V-shaped set of automobile market: can 2016 pull out double-digit growth?

      "The auto market growth this year should be around 3%": On December 10, in the steam of the monthly press conference, auto Executive Vice Chairman and Secretary General Dong Yang , stated on the 21st century business Herald.

      The 1.6-liter and below cars halved the sales tax preferential policy, spurred by China's auto market. According to the Automobile Association in the latest data, it shows that in November China's auto production and sales continued the recovery in October, with the chain showing a rapid growth. Production and sales both exceeded 2.5 million vehicles, which is a record. Among them, the growth in passenger car sales grew to 13.34% in October from 3.26% in September and then to 23.74% in November.

     But this trend in the automobile market this year ending comes as a surprise. "Despite policy, last year China's auto production base, which determines in December of this year's auto production and sales, its figures rose not too evidently and growth in 3% is more likely", Dong Yang said.

      For the auto market growth this year, at the State information center, the Director of the resource development department said that the decisive factor is the continued slowdown of the economy. On December 4^th’s "2015 auto industry analysis", the sluggish auto market in 2015 was to be analyzed.

      He believes that from a macro level, NBS data showed GDP growth in January-September this year. China's GDP growth was 6.9%, and had less than half the peak in 2007 level. From the micro-level, with the GDP slow-down effect, civil servants and State-owned enterprise executives, persons with high incomes, and the incomes of the lower as well as higher fees, factors such as high-end entertainment revenue benefit some industries, especially the luxury car market.

      In addition, the total view of stock turbulence and restriction of two short-term factors also leads to two or three quarter auto market growth this year to plummet. “Shares rose sharply in the first half, attracting a large number of cars which leads to bring funds into the market. Diversion of funds with subsequent stock market crashes and enormous impact on the car market, this is one of the negativities. Second, the second quarter of 2014, due to restrictions, caused panic buying in big cities, resulting in very high base in the same period. With increase purchase of city-state this year, growth has declined. ”

       "At present moment, the v-shaped China's auto market is quite obvious. It’s falling month by month until July, and after August up month by month. This is the most important feature of the development of China's auto market this year", Total says.

       Now, including the auto industry, automakers and dealers are more concern with next year's auto market with the 1.6-liter and following displacement cars halved the sales tax policy, led by renewed vitality. On this issue, the car industry anticipation, there are two views.

       A more optimistic, as represented by the Total, felt that in 2016, as well as longer periods of China's auto market in the future, will return to growth at a moderate speed. Growth is about 1.3 times the GDP growth. "This means that passenger car market is expected to achieve double-digit growth next year. ”

      Total make this judgment based on Europe and with experience in developed countries such as South Korea's auto market growth. "The experience of developed countries shows that a country's auto market appears to be two stage of rapid development. First phase of five years or so, with a speed of 30% of production been sold. Second stage of growth is at about 20%, and about a decade's time. First phase of rapid development of China's automobile market is from 2001 to 2008, the average sales growth of 30.4%; starting from 2009, the market entered into the second stage, the overall growth in GDP of 1.3 times times. ”

       "Population density decides a country’s thousands of car ownership, while the vehicle determines a country’s car total peak. The Total in Japan, for example, with Japan's population density at 1113 people per square kilometer, is about 4 times China. China should be able to reach Japan, 589 vehicles per thousand people level. Therefore, calculated according to 400 thousand people, auto saturation point is 40 million vehicles that have been sold in China, and the ultimate level of GDP per capita is the most critical decision factors

       This anticipation, Dong Yang couldn’t agree with. In his view, car production and sales will fall in line with GDP growth. "China's 24 million annual automobile production and sales base is already very enormous. If in the long-term the double-digit growth on domestic is environmental, traffic is facing great pressure. As Dong Yang anticipates, domestic auto market growth next year should be between 5% and 7%.

      This anticipation of Dong Yang represent the views of some companies. President of Changan automobile, Zhu Huarong, for the 21st century business Herald said: "the current automobile industry has been in the right direction, macro to determine next year's auto market growth should be in the 5% to 7% range. This does not rule out some January 10%-15% interval that can be achieved, but the full year, 15% growth is a little too much imagination. ”

       However, total anticipation for the auto market also has a premise that in 2016, the Government will also market the introduction of appropriate incentives. On December 9, Bloomberg News quoted unnamed people familiar with the report. They stated China plans to launch a new round of auto policies to the countryside, the 1.6 liter passenger cars, mini vans, pickups and other light trucks included in the product range. Affected by the news, shares for the auto stock rose on the day; ChangAn Automobile Group, BYD Auto, all rose significantly.

      But Dong Yang denied the possibility of the policy. He told the 21st century business Herald: "a few days ago I went to a seminar on the economic situation of the State Council, did you hear that you want to start a new round of car countryside policy? ”