Although the momentum of micro-growth in China’s auto market has been established, the impulse of expansion of auto companies remains unabated, and the company has been expanding its production by leaps and bounds.
According to the statistics of China Association of Automobile Manufacturers, by 2015, the total production and sales target of FAW, SAIC, Dongfeng, Chang'an, GAC, and BAIC, the top six OEMs in China, will exceed 28 million, with Chery, Geely, BYD, Great Wall, and Brilliance. The total production and sales target of JAC will also reach 12 million vehicles, which means that the production and sales volume of domestic mainstream auto companies will soar to 40 million vehicles.
In 2012, China's auto production and sales volume reached 19 million vehicles. However, in the context of micro-growth, even at the annual growth rate of 10%, China's auto production and sales volume will only surpass 25 million by 2015. Many insiders believe that the industry's production capacity Excess alarms have already sounded.
In fact, the concept of excess capacity is a product of the planned economy. As an auto company under the market economy system, the production target is only a plan and figures. The final production capacity depends on the market environment and the performance of the model in the market. So strictly speaking, the risk of excess capacity does not exist.
However, for car companies, there is a real risk of blind expansion. The extremely low capacity utilization rate, high inventory, and huge credit pressure generated by high investment will all make the company's development into a predicament and even regress. It will be eliminated in the fierce market competition.
At present, it seems that even by 2015, the Chinese market will have a hard time bearing 40 million capacity, causing a crisis of overcapacity in the Chinese auto industry. This does not necessarily happen, but such figures indicate more intense market competition, and such competition will directly collapse. Forcing auto companies to do a good job in product planning, quality improvement, and comprehensively improve the capabilities of network marketing, digital marketing, and experience marketing.
From this point of view, such “surplus†may not be completely a bad thing. In the full market competition environment, the lack of capacity or overcapacity will not be the key to the development of auto companies, but only keenly grasp the forward-looking nature of market development. To build a comprehensive system of competitiveness, in order to eliminate the risk of excess capacity, and ultimately ensure the sustainable development of the company.
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