Wang Xiaoguang: China's auto market from the perspective of economy

In the first half of 2012, how did the Chinese auto industry in low-growth conditions face the pressure and challenges of industrial upgrading? Professor Wang Xiaoguang, who specializes in macroeconomic situation analysis and economic development strategy studies, has shared his thoughts with us from an economist's point of view.

Can't rely on policies to rescue the market for the first half of 2012, Professor Wang Xiaoguang was not surprised, but he also said that he is very optimistic about the long-term development of China's auto market.

“I think that the fundamental reason for the adjustment of the Chinese auto market this year is the cyclical adjustment of the industry itself. The impact of policies is on the one hand, but it is not the most important reason. The tightening of the macroeconomic environment is not the main reason for the auto market adjustment.” Professor Wang Xiaoguang believes that The auto market has little to do with the macroeconomic environment. “The insufficiency of the auto industry is driven by the macroeconomic environment. Now China's consumers are not without purchasing power.” Professor Wang Xiaoguang, who has long studied the Chinese economy’s special focus on the macroeconomic growth cycle, believes that the auto industry has its own internal cycle, and The cycle of each product in the automotive industry is also very clear. “The cyclical fluctuation of the auto industry is between three-and-a-half to four years – two years of high growth and a one-and-a-half year adjustment period, so I think the Chinese auto industry is now in an adjustment period after two years of high growth. ”

Although the situation in the auto market is still not clear, Prof. Wang Xiaoguang is particularly opposed to stimulating industrial policies. “The Chinese auto industry must not rely on policies to save the market. In the Chinese market, there are two typical policy cities – one is the stock market, One is the housing market - all have developed very badly, and our auto industry's market has developed very healthy, and does not require policy incentives. "Professor Wang Xiaoguang believes that the automotive industry has a long industrial chain and a high degree of relevance to upstream and downstream industries. Pull power is strong. At present, these fluctuations in the industry itself are in line with the inherent laws of the industry's development. “Do not use policies to save the market and be constrained by the policy. You will introduce preferential policies in the near future and you will withdraw again.”

Temporarily abandon the serious challenges faced by the mid-to-high-end automakers for self-owned brands. Prof. Wang Xiaoguang advocated “taking the development of economical cars as the key breakthrough point, aiming at the mid-end, and temporarily abandoning the high-end market.” That is, within five to eight years, Chinese auto companies will The focus of R&D on economical sedans is to form a strong middle- and low-end brand while aiming at the development of mid-range sedans. After 10 years, it will strive to occupy a place in mid- to high-end cars.

Prof. Wang Xiaoguang believes that in terms of independent development, with the development of economical cars (medium and low-end cars) as the breakthrough, China’s own-brand auto companies are most likely to succeed.

He told reporters that in this area, China’s auto companies mainly have three major advantages: The first major advantage is that economical cars correspond to the largest consumer groups in the automotive market segmentation, and at the same time, it’s just over 1,000 per capita income in China at this stage. The dollar is suitable for the middle-to-lower level; second, from low to high, it actually follows the general rules of industrial development. It is difficult to follow the first steps, and it is also a step-by-step process. It is also a gradual accumulation of corporate capital and talent and management experience and development of confidence. Gradually enhanced learning process (and this is the way China's color TV industry has achieved great success). He said that the process of industrial development is a process of growing confidence, and that defeatist sentiment often arises at a far higher level, sets the goal too high, and results in running into a wall, eventually losing confidence. If you start from an easy place, it is easier to nurture confidence in development and gradually upgrade the industry. This is called the "successful success" law. For China's own-brand auto companies, the third biggest advantage is that in the mid- to low-end car sector, developed countries do not have corresponding world-class brands, and they are almost blank in this respect. For a long period of time, transnational auto groups have basically abandoned the production of low-end or middle- and low-end vehicles. The mass-market vehicles produced by large-scale automobile companies in the United States and Europe are mid-range vehicles in China, which is exactly our own brand. The opportunity for business is where we can avoid having to compete directly with it. Until the establishment of a solid foundation for economical car development (with independent development capabilities), Chinese self-owned brand auto companies can gradually develop into mid-range vehicles "flowing forward."

A well-designed automobile industry policy For the two years, some cities have seen restrictions on the consumption of cars, Professor Wang Xiaoguang believes that it is unfair. He believes that the development of the automotive industry should be suppressed rather than limited, and suppression is to use economic means to control consumer behavior through the use of economic costs. “And the purchase of cars should be completely free, the purchase of cars is a basic human demand, the Americans have cars, the Japanese have cars, why the Chinese people can not have cars? Humanity is an important symbol of the development of human life or modern life. He said that the key to the traffic problems in Chinese cities lies in the problems of urban development models and the planning and utilization of roads. However, if the urban traffic problems are not solved properly, the automobile industry will be the victim and it will even become a victim.

In addition, Professor Wang Xiaoguang also has his own opinions on the design and collection of vehicle purchase tax and automobile consumption tax. He believes that the automobile's consumption policy must be divided into two parts, one is the car purchase part and the other is the car part. Both of these policies must be planned and positioned in the long term. “Structural purchase tax or consumption tax should be adopted. For cars below 1.5L, especially under 1L, we should cancel all taxes. For middle and low-end cars, We should have a long-term tax reduction and exemption policy.” Professor Wang Xiaoguang believes that in the future, China’s economic development model will shift from investment-oriented to consumer-oriented, so overall, relevant policymakers must consider the formulation of auto consumption policies. In the future, China will establish an economic form that takes into account the basic needs of the public at the same time. “I set up taxation on the purchase of cars and the use of cars. I think this is a reasonable design.” Professor Wang Xiaoguang said that China’s “automation "After that, it will bring a result - China's socio-economic structure has undergone tremendous changes - the formation of a consumer-oriented economic structure. "So I think that from the perspective of the development of the service industry and the rationalization of the use of the automobile, we believe that the development of the automobile industry should be encouraged."

In the long run, of course, the biggest problem facing the Chinese economy is not the speed but the structural problems. It can only be driven by investment and cannot solve the problem of overcapacity and structural adjustment. Professor Wang Xiaoguang believes that the Chinese economy has reached a critical period of transition from "element-driven" to "innovation-driven." The development of China's auto industry is also at a strategic transition point: First, the development of the auto industry is at a strategic turning point in China's industrial upgrading and accelerating economic development; Second, from the time of fostering independent development capabilities, it is very urgent, only 10 to 15 In the year, we must work hard to grasp the transition point of time. Therefore, the Chinese auto industry must shift from relying growth to autonomous growth as soon as possible to avoid dependence becoming dependent. The first thing to do in the automotive industry is to establish a strategic thinking for the development of the auto industry, and then formulate and adjust the strategy.

Prof. Wang Xiaoguang suggested that the key points for the strategic selection of China's auto industry are: First, to maintain openness to the outside world, increase internal opening up, create a relaxed policy environment for the independent development of domestic capital, and secondly, implement a brand priority strategy to support independent brands. Development, driving the upgrading of parts and components industry; Third, the strategic positioning of the market should be "quasi" and "real", should not be too good, with the development of economical cars as a breakthrough, and gradually upgrade; Finally, take the "distribution before the concentration of" development model .