A test paper on 22.28 million people working in China's auto industry gives people mixed feelings.
On January 13, 2025, the China Association of Automobile Manufacturers (CAAM) announced that in 2024, China's automobile production and sales will reach 31.282 million and 31.436 million respectively, up 3.7% and 4.5% year-on-year respectively. The production and sales volume hit a new high, maintaining a scale of more than 30 million for the second consecutive year.
On January 9, 2025, workers were assembling auto parts in the workshop of the Leapmotor smart factory in the new energy vehicle town of Jinhua City, Zhejiang Province.
Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, said on the same day that China's total automobile production and sales "have ranked first in the world for 16 consecutive years", and China's new energy vehicle production and sales "have ranked first in the world for 10 consecutive years", and "the expected annual targets have been achieved."
Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers, compared the data predicted by the China Association of Automobile Manufacturers in December 2023.
A year ago, the association predicted that total automobile sales in 2024 would be around 31 million, of which passenger cars were expected to be 26.8 million, commercial vehicles 4.2 million, new energy vehicles 11.5 million, and exports 5.5 million.
The result is that, except for the adverse deviation in the commercial vehicle forecast - nearly 330,000 units less than predicted, the overall sales, passenger car, new energy vehicle, and export sales in 2024 all exceeded expectations; in particular, passenger car sales were 27.563 million units, new energy vehicle sales were 12.86 million units, and export sales were 5.859 million units.
Automotive Business Review found through data that in 2024, there are eight major variables in the Chinese auto market that are worth digging for.
First, look for “new” growth.
The production and sales of new energy vehicles reached 12.888 million and 12.866 million respectively, up 34.4% and 35.5% year-on-year respectively, with sales accounting for more than 40%, an increase of more than 9 percentage points. Under the combined effect of favorable policies, abundant supply, lower prices and continuous improvement of infrastructure, new energy vehicles continued to grow.
Second, the eyes look for increments in “mixing”.
The proportion of plug-in hybrid (including extended-range) models will increase from 30% to 40% in 2023, while the proportion of pure electric vehicles will decrease from 40% to 30%. Plug-in hybrid vehicles are the only ones that have grown, becoming a new driving force for new energy vehicles.
Third, the "change" of eyes needs to be incremental, so change the track or method and try again.
From the perspective of the two major tracks of passenger cars, fuel vehicles and electric vehicles, the sales of traditional fuel vehicles are still mainly concentrated in the price range of 100,000-150,000 yuan, with a cumulative sales volume of 5.04 million vehicles, a year-on-year decrease of 14.1%. The sales of new energy passenger vehicles are still mainly concentrated in the price range of 150,000-200,000 yuan, with a cumulative sales volume of 3.375 million vehicles, a year-on-year increase of 19.2%.
At the same time, in the A00-class market where the sales of fuel vehicles have shrunk to less than 1,000 units, there is an opportunity for a second spring for 762,000 electric vehicles; in the D-class market, where fuel vehicles are the only one that maintains growth and has sales of less than 1,000 units, there is a blue ocean market for 255,000 electric vehicles.
Fourth, the eyes look to “self” for sales.
The sales share of Chinese brand passenger cars increased to 65%, up more than 9 percentage points year-on-year. Automobile groups such as SAIC, GAC, FAW, Dongfeng, and BAIC, which have declined due to joint ventures, should focus on their own sectors and make up for the shortcomings of joint ventures by shifting their main sales to their own sectors.
Fifth, the eyes depend on the “skin” for sales.
Pickup trucks, like cars, are imported products. They are called PICK UP in English and originated in the United States. They have been a popular model in Europe, the United States and overseas markets for a hundred years. In 2024, China's pickup truck sales will reach 548,000 units, a year-on-year increase of 5.3%. New and old competitors such as Great Wall, Changan, JAC, Jiangling, SAIC, Dongfeng, BAIC, Sinotruk, and Geely have all made efforts in pickup trucks.
Sixth, ask the “customer” for sales.
China's bus sales reached 511,000 units, up 3.9% year-on-year. Dongfeng, FAW, BAIC, Sinotruk and others all have bus companies, so it is not impossible for them to achieve some sales like Yutong, Sanlong and SAIC Maxus.
Seventh, focus on politics and use policies to exchange for sales.
The "two new" (old for new, scrapping and updating) policy implemented in 2024 has shown results. More than 2.9 million vehicles have been scrapped and updated nationwide, more than 3.7 million vehicles have been replaced, and the cumulative update has exceeded 6.6 million vehicles, driving more than 920 billion yuan in automobile consumption. Xu Haidong speculated that "this policy is expected to stimulate 2 million vehicles."
Eight is to look “outward” to increase sales.
Of the 1.34 million vehicles added in 2024 compared to 2023, exports accounted for 949,000 vehicles, contributing 70%. In terms of exports, Chery had 1.144 million vehicles and SAIC nearly 930,000 vehicles. The two export giants have the ability to export millions of vehicles overseas.
The Chinese automobile industry is not all doom and gloom in 2024.
For example, the commercial vehicle market performed weakly, with only 3.87 million units sold, down 3.9% year-on-year, and production and sales fell short of expectations of 4 million units, mainly due to truck sales of 3.36 million units, down 5% year-on-year. Chen Shihua analyzed that this was due to the weakening of investment, coupled with the current low freight rates, and the lack of motivation for vehicle replacement in the terminal market.
For example, the domestic sales of automobiles reached 25.577 million units, up 1.6% year-on-year, but still lower than the peak of 2.411 million units in 2017. Among them, the domestic sales of traditional fuel passenger cars reached 11.55 million units, 2.48 million units less than in 2023, down 17% year-on-year. After all, nearly 60% of the sales were still traditional fuel vehicles. This is the mainstream car company group that needs to be seen and paid attention to.
According to the "2025 China Automobile Market Overall Forecast Report" released by the China Association of Automobile Manufacturers, the China Association of Automobile Manufacturers predicts that China's total automobile sales in 2025 will be 32.9 million units, a year-on-year increase of 4.7%. Among them, passenger car sales will be 28.9 million units, a year-on-year increase of 4.9%; commercial vehicle sales will be 4 million units, a year-on-year increase of 3.3%; new energy vehicles will be 16 million units, a year-on-year increase of 24.4%; export sales will be 6.2 million units, a year-on-year increase of 5.8%.
At the 2025 Consumer Trends Conference held on December 26, 2024, Xu Haidong was generally cautious in his prediction of the automotive industry trends in 2025: China's auto sales are expected to reach 31.5 million in 2024, "2025 is still relatively optimistic, with a growth of about 4%, possibly reaching 33 million, new energy vehicles about 16 million, and exports of 6.5 million to 6.8 million vehicles possible."
Now, Xu Haidong pointed out five major positive factors for China's automobile industry in 2025: the vitality of macroeconomic policies will be released at an accelerated pace, the "two new" policies will continue to play a role, the policy of exempting new energy vehicles from purchase tax will be continued, the overseas market space will continue to expand, and the supply-side reform of automobile companies based on consumer demand will achieve remarkable results.
Of course, there are also many difficulties and challenges, including: the economic operation faces many difficulties and challenges, employment, income growth pressure, and insufficient consumer confidence - for example, in August 2024, the three major indexes of consumer confidence, expectations, and satisfaction all fell by at least 5 percentage points compared with January 2023. Domestic demand is still weak, internal circulation has brought negative impacts, and the pressure from the external environment has increased.
What worries the industry is a piece of industry revenue and profit data that is circulating: from January to November 2024, the automotive industry's revenue was 9456.1 billion yuan, a year-on-year increase of 3%; the cost was 829.5 billion yuan, an increase of 4%; the profit was 413.2 billion yuan, but a year-on-year decrease of 7.3%; and the automotive industry's profit margin was 4.4%, which is still low compared to the average profit margin of 6.1% of downstream industrial enterprises. In November, the automotive industry's revenue was 1124.1 billion yuan, a year-on-year increase of 9%; the cost was 983.7 billion yuan, an increase of 11%; the profit was 37.4 billion yuan, but a year-on-year decrease of 35%, and the automotive industry's profit margin fell to the bottom point - 3.3%.
The industry profit margin will still be 5% in 2023. From 2020 to 2022, the industry profit margins will be 6.2%, 6.1% and 5.7% respectively.
(The original title is "2024 Auto Man: Sold 1.34 million more vehicles, made a lot less profit", and the content has been partially deleted and modified)
