Zhang Zhaozheng: Disappointment and Hope, From a Macro View of the Changes in the Auto Market and Countermeasures

In the first quarter of this year, China's two major independent ERP software companies, Kingdee and UF, handed out poor financial reports. The high-speed growth and profit for many years turned into negative numbers, and they also formed losses. Even in the official semi-annual report, UF showed a good book surplus, but if UF’s financial report is measured by the same Hong Kong stock standards as Kingdee, UF is still in a poor condition like Kingdee.

What does this mean?

Two domestic ERP software companies have an absolute market share in China. The main customers are concentrated in small and medium-sized enterprises across the country. Their losses, even if they are deficient in management and operating capabilities, are difficult to hide behind the macroscopic phenomena. China The economic strength of SMEs has fallen sharply, and the development of the grass-roots economy has turned from hidden dangers into real problems and troubles.

At the same time, in the past two years, the two formerly self-owned brands BYD and Chery have continued to see negative news and there are unsustainable news appearing before us. Other independent brands, although not so bad, but the situation will not be very good, in addition to Geely, everyone is struggling to support.

There are also many other first-tier second-tier cities that have added fuel to the fire. They have already issued restrictions on purchases, or have carefully considered preparing to introduce them. For a time, the whole market is in danger.

The large-scale auto trade group is also not much better, and there have been reports of financial shortages and expansion.

It looks bad. Will the future be worse?

In the future, no one can tell, but the development of any matter will follow certain logic and context. The various phenomena in the Chinese market today also have context. According to this context, the future will certainly continue to deteriorate. It's possible, but there are also new opportunities.

First of all, let's take a look at the reasons for the current car market situation.

Experts believe that the current situation cannot fully be blamed on the global economic difficulties, or that national policies are weak. More problems still lie in the inadequacy of the auto industry's own management capabilities and overall outlook.

In the case of severely afflicted BYD, the contempt and misunderstanding of the automobile industry by the principal is the main cause. Not only does not grasp the advantages of national policy support to build a solid foundation, it wants to copy the pre-emptive squats of Shanghai GM and Beijing Modern. Then take the advantage of market share to go back and cultivate its own power model. However, they do not understand that the two companies can be successfully developed in such a way and have a major relationship with the support of their strong partners. Without the full support of Hyundai and U.S. GM, Shanghai GM and Beijing Hyundai cannot. Under such a high-speed development, it will be able to maintain its own operational level while growing up.

Not only the development of self-owned brand companies has this kind of problem, does the Automaker Group not do this?

In the first two years, when the auto market was good, every family had introduced a rapid expansion policy, wishing to add more than ten or twenty 4S stores every month. It never occurred to them that the prosperity they faced at the time was only a policy encouragement. To blow out the blow-out situation, the economic development has its necessary infrastructure. At the time, the blowout was only borrowing money. When borrowing money, it was necessary to pay back. The difficulty today is that the time for repayment of debt is up.

Excessively relying on national policies, relying on government support, neglecting the core idea that state support is only short-term and the goal is to build the strength of independent brands, blind optimism and intrepidity are the main factors that these independent brands are now in trouble.

Second, the central policy is out of line with local policies, and the ass is another tragedy.

Although there are criticisms against the principals or management teams of several independent brands, they must also speak for them from another perspective. The oppression of the performance of local governments is another major force that contributes to their blindness.

Behind each independent brand, there must be support from the local government, but the price for obtaining support is to meet the performance requirements of the local government. How much support is needed, and how much return must be made. The more local companies support local brands, the worse the situation is now. Reliance on independent brands with higher levels of autonomy or autonomy is not as bad. It can be said that Cheng Xiaoxiao and Xiao He will lose.

The same standard can also be used to explain the current purchase order issue.

While suppressing real estate, the central government will always look for other industries to maintain economic growth. The auto industry is definitely the first choice in the absence of high-speed rail and political performance. However, this is the first choice for the central government, and not the local choice. What local governments have to face is not only economic issues, but also the image and experience of people’s feelings, well-being, and so on. And the latter is obviously more important than the former, because the economy is not good enough, there are many emergency methods to make up, but the people's grievances and traffic congestion are actually difficult to solve and happen every day, from the short-term fast and self-sweeping From the mentality of snow, the purchase restriction naturally becomes the optimization of the relevant local government departments (non-economic development departments). As for other departments or the central government, what can they manage? !

The disconnection between the central and local policies is a transitional stage in the improvement of the government's management capabilities. In this phase, it will produce results in all aspects. The auto market will naturally have no exceptions.

In the end, this recession is a normal cyclical phenomenon. This, combined with the financial crisis, has added to the problem.

There will be blowouts at every stage of the Chinese auto market. The originally expected blowout phenomenon should start in 2011 and continue into 2012. However, it was stimulated by government policies at that time, so it was transferred to 2009, followed by The gap between development and my predictions at the time of writing was not significant. From the data, it can be clearly seen that after each blowout, there will be a sharp decline in growth rates in one to two years. This year and next year will be in this cycle, and then will return to double-digit growth rates. Gradually revive, and then around 2015 or 2016, you should bump into the next wave of blowouts.

Of course, there is also a variable, which is mentioned at the beginning of the article. China's current SMEs have a huge problem and certainly have a negative impact, which may prolong the revival time.

It can be said that even if the government did not issue new policies at that time, the accumulated energy in the market was enough to produce a blowout. However, the introduction of incentive policies led to the explosion of this wave of energy. When the energy is rapidly depleted, the next growth rate declines. It is the law of the market, but unfortunately the industry has no psychological preparation and no concern for this rule. Instead, it has set an inappropriate growth plan during the blowout period. Just hit the head and the blood flow is normal again.

This wave of cold weather is estimated to have eased in the first half of next year. It should then develop more than normal. However, in the industry, it is now when the trembling is happening. Is anyone ready for food and troops and ready to attack the city? Prepare now and use it in the second half of next year!

In view of the above points of view, the current chaos in the auto market is caused by three factors, namely, harmony, geography, and weather. The first is the problem of self-management, the lack of predictability and professionalism of the principal or management team, the erroneous understanding of the market and the profession, and the making of wrong development decisions; the second is the disconnection between the central and local policies, the prevalence of hill-headedism, and their respective political status. Various administrative levels have caused chaos in contradictions; in times of nature, they have also encountered a low tide in the market development cycle, and the market energy has been exhausted and unable to support the market. The small market is weak, and the big market is showing a recession, which makes it even worse for the market to grow at a high single digit rate.

In such a general trend, what measures does the industry have?

Experts believe that in the short term, it is necessary to adopt a contraction policy. Whether it is a car factory or a channel, there should not be any active policies, such as expansion or promotion, which will not be of any use. Keeping the existing market share will be successful without loss. This is a matter of time. Especially in the low-end products, the impact is the most in the past year, and conservative development is the king. However, the conservativeness here refers only to the preservation of promotions and production. In the construction of networks and the establishment of brands, it is still necessary to prepare for the growth in the middle and later stages.

Because the network construction and brand building of the automobile industry must be accumulated for a period of time, waiting for the market to warm up and do it again is too slow. Of course, if you have already begun, and you are now suffering, then you will find a way to strengthen your strengths. Your past is yours. The downturn of the Chinese auto market is not long, and it will be two or three years. We can spend. The harder ones should be small and medium-sized automakers, especially those with first-tier and second-tier cities as the main hinterland. The pressure will be enormous and good luck.

The reason why the small-sized car market is not good today is that because of the early blowout, the market was dug so thoroughly that it became a hard-hit area. However, the number of markets is still huge, and the energy of new students is fast, but only the focus shifts. Younger, feminized products have much to offer. There should be better returns for these two market segments, especially in first- and second-tier cities.

The medium-sized car market should be the main force in the third- and fourth-tier cities, because the small car market is being developed here to be the most thorough, and there will be no good returns for the investment. Instead, the medium-sized car has great potential.

In addition, automobile traders who work in the first and second tier cities may wish to play football and try to develop secondary or tertiary outlets in suburban and tertiary cities.

In short, the current situation in the Chinese auto market is, in terms of stock market terms, short-term and long-term. Although the current situation is not good, there are still promising opportunities in the mid-to-long term. Wang Dao.