After the epidemic, car sales will face a worsening situation, and price competition will further intensify?

“My city is sick, but we will cure it.” I believe most people will cry when they see this sentence in this video that has been circulating recently.

When the New Year of 2020 comes, what we usher in is not the fireworks that fill the sky during the Spring Festival, nor the joyful reunion with family members, but an unthinkable disaster. Due to the spread of the new type of pneumonia and the extension of the Spring Festival holiday, except for special industries such as medical care, China is facing a shutdown of almost all industries. Facing such an impact, what kind of situation will China's auto market, which is already in a cold wave, face?

Unscheduled shutdowns may cause weak enterprises to be eliminated early

First of all, it must be said that in such a severe situation, the negative impact of the new type of pneumonia on our country's economy may be felt for several years. It will take several months for things to get better. Even if the automobile industry is not the first to be hit, the market is interconnected and the automobile industry will not be immune to the slowdown in economic mobility. In addition, due to the strong contagiousness of the virus, most provinces and cities in China have currently launched a first-level response. In order to avoid cross-infection, some companies can only allow employees to work from home. However, as a real economy, the "online office" model is obviously unrealistic for related industries such as automobile manufacturing and retail. It is difficult to estimate the losses caused by every day of company shutdown.

It is reported that many factories including Toyota, Honda, Tesla, etc. have postponed their resumption of work until February 10. However, we need to be vigilant that the new type of pneumonia has reached a high outbreak stage recently. If it is not properly controlled, new cities in China will fall into a "stalemate". Judging from the distribution of the epidemic nationwide, cities with more confirmed and suspected cases tend to be relatively developed large cities. Considering the convenience of geographical location, many companies often choose large cities to locate their factories. If a certain company's factory happens to be located in a city with a severe epidemic, it is difficult to say when work will be resumed. For example, Nissan, Renault, Infiniti, etc. have built factories in Hubei.

During the shutdown, car companies still need to pay part of their employees’ wages. In fact, this is not a good thing for both parties. First, the actual income of employees is not as high as when they resume work normally, and second, the enterprise is in a state of "hemorrhage". Coupled with the impact of the cold wave in China's auto market, the profits of most companies are already weak, and some have even fallen into serious losses. The new type of pneumonia has caused auto companies and factories to suspend operations at irregular intervals. This will undoubtedly add insult to injury. How many of them can withstand it? Therefore, the first easy result under the influence of the epidemic is that a group of weak car companies may be eliminated from the market early.

Having restrictions on going out, have car sales suffered a major setback?

In addition, under the influence of the epidemic, it is not only the production capacity of cars, but also the sales volume of cars that have dropped. After all, buying a car is a major life event for most people. If you don’t go out to a 4S store to test a car, it is impossible. Probably a hasty purchase. Moreover, buying a car is not about shopping on Taobao or JD.com or ordering takeout from a certain group. There are a lot of things that need to be handled by yourself. With slogans like "Visiting today, visiting graves next year" have been put up, I really can't expect many people to have the courage to go out and buy a car.

Of course, the decline in car sales does not mean that consumers are less willing to buy. I believe that everyone does not desire to own a car of their own, especially private cars, which can also reduce the need for closed public transportation. Regarding the risk of infection, "the epidemic will increase people's desire to buy cars." This is the "experience" gained after SARS that year (in 2003, China's car sales surged by 106% in the first quarter and 66% in the second quarter).

In the short term, the sales volume of China's auto market will be greatly affected. Some commentators believe that the auto industry was originally in a downward period, and it will be more prominent this year than last year. Therefore, it cannot be ruled out that in the end, in the terminal , or to "make a living by cutting off one's wrists" in the way of "price avalanche".

But on the other hand, China's economic situation will remain in good shape after the epidemic passes. In addition, there are many financial policies for buying cars nowadays, so car sales may decline while the epidemic continues, but after the epidemic is over, the car market sales should be able to basically enter the normal development track. Of course, dealers are a part of the automobile economy that cannot be ignored. During the epidemic, whether most dealers can get out of trouble is often closely linked to the overall sales performance of the auto market.

Written at the end:

As the world’s largest single automobile market, China is indispensable to the world’s automobile economy in terms of automobile manufacturing, sales and parts manufacturing. One ring. At present, the impact on China's automobile industry has gradually spread to the world. Automobile factories in India, South Korea, Japan and other countries have more or less temporarily suspended production due to supply disruptions from Chinese parts suppliers. To discuss how much impact the epidemic will have on China's auto market, it mainly depends on how long it will take for the epidemic to be controlled. At present, our most urgent hope is that the new pneumonia can be solved as soon as possible. Come on, Wuhan! Come on, China!

This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.