Trends in the automotive industry in 2020

01 Is it necessary to have a car?

                              
In the past, with the investment in the national high-speed rail network and public transportation, our perception of private transportation services has changed. A core view has emerged, which is that travel services are the primary driver of change in the automotive industry. With the emergence of travel services, fleet maintenance and operation solutions have further led companies to judge that new consumers have a lower preference for cars, which has also led to companies' judgment that future car sales have peaked and the profits of traditional auto companies have decreased.

Starting from this conclusion, the core value positioning of automobile companies has changed, and they are moving towards the development direction of emerging technology companies. The extreme case is what Volkswagen CEO proposed, that automobile companies turn to the aggregation of travel services, and provide digital services including the integration of vehicle networking, big data and artificial intelligence technologies, and shift the direction of revenue growth to be contributed by travel services, digital services and vehicle networking services.

I personally think this is a bit like the pendulum theory. Because it was moving slowly before, we were more eager to track it, and the final result was overheating in some aspects. From this point of view, for a typical family configuration of 3-4 people, the first thing is to have a car as a travel safety configuration for a small family. Only in your own car can the entire trip be safe and controllable. Travel services are supplementary in many cases. For a safe and reliable car to appear in various conditions for the family, it is necessary to have it. These are the needs of the ballast bottom.

02 Car sales in the first quarter of 2020

According to data from the China Machinery Center and the China Automobile Association, passenger car sales in December were 2.36 million, down 5.4% year-on-year, and passenger car sales (excluding new energy vehicles) increased by 2.9% year-on-year, the first positive since July. After such a round of tossing, it seems that January and February will definitely be greatly affected, and the actual situation will be evaluated after March. Therefore, we have to switch to another mode to look at the data of new energy vehicles and passenger cars in 2020.

Various activities are dormant, which means that a large number of people have no need to travel. This is a rare situation. From a three-month cycle, the three-month data has lost its meaning both year-on-year and month-on-month. It may be more realistic for us to carefully consider the subsequent technology iterations at home.

Finally, I wish all readers a healthy new year. Staying at home with your family and reading quietly are all good things. In the short term, 2020 started with a fuss. In the medium and long term, the crisis has made everyone realize how important it is to have a private car that can be controlled by individuals in an emergency. This has created a bottom-line demand for China's auto industry. It depends on how we polish our products.