· China's annual production and sales of 35 million vehicles is the upper limit

In 2015, China’s automobile production and sales exceeded 24.5 million units, and how much room for growth from the “ceiling” of the market? On May 19, Zhang Guofang, deputy dean of the School of Automotive Engineering of Wuhan University of Technology, attended the China International Automotive Intelligent Manufacturing Development Seminar. He said that the annual output of 35 million vehicles will be the upper limit. The Chinese automobile industry has completed the final round of capacity expansion. As the market competition accelerates, the development turning point will come.
How many cars can the Chinese buy? This is a hot spot in the industry and academic circles in recent years. Zhang Guofang's basis is the level of possession of thousands of people and the rate of retiring the car. At present, China has 1,000 cars, 800 in the United States, 571 in the United Kingdom, 595 in Japan, and 372 in South Korea. In 2010, the world average was 157.
"It is not excluded that the number of thousands of people in some central cities in China can reach the European level. However, considering China's national conditions, especially population distribution and land utilization, the overall level of possession is unlikely to catch up with the United States. It is more realistic to approach South Korea." Zhang Guofang estimates At present, China's car ownership exceeds 170 million. If it is calculated according to the number of 1,000 people, the limit and peak of China's car ownership is 400-500 million.
"After reaching the limit, the annual resale of the replacement of the car is the replacement of the car." He combined with the current US 6%-7% update rate, the Chinese car's annual sales limit of 35 million.
“That is to say, there is still 10 million spaces in the current annual production and sales limit. This amount cannot be completely released in the next 3-5 years.” Zhang Guofang believes that the market potential exists in middle-class families to purchase a second car or upgrade. Replacing the demand for the first car and the demand for car purchases in urban and rural low-income groups.
There is still room for improvement in automobile production and sales, but on the other hand, the country is pushing for structural reforms on the supply side with “three to one and one subsidy”. What does this mean for the automobile industry?
Zhang Guofang analyzed that any industry will present an S-shaped development curve. At present, the Chinese automobile industry has reached the upper curve of the S curve. “The fourth plant of Shenlong Company in Chengdu, the third plant of Beijing Hyundai Chongqing, and the fifth plant of FAW-Volkswagen Qingdao may be the last round of capacity expansion.”
“After the turning point, the era of selling cars by means of plant, land, capital, labor and other factors will never return. In the future, competition will be more than comprehensive strength, brand innovation, technological innovation, market innovation. He believes that this is the basic situation of car development in the future.

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