Industry Focus

Comparing Chinese Automotive
Fastener Market Demand Beforeand After the Pandemic
中國疫情前後車用扣件市場景氣比較
Automotive fasteners are an important component of the automotive industry, as they are used in the assembly and construction ofvehicles. While specific statistics for automotive fasteners may vary, they are generally considered to be closely related to overall automotivestatistics. Here are some potential connections between automotive fastener statistics and broader automotive trends. The number of fasteners
used in a car can vary depending on the make and model, as well as the specific components and parts used in the vehicle. However, onaverage, a typical car is estimated to have around 3,000 to 4,000 fasteners. These fasteners can include a wide range of types and sizes,including bolts, screws, nuts, washers, and clips, among others. The exact number and type of fasteners used in a car can vary depending on
factors like vehicle size, weight, and intended use, as well as the manufacturer's design choices and production processes. Therefore, analysing
the automotive industry in China can illuminate the situation of automotive fastener situation in this country.

Chinese Automotive Market Before the Pandemic

China Fastener World no.68/2023

Chinese automotive industry has long been considered one of thelargest and fastest-growing industries in the world, and for a goodreason. In 2019, China produced over 25 million vehicles, accounting
for approximately 30% of the global production, providing employment
for millions of people and being a significant contributor to the Chinese
economy.
However, the outbreak of COVID-19 in early 2020 had a significant
impact on the industry, with vehicle production and sales in China
declining sharply in the first quarter of the year due to the lockdowns andtravel restrictions imposed to contain the spread of the virus.
Despite this initial setback, Chinese automotive industry showed signsof recovery in the second half of the year as the Chinese government
implemented measures to stimulate demand and support the industry'srecovery. According to the data from China Association of Automobile
Manufacturers (CAAM), vehicle sales in China reached 25.3 million
units in 2019, representing a 9.6% decline from the previous year.
However, the industr y rebounded in 2020, with vehicle sales
increasing by 6.4% to 25.3 million units.

076 惠達雜誌The recovery was driven by increased demand for newenergy vehicles, which saw a sales increase of 10.9% in 2020.
This increase was partly due to the Chinese government'spromotion of new energy vehicles and the implementation ofpolicies to support the development of the industry.
In ter ms of production, the pandem ic also had asignificant impact, with China producing 25.72 million
vehicles in 2019, but production declining by 2% in 2020
to 25.24 million units. However, the production of newenergy vehicles increased by 10.9% to 1.37 million units
in 2020, indicating a growing interest in sustainable andenvironmentally friendly modes of transportation.
The recovery of the Chinese automotive industry has
been a significant boost to the country's economy, as itprovides employment for millions of people and contributes
significantly to GDP. The Chinese government's measures tostimulate demand and support the industry's recovery havealso been instrumental in its resurgence.

Industry Focus
In conclusion, while the outbreak of COVID-19 had a significant
impact on the Chinese automotive industry, the industry showedremarkable resilience in bouncing back in the second half of 2020.
Increased demand for new energy vehicles and the implementation of
government policies to support the industry's recovery were crucial
factors in this rebound. Chinese automotive industry remains a key
player in the global market and will continue to be a significant
contributor to the Chinese economy in the years to come.

Chinese Automotive Market After the Pandemic
According to industry reports and projections, Chinese automotive
industry is set to continue its recovery in 2022 and 2023 after thedisruptions caused by the pandemic. Despite the challenges faced by theindustry in recent years, several factors are expected to contribute to its
growth in the coming years.
1.

Strong domestic demand is a major driver of the industry'sgrowth. Chinese government has implemented measures tosupport the domestic auto market, including tax cuts andincentives for new energy vehicles. The growing middle classin China is also expected to continue driving demand forvehicles, particularly SUVs and luxury cars.

2.

Another key factor is continued growth in new energy vehicles(NEVs). China is already the largest market for NEVs, andthe government has set ambitious targets for their adoption.
The production and sales of NEVs are expected to continue
growing, driven by subsidies, incentives, and stricter emissions
regulations.

3.

Digitalization and automation are also playing a crucial rolein the industry's recovery. Chinese automakers are investingheavily in technologies such as 5G, artificial intelligence,and robotics to improve efficiency, reduce costs, and enhancecompetitiveness.

4.

In addition, China's Belt and Road Initiative is expected tocreate new export opportunities for Chinese automakers,
further fuelling the industry's growth.

China Fastener World no.68/2023

Chinese carmakers produced 27.02 million units in 2022,
up by 3.4% year on year, while sales rose by 2.1% to 26.86
million units, the data from the China Association of Automobile
Manufacturers (CAAM) shows. The year-on-on year growth in output
and sales last year came despite multiple headwinds faced by theChinese automotive industry, including the resurgence of Covid-19,
a shortage of semiconductor chips, high battery raw materials prices
and an unstable geopolitical situation, CAAM said. The purchase tax
for vehicles priced below 300,000 yuan (US$45,000) and with 2-literor smaller engines was 5% of the sticker price between June 1 andDecember 31, 2022, down from 10% previously, according to China’s
Ministry of Finance. In December 2022, China’s automobile output
totalled 2.38 million units, down by 0.3% month on month and down by

18.2% year on year. Sales reached 2.56 million units last month,
up by 9.7% month on month but down by 8.4% year on year.
The rapid spread of Covid-19 in China following the relaxationof the country’s Zero Covid policy during December resulted ina decrease in consumer activity. As a result, automobile output
and sales did not achieve the expected growth for the month,
CAAM said. China’s output and sales of electric vehicles (EVs),
meanwhile, continued to register strong growth in 2022, bothsetting fresh record highs in the final month of the year. EVoutput in China totalled 7.1 million units in 2022, an increase of
96.9% year on year, while sales of such vehicles rose by 93.4% toreach 6.89 million units. For December 2022, EV output cameto 795,000 units, up by 3.52% month on month and up by 51.80%
year on year. EV sales totalled 814,000 units last month, up by
3.56% month on month and up by 51.80% year on year.6
Car Production in China increased to 1,715,000 units(1,715K units) in February 2023; it was 1,397,000 units(1,397K units) in January 20237.

The Future of Car Manufacturing in China
Potential statistics that were projected include vehicle
sales in China growing at an average annual rate of 2.1% from2021 to 2025, reaching around 30 million units by 2025. NEV
sales in China are projected to reach 6.6 million units by 2025,
accounting for over 20% of total vehicle sales. China's shareof the global NEV market is expected to grow to over 50%
by 2030, up from around 45% in 2020. The market share ofChinese automakers in the global automotive market is expected
to increase to around 20% by 2025, up from around 12% in 2019.
Chinese automotive aftermarket is expected to grow at anaverage annual rate of 9.2% from 2020 to 2025, reachingaround RMB 2.8 trillion (USD 400 billion) by 2025.
Overall, Chinese automotive industry is expected tocontinue its upward trajectory in the coming years, driven bystrong domestic demand, growth in NEVs, digitalization andautomation, and expanding export opportunities.

References:
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China Association of Automobile Manufacturers (CAAM). (2021). 2020 Automotive Industry Report. https://www.caam.org.cn/xinwen/gonggao/20210108/249804.html (in Chinese)
China Association of Automobile Manufacturers (CAAM). (2020). CAAM: China's Automobile Market in April
2020. https://www.caam.org.cn/xinwen/gonggao/20200514/244691.html (in Chinese)Gao, Y. (2021). Chinese Auto Industry Recovery. International Trade Administration. https://www.trade.gov/knowledge-product/chinese-auto-industry-recovery
Li, C., & Dai, X. (2021). China's 2020 Vehicle Sales Rebound, But Global Chip Shortage Looms. Nikkei Asia. https://asia.nikkei.
com/Business/Automobiles/China-s-2020-vehicle-sales-rebound-but-global-chip-shortage-looms
Statista. (2021). China: Passenger Cars in Use 2009-2020. https://www.statista.com/statistics/278634/passenger-cars-in-use-in-china/
https://www.fastmarkets.com/insights/chinese-automobile-output-sales-rise
https://take-profit.org/en/statistics/car-production/china/

Article by: Behrooz Lotfian078 惠達雜誌

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