Affected by the overall economic downturn, the Russian auto market is already on the verge of collapse. According to AEB European Chamber of Commerce data, in the first two months of this year, Russian car market light vehicle sales plummeted by more than 30% year-on-year, with a cumulative sales volume of 243,826 units, down 32.1%. PricewaterhouseCoopers predicts that the Russian car market in 2015 will be between 1.52 million and 1.75 million, which will increase from 10% to 25% to 35%. In other words, the Russian car market may shrink by about one-third this year. Carbide Combination Tool,Pp Board 3D Engraving Milling Cutter,Single Blade Spiral Milling Cutter,Hard Alloy Right Spiral Milling Cutter Guofu Technology Group Co., Ltd , https://www.guofutools.com
Russia is one of the largest export markets for Chinese autos, and the downturn in the Russian auto market will inevitably affect its own brands that have already taken root in the region. In recent months, most Chinese independent brands have experienced serious declines in sales in Russia, and some car companies have even experienced zero monthly sales.
In the ongoing economic environment, will the Russian auto market collapse this year? What does the current predicament of Russian auto market mean for independent brands? What impact will the “One Belt, One Road†economic strategy have on the export business of autonomous vehicles? In this issue, Geshi Liheng invited Cao He, chief analyst of China National Securities Automotive Industry, and Wu Guangxiao, researcher of Wilson Overseas Market, and Zeng Zhiling, LMC Automotive Market Consulting (Shanghai) Co., Ltd. to discuss this topic.
One of the balances: Will the Russian auto market collapse this year?
Tensions of geopolitical conditions, continuous economic sanctions, plunge in international oil prices, a sluggish domestic economy..., a series of negative factors have hit the Russian auto market, and the Russian auto market, which does not see the hope for future recovery, will collapse.
"The collapse is not enough. The entire Russian economy will collapse and the auto market will collapse." Cao He said bluntly. He analyzed that in recent years, the Russian auto market has been floating up and down. Due to Western economic sanctions, the current Russian auto market is generally less stable than the Chinese auto market 10 years ago. However, Cao He also pointed out: "The depreciation of the ruble directly affects the purchasing power of Russian consumers. This year, the Russian auto market is unlikely to have a big turnaround. It will fall on the basis of previous years. Now it is only the state's hard support, and generally do not know. Which direction should I develop?"
Wu Guangxiao also believes that the sales of the Russian car market will fall sharply in 2015, but it will not collapse. He conducted specific analysis from Western sanctions, oil prices and consumer purchasing power.
First, Western sanctions will not stop in the short term, but they will not expand. "The United States has unilaterally expanded its sanctions. The EU is in desperate need of Russian oil. Now that one third of the EU countries are opposed to expanding sanctions, the sanctions will not stop in the short term, but they will not expand."
Secondly, the international oil price will not rebound sharply in the short term, and Russia has not yet issued a key rescue plan. In the short term, the sales volume of the Russian auto market will continue to fall. “Even if the Russian government announced that it would provide 10 billion rubles (about 1.66 billion U.S. dollars) in subsidies for the auto industry, the time for subsidy implementation is uncertain and there is no specific subsidy.â€
Again, from the perspective of consumers' purchasing power, on the one hand, the ruble is devalued, and the money on the hands of people becomes more and more worthless, which directly leads to the overall lack of demand in the automobile market. However, Russia is sparsely populated and public transportation is not complete. The car is still the main means of transportation for the people, and it is still in the local area. So in the long run, the demand for cars is still very large.
Wu Guangxiao also mentioned that the sales pattern of the Russian auto market in the past 10 years showed a "roller coaster" ups and downs. In 2005, the overall sales volume was only over one million. After a few years of rapid growth, but in 2009, after the financial crisis, sales volume was more than half, down 50%. It has recovered rapidly since 2010 and has rebounded again in recent times. It can be said that the Russian auto market has experienced a deeper valley than it is now, but it can recover quickly.
Zeng Zhiling said that the Russian auto market crisis is not entirely due to economic factors, and political factors have a greater impact. "Russia has been economically sanctioned by Western countries, and international oil prices have fallen to a low point. All kinds of reasons have caused Russia's overall economy to be in trouble and the auto market has been deeply affected." He also pointed out that among the BRIC countries, except for the Chinese auto market, which is relatively stable. The markets of India, Brazil and Russia are generally fragile.
On the second two: how to treat the performance of independent brands in the Russian market?
Affected by the continued deterioration of the Russian auto market, the sales of Chinese brand cars in the Russian auto market have also been shrinking. After October 2014, in February this year, the sales of Chinese car companies returned to zero, and the self-owned brands with sales also suffered from double-digit diving. How do you view the performance of your own brand in the Russian market? In the case of Opel delisting and the temporary suspension of production in Nissan, is the current dilemma of the Russian auto market an opportunity or a challenge for its own brands?
Zeng Zhiling pointed out that the ruble depreciation, cars become luxury goods, and the export cost has risen sharply. Chinese car companies are under tremendous pressure in the Russian market and it is difficult to be independent. "We face the same difficulties that others face. When others quit, they will go into the market and there will be huge risks. After all, our localization is not high. This year's exports will not be very optimistic for domestic car companies. â€
Wu Guangxiao said that the Russian market is a very important destination for independent brands. "There has been a certain history of entering the Russian market independently. Compared with other export markets, the brand recognition in the Russian market is higher, and the channels and services have also formed a certain scale." But at present, the entire Russian car market is shrinking, and independent sales have been It is falling. The four major independent brands in Russia: Lifan, Geely, Great Wall and Chery. In February this year, sales volume suffered a sharp drop, which was a big shock.
Wu Guangxiao also believes that at present, the challenges of autonomous car companies in the Russian market are greater than opportunities. It said: "The main reason for the auto market in Russia is the low-end products, which directly compete with the local largest car brand Lada (the main products of the low-end market), and according to the consistent policy of the Russian government, it will be launched after the economic crisis. Some policies to protect local companies will undoubtedly benefit from local car companies such as Rada, and they will face more brutal competition."
Cao He believes that "as long as Russia does not seal imports, its own brand still has a certain market space in Russia." The characteristics of the Russian auto market are similar to those of China 10 years ago, mainly depending on the price, and the emphasis on the brand is relatively low. . For independent brands, it still has certain advantages in the Russian market. Compared with the domestic market, its days may be better.
On the third part of the balance: How should the self-owned brands respond to changes in politics and economy when they explore overseas markets?
In recent years, the unfavorable situation in the domestic market has stimulated independent auto companies to explore overseas markets more actively, and the “One Belt, One Road†strategic concept, which has been established as the main economic development concept, also facilitates independent auto companies to explore the surrounding national markets, but international politics. The economic situation is changing rapidly. How should autonomous car companies respond to political and economic risks in the process of “going out�
In this regard, Wu Guangxiao believes that autonomous car companies should pay close attention to the local situation in overseas markets, interpret local government policies, and understand local people's livelihood. At the same time, they must plan ahead and develop different emergency plans to deal with the various crises that may arise.
Cao He said: Chinese companies have been exploring overseas markets for more than a decade, but not too good, which is mainly related to the international trade environment and China's export characteristics. He stressed that "Chinese cars must go out, overseas exports, overseas factories (including CKD, SKD) must stick to it. If you insist on 5 to 6 years, there will be a big turn; second, develop and produce in line with the local market. Products that are in demand continue to improve product quality."
Zeng Zhiling pointed out that at present, the export of autonomous car companies relies heavily on developing countries, but compared with developed countries, the economies of emerging countries (such as India and Brazil) have very large uncertainties, are more vulnerable to shocks, and have local infrastructure. They are not mature enough, and the cost and risk of localization are greater. Zeng Zhiling believes: "Autonomous car companies should expand their risk in the offshore market. Do not concentrate on investing in a certain region. They should not only look at whether they are emerging or not. They should consider the economic policies of various countries and make economic risks to different countries. Evaluate and achieve diversified exports."
In response to the impact of the “One Belt, One Road†multilateral economic development strategy advocated by China in recent years on automobile exports, Cao He said that it is definitely good for the export of commercial vehicles and construction machinery, and it is not too much for passenger cars. “In the early stage, it was only conducive to commercial vehicles. After the infrastructure construction was formed in the future, trade was carried out and it might drive some passenger car exports.â€
Wu Guangxiao pointed out that the “Belt and Road†will greatly promote the export of car companies, especially in emerging markets that are on the rise. The “Belt and Road†policy facilitates independent access to these markets through policy facilitation between countries. In the “21st Century Maritime Silk Roadâ€, independent brands have great opportunities in the South Asian and North African markets. On the "Silk Road Economic Belt", it is necessary to go through some CIS countries and then to Central Asia, the Middle East and other places. The automobile market of these countries is greatly affected by the policy, and the “Belt and Road†policy is formed between the countries. Convenience is conducive to independent entry into these markets.
"It is still too early to say that the "Belt and Road" has an impact on the export of automobile enterprises." Zeng Zhiling believes that it is still only a strategy. After the specific implementation of the strategy, it will reach a bilateral agreement with the relevant governments to form a free trade zone, or taxation and customs. After there are convenient incentives. To see its true impact.