How economists view the changes in the auto market

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At present, although the “core shortage” hinders the recovery of the auto market, the downward pressure on the economy is the fundamental reason for the low-level operation of auto consumption.

When some institutions and media called on relevant departments to introduce policies to promote consumption, recently, at the “2021 China Auto Finance Industry Summit” hosted by the China Automobile Dealers Association, Wang Zhe, senior economist at Caixin Think Tank, entitled “Auto Consumer Credit and Finance” The “Supervision” speech opened up a new perspective for the industry.

The “epidemic market” has become a thing of the past

In August, the decline in automobile production and sales further expanded. Experts from the China Automobile Association explained: “In addition to the shortage of chips, it is related to the higher base in the same period last year.” The reason for the higher base in the same period last year is that the epidemic has temporarily come to an end and the economic recovery drives automobiles. Consumption is picking up, which is called the “epidemic market” by senior experts.

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In December last year, at the “2020 China Auto Finance Industry Summit”, Wang Zhe gave a more detailed explanation of the auto epidemic market. He analyzed: “Due to the epidemic, the public wants to reduce public transportation trips. Some people will buy cars in advance, which has driven the growth of car sales. Many car companies have very good business performance this year. At the same time, car consumption and other consumption categories in 2020 In comparison, the reality is very good. 2~3 years ago, as a representative optional consumption, automobile completely surpassed other optional consumption such as gold and silver jewelry and clothing. This year, automobile consumption has outperformed others. Optional consumption has become second only to food consumption.”

At the 2020 conference site, I clearly remember that seeing people in the automotive industry show joy, Wang Zhe reminded everyone: “Auto growth benefiting from the epidemic is a short-term market.”

The auto market is strongly related to the macro economy

Sure enough, the auto market in the first half of this year entered a downward channel after a short period of temperature rise. If the absence of the “Golden Nine and Silver Ten” in the auto market is largely due to the “chip shortage”, then the long-term downturn in auto consumption is closely related to the macro economy.

In Wang Zhe’s view, China’s economy has gone through the dividend period after its accession to the WTO in 2001, the low period of the global financial crisis in 2008, and the subsequent recovery period of a series of stimulus measures, and it has entered a new normal of slowing growth.

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Wang Zhe pointed out: “What determines consumption? It is the fundamentals of income. How many cakes we will buy in the next stage depends on how many cakes we made in the previous stage, how fast the cakes increase, and how the distribution of the cakes is. If we draw the curves of residential consumption and automobile consumption, we can see that they have gone out of a very obvious downward trend in the past 10 years. Since automobiles are bulk commodities, the frequency of purchase is low, and they are easily affected by policies, taxes and other policies. The fluctuation of automobile consumption is larger than that of household consumption, but the downward trend of the two is very consistent.”

In short, while the economic downturn has seen a structural slowdown in consumption, auto consumption has also been on a downward channel for a long time.

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