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What are new changes in Chinese auto industry in 2016?

Source: | Date: Dec. 10

  • The Chinese auto industry will finish this year with moderate growth, despite government incentives to save the industry's sales slump paying off to some extent. With three weeks away from 2016, the auto industry will see some new changes in the coming year, according to one industry analyst. He points out four new trends that he forecasts will dominate the Chinese auto industry in the new year.

  • First, he predicts that the industry of new-energy vehicles (NEVs) will become increasingly popular among consumers. He explains that the rising NEV industry stems from two reasons - the pressure of protecting the environment and reducing greenhouse gas emissions, as well as the government's strong desire to catch up with global auto giants in automotive technologies. Many Chinese provinces have imposed restrictions on the purchase of petrol cars while allowing customers to buy NEVs without any restrictions, with the aim of forcing automakers to develop and promote NEVs.

  • Second, he says eco-friendly cars will be popular among consumers. According to him, although the concept of eco-friendly cars has not been clearly defined, it is sure that cars that are friendly to eco-system and the environment will be accepted and used extensively in the future.

  • Third, he predicts that a large number of car dealers will be phased out due to declining car sales that have reduced automakers' profits. He says the bulk of dealers will either be shut down or merged by larger dealer groups. Automakers will face a similar situation, in which a number of automakers are expected to get involved in mergers and acquisitions (M&A).

  • Finally, the analyst predicts that auto ecommerce, which refers to selling cars via online shopping channels, will be popular. China now has 668 million netizens and the rate of computer popularization has reached 48.8%, with the number of mobile network users climbing to 594 million. This is an enormous customer base for any company wishing to do ecommerce.