Auto consumption taps the potential to unearth new opportunities

The recent central and local policies to promote automobile consumption are undoubtedly the focus of the industry's most attention. The policy of "making what you can do" not only further unleashes the potential of automobile consumption, but also brings many new opportunities to China's automobile industry.

From the perspective of the industry, this round of policies to promote automobile consumption is fast and wide-ranging, and the policy strength exceeds market expectations. The reason is that consumption is the main driving force of the economy and an important driving force for the current economic operation to return to the right track. It is the top priority because the automobile industry has a long chain and a wide range of radiation, and is one of the pillar industries of the national economy. Key areas to drive consumption. Indeed, despite the unfavorable factors such as the epidemic and the shortage of raw materials, the unexpected policy brought more than expected market enthusiasm. Not only did the capital market respond enthusiastically, but the auto market in various places also showed a booming new situation. Consumers who buy cars have taken action under the "single-step" policy to promote automobile consumption, and related markets such as automobile services have also been driven. It is predicted that the implementation of the policy will increase automobile and related consumption by about 200 billion yuan this year.

Behind the bustling market, the upstream and downstream of the automobile industry chain also ushered in new opportunities: not only the demand for automobiles itself, but also the upstream raw materials, parts, and automobile "aftermarket" such as repair, maintenance, insurance, finance and other industry development. It is not difficult to find that this round of policies to promote automobile consumption is most beneficial to new energy vehicles. Although subsidies are gradually declining, the support and guidance of supporting policies for new energy vehicles are being strengthened. For example, the "exemption of the new energy vehicle purchase tax policy" is conducive to stabilizing consumer expectations and boosting consumer confidence, thereby further stimulating the consumption of new energy vehicles, while "activating the used car market" will help preserve the value of new energy vehicles that have been troubled for a long time. The problem of low rate will bring improvement, which is expected to revitalize the stock of new energy used vehicles and promote the iterative consumption of new energy vehicles. In addition, policies to promote consumption such as cars going to the countryside are also favoring new energy vehicles.

The opportunities for new energy vehicles are so obvious, and from a higher dimension, we can see that the booming new energy vehicle market in China is attracting the global new energy vehicle industry to accelerate its agglomeration to China. According to media reports, the three major German luxury car manufacturers BBA (Mercedes-Benz, BMW, Audi) recently held a new plant commissioning or groundbreaking ceremony in China at the same time, which has not happened in the past ten years. Car companies are expanding in China with electric vehicles. What attracts international auto giants is not only China's super-large market, but also China's technology and China's industrial chain advantages. Taking batteries as an example, in 2021, the installed capacity of power batteries in China will account for more than half of the total installed capacity in the world, and China will account for 6 of the world's top 10 power battery manufacturers. "New Heart". Especially in technology, the most important arena for new energy vehicles, the energy density of the latest "Kirin battery" released by CATL (300750) exceeds that of Tesla's 4680 battery, indicating that the technical strength of China Power (600482) battery companies has stabilized The world's first echelon has begun to surpass not only in terms of production scale, but also in technology.

On the basis of the first-mover advantage, Chinese companies are seizing the historic opportunity of the new energy track. The data shows that in terms of electric vehicle sales, Chinese electric vehicle companies have obvious global advantages. Among the world's best-selling electric car brands in April, BMW, Mercedes-Benz, Volkswagen, and Audi sold a total of 68,617 units, which is less than the sales of BYD (002594). In the first five months of this year, China's auto exports exceeded one million, with a year-on-year increase of more than 40%. This was achieved when the epidemic affected the auto supply chain and caused some factories to stop production. Cui Dongshu, secretary-general of the Passenger Federation, said recently that it is estimated that the annual export volume of automobiles in 2022 will be close to 3 million vehicles, which will likely exceed Germany. In fact, some data show that in the first four months of this year, China's auto exports have surpassed Germany and jumped to the second place.

As the British "Financial Times" recently wrote, electric vehicles have accelerated China's rise as a major auto exporter, and a larger trend has begun. If batteries replace internal combustion engines and China dominates auto production, its disruptive will be great.