Still at the bottom! Institutions predict that the automotive industry will gradually emerge from the worst period in the second half of the year

Automotive industry predicted to recover from worst period in second half of year Still at bottom currently

【PhoneAuto News】Recently, one after another, news of price cuts and subsidies for cars has been announced, but the positive impact on car sales has not continued. On the other hand, although the sales of new energy vehicles have been increasing, it cannot save the decline of the entire automotive industry. According to PhoneAuto, some organizations predict that the automotive industry will gradually emerge from its worst period in the second half of this year.

According to a report by CITIC Securities, the domestic demand of the automotive industry was under pressure in the first quarter of this year, and it is expected that the industry will gradually emerge from its worst period in the second half of the year. This year, the overall operating strategy of automobile companies will return to rationality, and cost reduction and cash flow will become the main theme.

According to data from the China Association of Automobile Manufacturers, from January to April 2023, the wholesale sales of domestic passenger cars reached 6.95 million units, an increase of 6.9% year-on-year, and the retail sales reached 5.6 million units, a decrease of 1.1% year-on-year. Among them, the wholesale sales of new energy passenger cars reached 2.1 million units, an increase of up to 42% year-on-year, and the penetration rate of new energy vehicles increased to 30.2%. CITIC Securities summarized that at the beginning of the year, the automotive industry was affected by the reduction of purchase tax and the withdrawal of new energy subsidies, showing weak demand and intensified competition, and the pressure of destocking brought about by the implementation of the RDE testing regulations. The industry had a large-scale price war in the first quarter of this year. Considering that car demand is gradually emerging from the overdraft period, and the RDE testing regulations have added a six-month transition period, the industry has already emerged from its worst period and is expected to gradually recover to normal from May onwards.

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Although the automotive industry will develop well in the second half of the year, the outlook for the whole year may not be optimistic compared to last year. According to PhoneAuto, CITIC Securities has lowered its forecast for China’s automotive wholesale sales in 2023 to 26.09 million units (originally predicted to be 28 million units), of which passenger cars are 22.09 million units (a year-on-year decrease of 6.2%), and commercial vehicles are 4 million units (a year-on-year increase of 21.2%). However, the export of passenger cars is a major highlight of the automotive industry this year, and it will continue to be a factor that exceeds expectations this year. The organization predicts that it will achieve 3.65 million units for the whole year (a year-on-year increase of 43%). In addition, in terms of electrification, it is expected that the sales of new energy passenger cars for the whole year will reach 8.7 million units (a year-on-year increase of 33%).

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