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After the end of the auto market favorable policy at the end of 2010, the mini vehicle market fell completely. The sales of Changan Automobile and SAIC-GM-Wuling which accounted for over 70% of the mini vehicle market in the country all experienced negative growth in sales in February 2011. Such changes in the market are for other auto companies that just launched the mini-vehicle project in 2010. It is not a small blow.
On the evening of March 10, 2011, Changan Automobile disclosed February sales and sales data that showed that the company produced 125,903 vehicles in February, but it was 15,60,35 units in the same period of 2010. In February, it sold 143,087 vehicles in the same period of 2011 as 159,060 units. Both production and sales declined year-on-year.
In the first two months of 2011, Changan Automobile produced 308,990 vehicles, compared with 340,565 units in the same period of 2010; sales were 342,701 units, compared with 357,439 units in the same period of 2010.
It is also the leading company in the field of domestic micro-vehicles. SAIC-GM-Wuling also saw negative sales growth in February 2011. In February, it achieved sales of 101,892 vehicles, a year-on-year decrease of 6.67%.
Thanks to the tax reduction policy for the purchase of automobiles and small-displacement vehicles, domestic mini-vehicle companies have developed rapidly in the past two years, of which SAIC-GM-Wuling has achieved sales growth of more than 100% in 2011. Microcars are an important contributor to the dramatic increase in the total number of passenger vehicles in the country in 2010.
From January 1, 2011, purchase tax reductions and car-to-country policies have come to an end. Industry insiders believe that the impact of favorable policies on micro-vehicles in passenger cars is the biggest compared to cars and other models.
According to the latest data from the China Association of Automobile Manufacturers, in the first two months, the number of crossover passenger vehicles sold was 461,900, a year-on-year decrease of 3.09%, which was the only segment of the passenger car that experienced a year-on-year negative growth.
Micro-vehicle consumers are mainly concentrated in the rural market. Two favorable policies are superimposed. A car can save 3,000 to 4,000 yuan. For a micro-car with a total price of only 30,000 yuan, it occupies a large proportion.
In the overall sales of micro-vehicles, micro-vehicles belong to relatively large vehicles. The mini-vehicles' collective decline will easily pull down the growth of passenger vehicles, which will affect the entire auto market. According to the data from the China Automobile Association, the domestic automobile production and sales in February 2011 were 1,260,300 and 1,267,700, respectively, an increase of 4.48% and 4.57% year-on-year, respectively, a decrease of 29.89% and 33.09% from the previous quarter.
But this is not the worst. The industry experts are even more concerned about the fact that many auto groups had previously launched micro-vehicles. If the market is not good and the capacity expansion is too fast, it will put pressure on the business.
At the end of 2009, Haima Motors announced the completion of the second factory of the micro-micro and micro-car bases in Zhengzhou. Its first micro-customer product, Fu Shida, sold 30,000 vehicles that year. Shaanxi Automobile also entered the ranks of micro-vehicles and developed a new platform, with a production capacity of 100,000 units in the first phase and 300,000 in the second phase. The production capacity of the Gonow Xiaoshan Microcar Base, which was acquired by GAC Group, was 250,000 vehicles. GAC Group attaches great importance to this. Beiqi also determined that the micro-vehicle base in Hunan Zhuzhou is an important pawn for its own brand strategy.
In the past, the sales of mini-vehicles have caused many domestic auto makers to see the prospect of rapid sales growth. However, this is undoubtedly a big shortcut in the domestic auto industry that is based on economies of scale, but it is also a risk.