ($65.1 billion) a drop in the abyss of - 43.7%, etc., have no to the support of the industry, the pace of progress is to drag down the industry.

Getting back to normal requires hard work

The epidemic has hit the auto industry hard. In the first quarter, automobile output fell by 45.23% year-on-year, and the growth rate of added value fell to -26.1%. In the second quarter, the decline narrowed, from January-April to 15.0%, from January-May to 7.9%, and from the first half of the year to 3.1%. The auto industry's capacity utilization rate, which rose to 74.6% in the second quarter from a miserable first quarter due to the shutdown, remained at a recent low of 66.8% in the first half, 4.3 percentage points lower than the national industrial capacity utilization rate of 71.1%.

The market share of Chinese-branded passenger cars has been falling for the past two to three years, exacerbated by the coVID-19 outbreak. The market share of Chinese brand passenger cars in June dropped 17.1 percentage points compared with the record high in February 2010. Market share in the first half of the decline in the trend of expansion. Sales of new energy vehicles were significantly lower than those of traditional energy vehicles, with production and sales dropping by more than 30%. Some people said that Chinese brand cars and new energy vehicles have become a pair of "brothers" in the car market.

It will take a combination of domestic and overseas efforts to stop the decline in auto retail sales, which slowed to 15.2% in the first half of the year. Stock cars should be exchanged for used cars and scrapped cars on both sides of the road, not only to develop their own market, but also to promote new car sales. The automobile market should be encouraged by the central and local governments to create a new market bureau.