Chinese Car Market 2 - Forecast
Government policies regarding new energy vehicles
The State Council published the notice regarding energy
efficiency and new energy vehicles industry development plan (2012-2020) in
2012. Its milestones for the production of new energy cars are scheduled to be
500,000 and 2 million by 2015 and 2020 respectively. In 2020, the sold new
energy vehicles were 1.4 million. It was far below the target due to COVID 19
pandemic. The figure turned out to be 3.5 million in 2021.
In October 2020, the State Council issued the new plan
for new energy vehicle (2021-2035). The sales of new energy car will make
up for 20% of the total sales by 2025. In the first half year of 2022, the
penetration of new energy vehicles was as high as 21.6%.
In October 2021, the State Council released a notice about
action plans for carbon peak by 2030. Especially for transportation sector, new
energy vehicles will account for 40% of the sold vehicles by 2030.
The forecast
of passenger car sales in China
Figure 1
illustrates the sales of passenger cars in China from 2006 to 2021. China
experienced extremely quick growth of car sales around 2008. The sales peaked in 2016 and the tempo has
significantly cooled down since then. The growth was minus from 2018-2020.
Figure 1 Sold Passenger Cars in China
Note: the
right axis refers to the growth rate of sales.
It seems the high growth period has passed by although Covid 19 pandemic has
seriously affected the growth. The
slower trend is highly likely to continue due to the macro economy. In my
opinion, the growth of car sales in China has entered into a plateau. The sharp
fall in the birth rate, the constrained traffic situation in the big cities and
the slow down economy have dragged the speed down. However, the market
penetration of NEVs will continue increasing at a fast speed due to the
government support and the ESG awareness of people.
The prediction of sales of passenger cars in Chinese market
for the next 10 years is based on two scenarios:
1)
Baselines scenario: assume the slow growth rate
2% will stay for the next 10 years
2)
Better scenario: assume an annualized growth rate 4% will be reached mainly attributed to better economic situation
in China than expected for the next 10 years.
Table 1
displays the prediction of passenger cars will be sold in China for the next 10
years. The sales figures will be around 26 million and 31,8 million for the
baseline and better scenarios respectively.
Table 1 The prediction of passenger cars sold (Units) in 10 years
The
forecast of sales of new energy vehicles (NEVs) in China
The target for Chinese government of NEVs by 2030 is 40%
market penetration. Up to November this year, NEVs market share reached 25%
according to China Association of Automobile Manufacturers. For the NEVs
penetration target, I have also designed two scenarios:
1)
Baseline scenario with passenger cars sales
growth at 2%: assume the NEVs penetration
target is 40% by 2031
2)
Better scenario with passenger cars sales growth
at 4%: assume the NEVs penetration
target is 60% by 2031
The predicted sales of NEVs in Chinese market for the two
scenarios are shown in Table
2.
In 10 years, the sales of NEVs are supposed to 10,5 million and 19,1 million
for the baseline and better scenarios respectively.
Table 2 The estimated sales of NEVs (in Units) for the next
10 years
New
energy vehicles by geography
To better understand the sales of passenger cars and NEVs in
different areas in China, I have assigned the predicted sales to different city
groups based on their historical sales.
Mainland China consists of 22 provinces, 5 autonomous
regions and 4 municipalities directly under the Central Government. The cities
belonging to the provinces/regions/municipalities are categorized to 5+1 tiers
mainly based on the local economy. There are 4 cities under first tier cities:
Beijing, Shanghai, Guangdong and Shenzhen.
15 cities have been promoted to ‘new first-tier cities’;
Figure 2 illustrates the population and the
number of cars sold by city categories. The proportion of the number of cars sold to
the population in first tier cities and new first-tier cities to in both 2020
and 2021 are higher end the other city groups. Residents in these cities generally
have higher salary and benefits than in the other cities. Therefore, their
purchase power is higher than the others. The percentages of car sales in these
city groups remain stable in the last two years.
Figure 2 Passenger cars sold in 2020 and 2021 grouped
by cities
Figure 3 illustrates the first-tier cities
display a much higher percentage in new energy cars sold than the other city
groups. It is primarily attributed to the convenient recharge facilities in the
first-tier cities as well as license plate expedition for NEVs. The market
shares of NEVs in new first-tier, second and third-tier cities grew very fast
last year.
Figure 3 NEVs market penetration in 2020 and 2021
The
estimated sales of cars and NEVs by city group level
Based on the prediction of the overall car sales in 2031 and
the percentage of the total sales in 2021, I allocate the car sales to each
city group (in Table
3).
The differences between the overall
estimates and the sum of the reallocated sales are less than 1%.
Table 3 Allocation of the predicted car sales in
2031 to city group level
Kommentarer
Send en kommentar