Rising raw material prices and chip shortages will reduce China's passenger car production by 300,000 units in 2021

7.
2021 is an important first year for the full popularization of L2-level high-assisted driving.
At the same time, mainstream car companies will also start to release L3-level autonomous driving capabilities in 2021
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The medium and long-term development trend of China's auto industry:

1.
The Chinese auto market has bid farewell to the golden development period, and is gradually transitioning to the era of stock market competition.
In this process, more structural transformations are taking place, that is, the gradual shift from single product sales to mining user value;

2.
A large number of brands may disappear, and of course new brands will enter the market, which is the survival of the fittest in the market;

3.
Car companies must transform to software companies and digitalization.
In terms of value chain, business model, and product characteristics, digitalization is the core transformation
.

The speech mainly revolved around two parts: one is where the auto market will develop in 2021; the other is what is the medium and long-term development trend of China's auto industry
.

First of all, make a review for 2020.
From the perspective of the auto market in the past 20 years, the Chinese passenger car market has experienced a transition from a period of rapid development to a period of transition, especially in the three years from 2018 to 2020, everyone in the industry has experienced The major event is the decline of the automobile market.
In addition, the "black swan" of the epidemic in 2020 also has a certain impact on the automobile industry, but the results in 2020 are still better than expected
.
From the perspective of the development status of the passenger car market, we have summarized six major development trends of the passenger car market in 2020: 1.
The market concentration is getting higher and higher; 2.
The market share of self-owned brands is currently maintained below 40% 3.
The new energy vehicle market has gradually transitioned from the B-end market to the C-end market
.
4.
The penetration rate of the luxury car market continues to increase; 5.
The joint venture brand will explore and expand the SUV market; 6.
The new power enterprises will thrive
.

2021 is generally considered to be the year of market recovery, and everyone still has certain uncertainty about how much it can recover
.
At present, we judge that the growth rate of the passenger car market in 2021 will be about 5.
6%, but according to market demand speculation, we believe that the demand side of passenger cars will reach more than 21.
6 million this year, which is in line with the annual forecast.
There is a gap of almost 300,000 vehicles from 21.
3 million vehicles, mainly due to certain losses caused by the increase in raw material prices and the shortage of core components such as chips
.

From a quarterly perspective, we believe that the first quarter will be a strong recovery, because the first quarter of 2020 caused a low base due to the epidemic, and we expect an increase of 78% in the first quarter of this year, and in the next three quarters, after the resumption of work and production last year, car companies increased After production and sales, raising this base will put a lot of pressure on this year's year-on-year growth.
We expect a year-on-year decline to varying degrees from the second quarter to the end of this year, but overall this year's market performance will still be significantly better than Last year, the production and sales even reached the same level as in 2019
.

Last year, everyone paid more attention to the new energy vehicle market, because the overall vehicle market fell by nearly 6% last year, but the new energy market increased by 15% year-on-year
.
In 2020, the market will show a phenomenon of polarization.
The low-priced models represented by Wuling Hongguang MINIEV have performed very well in the market, and the mid-to-high-end electric vehicles represented by NIO and Tesla have also performed very well.
Not many bright spots were found
.
With more and more car companies deploying in the new energy market and the launch of more new models, the entire market will maintain a development track of common progress and common growth from price to product level
.
Especially for low-priced models within 50,000 yuan, driven by the second wave of cars going to the countryside, more and more car companies will deploy in this field, so this market will thrive
.
At the same time, the range of 200,000 to 300,000 is the big cake in the current mainstream new energy vehicle market, so everyone will see that new forces, joint venture brands, and independent brands will increase their investment and marketing in this field
.
We judge that the new energy vehicle market will enter a comprehensive development from 2021, and form a market structure that is close to the current traditional fuel vehicles
.

In addition, since the end of last year, the shortage of chips has also been a major concern for everyone.
The reasons for the shortage of chips are summarized in four points: 1.
The new crown epidemic has caused a decline in global chip production capacity; 2.
With the explosion in demand for 5G and smart cars, There is a certain imbalance in the supply of chips; 3.
The degree of "four modernizations" of automobiles has been continuously improved, and semiconductor companies have lagged behind in the production capacity planning of the automobile industry; 4.
The recovery of China's automobile market has exceeded expectations, so it has further promoted the growth of chip demand
.
At present, the entire impact will continue for about 2-3 quarters
.

Due to the shortage of core components such as chips, there is a gap of about 300,000 car sales in China, which gives car companies a clear direction: core components must be controlled by themselves
.
Therefore, car companies may use technical cooperation, independent research and development, strategic investment and other methods to achieve the ability to own core components such as chips and software in the future
.
After this epidemic, China will take the autonomy of the supply chain as a long-term development goal
.

In the long run, we are cautiously optimistic about China's auto market, not very optimistic
.
To sum up, starting from 2021, the development law of China's auto market will gradually shift from the original private consumption and product sales as the main driving force to the mining of user value and even the field of travel services
.
In fact, the market growth rate will gradually slow down in the middle, which has basically been the consensus of the market
.

With the constraints of environmental protection factors such as carbon neutrality, the trend of electrification of passenger vehicles is irreversible, including hybrid vehicles will become one of the key technical fields for the future development of the Chinese market
.
In order to cope with the long-term goals of 2025 and 2030, mainstream car companies are also adjusting their strategies
.
From the perspective of strategic goals, it is a common direction to deepen the investment in the four modernization fields
.
Among them, mainstream car companies have expressed that they want to build themselves into the world's leading electrified car manufacturers, and they are also gradually possessing the upper-level software capabilities in terms of intelligence and networking
.

In addition, whether it is an independent brand or a joint venture, they have expressed that they want to use China as an important automobile export base.
It can be seen that Geely, SAIC and other enterprises have begun to deploy overseas business, and will also become an important source of production and sales within the company in the future.

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On the other hand, for the layout of travel services, although the entire travel market is still in a relatively small market, and companies have not said that they are very successful, the future trend will still go to travel services, so car companies are still appropriate to deploy in advance
.

In terms of brand strategy, independent brands have all expressed their desire to create their own high-end brands, such as SAIC's Zhiji, the upcoming high-end brands of Changan Group, and so on
.
At present, the development of high-end brands is still facing a short-term bottleneck for independent brands.
I think it is very important for them to form brand value through product precipitation
.

From a technical point of view, the product platform strategy is no longer limited to the vehicle architecture.
In the future, electronic and electrical architecture and software architecture are also key areas for car companies to lay out, especially the electronic and electrical architecture is the future of the vehicle.
where the limit lies
.
In the technical field, traditional power will still not give up for traditional car companies, such as high efficiency, light weight, and thermal efficiency improvement will still be an important direction for the development of traditional car companies
.
In the field of electrification, in addition to new energy, most mainstream car companies have to develop hybrid vehicles.
Some may choose 48V, and some may enter strong hybrids
.

In terms of autonomous driving, for low-end products, 2021 is an important first year for the full popularization of L2-level high-assisted driving.
For mainstream car companies, they will also begin to release L3-level autonomous driving capabilities in 2021
.

For small and medium-sized car companies, they are currently facing competition in the stock market, and the pressure is still very large.
In the short term, improving the entire sales management, optimizing the product system, and improving the capacity utilization rate will be important methods and means for them to improve their survival
.
In the long run, it is mainly about the six words "improving profitability".
In this process, optimizing supply, streamlining product complexity, forming alliances in the intelligent networked ecosystem, personalized marketing, and lean and flexible organizational structure , laying out an electrified product system, doing a good job in digital marketing, and which areas of technology investment will all need to be considered and pondered by these car companies
.

The product of the car is no longer a simple travel tool, it will be redefined
.
I think it will be divided into two aspects: on the one hand, car companies may still focus on the field of private cars, but they will format the product attributes of cars.
Among them, mastering the full stack capability will be an important means for car companies to win the market in the future
.
At present, the car may become an important third space for people after work and family life
.
The ability and system required to build the concept of the next generation of smart terminals are still relatively weak.
Traditional car companies are still relatively weak.
Relatively speaking, new power companies have more prominent ideas in this regard, and their practices are relatively radical.
They may become market leaders in the future.
the person
.

In order to deal with the entire travel market, cooperation between travel platforms and car companies will also become one of the mainstream methods
.
What is this cooperation model? The travel platform did preliminary market research.
He proposed product design requirements, and then asked car companies to help him with product design, product development, and product manufacturing.
This cooperative OEM model will be mainly used in the future of travel products.
, At present, Didi and BYD have jointly launched the D1 model.
The cooperation between Ideal and Didi is also in progress, and there may be similar cooperation in the future
.

From 2018 to 2020, the main theme of the market may be more new energy.
From 2021, the whole market hotspot will gradually shift from new energy in the "four modernizations" to intelligence, networking, and the corresponding autonomous driving technology
.

In the field of intelligence, everyone is currently talking about smart cockpits.
Smart cockpits are indeed a core ontology of the current intelligent networking technology
.
According to our analysis, it is mainly divided into three levels: 1.
The electrical and electronic architecture level.
At present, most of the mainstream car company products use a decentralized architecture.
In the next two or three years, it may transition to a domain centralized architecture, and in the next five to ten years, it will transition to a vehicle.
Centralized architecture, with the construction of mobile intelligent space and future travel, intelligent cockpit will also use these two directions as a synergy to respond to different technical trends; 2.
In the field of human-computer interaction, most models are currently transitioning to interactive In the future, intelligent assistants will become an important development direction in this field; 3.
Communication technology, that is, the transition from 4G to 5G, in our opinion, the arrival of 5G is more to improve the ability of in-vehicle information interaction, However, it is also subject to the bottleneck of current technology and infrastructure, and has not been fully applied to autonomous driving
.

With breakthroughs in these technical fields in the future, 5G will truly empower high-level autonomous driving only after the large-scale construction of 5G base stations
.
2020 is the first year of 5G.
In 2021, more and more 5G models will be introduced to the market.
In this process, ICT companies such as BATH may play a role that is no longer a simple participant, but more an ecological one.
leader
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Autonomous driving has been hotly debated in the market in recent years, but the real landing of autonomous driving will take time to transition
.
At present, mainstream car companies have launched L2 level, but the transition from L2 to L3 is not only the increase of sensors, but also the emergence of deep learning algorithms and integrated computing platforms
.
The transition from L3 to L4 will be after 2025
.
Overall, the development of autonomous driving technology will promote the development of perception components, high-definition maps, smart chips, and smart algorithms
.

From the perspective of industry development in 2030, first, China's auto market has bid farewell to the golden development period (high-speed development period) and gradually transitioned to the era of stock market competition.
In this process, more structural transformations, namely Gradually shift from single product sales to mining user value; second, a large number of brands may disappear, of course, many brands will also enter, which is the survival of the fittest in the market; third, car companies must transform to software companies and digitalization.
In terms of value chain, business model, and product characteristics, certain transformation must be done with digitalization as the core
.

In the field of traditional car sales models, car purchases no longer simply start from 4S stores, but gradually shift from offline to online.
At present, almost all traditional car purchase channels are in 4S stores, and now under the leadership of new forces After that, everyone will find that car buying may be a combination of offline + online
.
For the transformation of car companies, how to formalize traditional 4S stores and improve the service experience for consumers is an important consideration for the development of traditional car companies
.
At the same time, for 4S stores with poor profitability, low service level and more customer loss, how to integrate them is also a must for traditional car companies
.

In terms of policy, with the introduction of the share ratio opening policy, more and more joint ventures will begin to consider or gradually open the share ratio limit after 2022
.

Finally, at the level of long-term automotive product planning, the general direction has been very clear, mainly focusing on energy-saving vehicles and electrified vehicles based on environmental protection
.
In addition, automotive intelligence will focus on human-computer interaction, autonomous driving, and digital services, and gradually transition to the development of the entire smart car in the future
.