AUTOMOTIVE The Slowdown and the Stimulus · 2016. 10. 26. · Lin Huaibin, Manager, China Light...

© 2016 IHS Markit. All Rights Reserved.© 2016 IHS Markit. 版权所有。

The Slowdown and the StimulusChina Demand Outlook

AUTOMOTIVE

Lin Huaibin, Manager, China Light Vehicles Sales Forecast+86 21 2422 9061, [email protected]

27 October 2016 | Shanghai

© 2016 IHS Markit. All Rights Reserved.60

Chinese GDP growthSlowing down gradually over years, not collapsing overnightGDP development 2006–16

© 2016 IHS MarkitSource: IHS Markit

0

2

4

6

8

10

12

14

16

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Perc

ent c

hang

e

GDP Growth2016: 6.6%2017: 6.2%2018: 6.4%

Automotive Conference – Shanghai | October 2016

© 2016 IHS Markit. All Rights Reserved.

How much payback should we expect in 2017?

-0.2

-0.1

0

0.1

0.2

0.3

0.4

0.5

<1.6L >1.6L



Total industry volume

• Vehicle Purchase Tax cut from 10% to 5% for vehicles (1.6L and below) in October 2015–December 2016

• Improving GDP growth of 6.6% in 2016

17.0 17.618.6

21.423.1

24.426.0 26.2 27.0

28.329.7

30.7 31.6 32.3

0%

2%

4%

6%

8%

10%

12%

14%

0

5

10

15

20

25

30

35

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Mill

ion

s

• GDP growth to trough out from 2018 with an average growth of 6.4% in 2018–20

• Supported by replacement demand coming from scrappage of vehicles (Euro I and below) in 2014–17

• The government could usher in vehicle demand management because of rising energy security concerns

• Termination of tax incentives

• GDP growth rate of 6.2% in 2017



When will the JV share cap be lifted in the auto industry?

724 727 835

1,083

950

1,147 1,240 1,211

1,239 1,285 1,356

123 212

265

559 565

688 747

878

1,010

1,231

1,457

17%

93%

0

0.2

0.4

0.6

0.8

1

1.2

0

200

400

600

800

1000

1200

1400

1600

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

FDI inflow FDI outflow Outflow as % of inflowUnit: 100 million USD

Sources: UNCTAD; ( ) refers to Outward Investment Ranking by Country. China excl. Hongkong and Taiwan

2005-2013 CAGR:28%

344 7619 19 18 12 23



The day of JV share cap to be numbered



Body types diversitySUV sales keep expanding over proportionally in the long term

13%

47%15%

11%10%36%

34%

13%

9%

4%

SUV HatchbackSedan WagonMPV CoupeConvertible Roadster

38%

44%

3%7%4%

45%

39%

8%3%

3%

SUV SedanHatchback MPVCoupe WagonConvertible Roadster

12%

65%

18%

5%

44%

39%

8%8%

1%

SUV SedanHatchback MPVWagon CoupeConvertible

2010

China North America Europe

2010 2010

2025 2025 2025



IQS between domestic and international OEMs narrowed again in 2016…

396

142 153191 185 190 179

139 145 116 89 101 9551 36 22 14 0

0

100

200

300

400

500

600

700

800

900

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2018

GAP Chinese OEMs IQS International OEMs IQS

66

Source: JD Power

Unit: Problems per 100 Vehicles



Would the Chinese OEMs’ share continue to rise?

67

2.32.4

2.73.1

3.2

2.92.6

2.2 2.2 2.1 2.1

30.6%

27.5%

26.7%26.6%

25.2%

30.5%

33.2%31.3% 31.6% 31.8% 32.0%

0%

5%

10%

15%

20%

25%

30%

35%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Mill

ion

s

Sales of JV cars based on old platform Chinese OEMs market share (as % of PV)

Citroen C-Elysee Hyundai Elantra VW Lavida Chevrolet Cruze Classic



IHS definitions of China city tiersTIER-1 TIER-1.5 TIER-2 TIER-3 TIER-4 TIER-5 TIER-6

Major Cities Beijing, Shanghai, Guangzhou, Shenzhen

Tianjin, Chongqing, Hangzhou, Suzhou

Changsha, Dongguan,Foshan, Qingdao

Changzhou, Changchun, Harbin, Shijiazhuang

Guiyang, Lanzhou, Luoyang, Handan

Anqing, Changde, Datong, Guilin

Aksu, Baiyin, Garzee, Puer

Number of Cities (%) 4 Cities (1.2%) 7 Cities (2.1%) 11 Cities (3.2%) 37 Cities (10.8%) 30 Cities (8.8%) 87 Cities (25.5%) 165 Cities (48.4%)

Location Core area of major economic zones

Key cities in coastal or central China

Important cities in coastal or central China

Important cities in coastal or central China

Most cities in Centraland West China

Most cities in West and Central China

Most cities in West and Central China

Total Population

70.7 million (6.5%) 98.8 million (9.0%) 72 million (6.6%) 177.4 million (16.2%) 98.3 million (9.0%) 278.6 million (25.5%)

295.7 million (27.1%)

GDP (%) 8,354 billion yuan (11.8%)

8,824 billion yuan(12.5%)




12,754 billion yuan (18.0%)

10,039 billion yuan (14.2%)

GDP per Capita (average)

125,000 renminbi 99,000 renminbi 90,000 renminbi 64,000 renminbi 45,000 renminbi 42,000 renminbi 28,000 renminbi

2015 PVSALES

1.2 million (6.4%) 2.2 million (11.8%) 2.5 million (13.3%) 4.5 million (23.8%) 2.1 million (11.2%) 3.4 million (17.9%) 3.0 million (15.7%)

68



Economy vs. car sales: City tier developmentTier 4–Tier 6 cities market shares increase with Tier 1 share declining

T113%

T1.513%

T213%

T324%

T410%

T515%

T612%

T16%

T1.512%

T213%

T324%

T411%

T518%

T616%

T112%

T1.512%

T212%

T321%

T411%

T518%

T614%

T112%

T1.512%

T212%

T321%

T411%

T518%

T614%

2010

GDP share by city tier 2010–15

2010

2015

2015

PV market share by city tier 2010–15



Are Tier 4-6 cities the new El Dorado?

T14% T1.5

8%

T29%

T321%

T412%

T524%

T622%

Where are the +11k new dealers? Q2 2016 vs 2013

0%

5%

10%

15%

20%

25%

T1 T1.5 T2 T3 T4 T5 T6

2015 dealer share Y2015 sales share

City tier dealer share vs. city tier sales share

T4-T6:58%



Dealer throughput 2013–15: Profitability pressure not only for dealers but ultimately for OEMs/suppliers

872

1,230

1,048

925 908

813846

929

636

942 923

773733

654 662746

0

200

400

600

800

1000

1200

1400

T1 T1.5 T2 T3 T4 T5 T6 National

778 784 773 771

660 656

719

812

874921

945

0

100

200

300

400

500

600

700

800

900

1000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

US dealer throughput 2005–15China dealer throughput 2013–15 by city tier



New OEM entrances and brand expansionNew entrants from other industries drive brand expansion

Existing small OEMs

Mega tech companies

New OEMs

Sharing economy

Brand number

2000 2010 2015 2025

25 62 78 94

Premium brands 234 2019



354

915

435 463 448

233282

463

0

100

200

300

400

500

600

700

800

900

1,000

United… China Japan Germany France India Brazil Russia

73

Product nameplates for sales OEMs moving to emerging market quickly to gain customersNumber of nameplates 2006–23




Economics of pepper

-1.03.4

5.76.66.66.76.76.76.7

7.17.27.27.37.47.57.67.77.87.98.08.08.18.28.28.38.3

8.69.19.2

10.510.610.6

-2 3 8

Liaoning

Heilongjiang

Yunnan

Beijing

Jilin

Guangxi

Shandong

Sichuan

Zhejiang

Ningxia

Xinjiang

Jiangsu

Fujian

Anhui

Tianjin

Chongqing

GDP growth by province H1 2016(%)



Car sales by provinces: Is pepper still hot?

23%18%

17%16%

16%15%

13%13%

13%13%

10%10%10%9%

9%9%

8%8%

8%7%

7%6%

6%5%

5%3%

3%2%2%

1%1%

0%

0% 5% 10% 15% 20% 25% 30%

GUIZHOU

GUANGDONG

TIBET

ANHUI

GUANGXI

BEIJING

YUNNAN

JIANGSU

National

CHONGQING

INNER MONGOLIA

ZHEJIANG

FUJIAN

HEBEI

NINGXIA

SHANXI

2016 YTD PV sales y/y (%)

55%

45%

As % of national total



0123456789

1011

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Electric Plug-in hybrid Full hybrid Mild hybrid

76

NEV development in ChinaEV demand is exploding in the near future; hybrid as main driver in the long termEV/hybrid PV production in China


Mill

ions

48V system will be the first priority option in the mild

hybrid sector

EV might NOT be market dominator despite strong

stimulus policy today

Inception period Development period



Car sharing growing rapidly but business models challenged with lack of profitability

With Drivers

In Chongqing from Apr 2016 with 400 cars



Is car sharing becoming a real threat to vehicle demand?: What P2P tells us

92%

8%

No. of models by brand positioning

Mass Luxury

71%29%

No. of models by car age

>=3 yrs <3 yrs

84%

5%11%

No. of models by body type

Sedan MPV SUV

Source: AT Zuche,PP Zuche as of Sept 2016

Total No of cars:+17kCities Covered: 22



Car sharing, or really?


IHS MarkitTM COPYRIGHT NOTICE AND DISCLAIMER © 2016 IHS Markit.

No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent of IHS Markit. Content reproduced or redistributed with IHS Markit permission must display IHS Markit legal notices and attributions of authorship. The information contained herein is from sources considered reliable, but its accuracy and completeness are not warranted, nor are the opinions and analyses that are based upon it, and to the extent permitted by law, IHS Markit shall not be liable for any errors or omissions or any loss, damage, or expense incurred by reliance on information or any statement contained herein. In particular, please note that no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any projections, forecasts, estimates, or assumptions, and, due to various risks and uncertainties, actual events and results may differ materially from forecasts and statements of belief noted herein. This presentation is not to be construed as legal or financial advice, and use of or reliance on any information in this publication is entirely at your own risk. IHS Markit and the IHS Markit logo are trademarks of IHS Markit.

IHS Markit Customer Care:[email protected]: +1 800 IHS CARE (+1 800 447 2273)Europe, Middle East, and Africa: +44 (0) 1344 328 300Asia and the Pacific Rim: +604 291 3600

AUTOMOTIVE The Slowdown and the Stimulus · 2016. 10. 26. · Lin Huaibin, Manager, China Light...

Documents

Transcript of AUTOMOTIVE The Slowdown and the Stimulus · 2016. 10. 26. · Lin Huaibin, Manager, China Light...