Recently, many netizens have noticed a retaliatory price hike in the local food and beverage industry (the original discounts are no longer available, and the food prices have become more expensive).

So, after the epidemic gradually eases and ends, will automobiles, as a bulk consumer product, also see a revenge price rebound? If we look at the market supply and demand, the auto market will also probable usher in a round of price increase (discount shrinkage).

Short supply of car companies

From the supply level.

The epidemic that ravaged China, especially Hubei, in February led to the shutdown of production and labor at the vast majority of OEMs, with Wuhan-based Dongfeng Passenger Vehicle, Dongfeng Nissan, Dongfeng Honda, and Shenlong Automobile only gradually resuming work at the end of March.

While other car companies, including FAW-Volkswagen, SAIC-Volkswagen, SAIC-GM, GAC-Toyota, Geely, Great Wall, Chang'an and other car companies due to the optimistic control of the epidemic in their regions, the first step back to work, but Wuhan as an automobile city also has a part of the domestic automobile parts manufacturers, such as Valeo, BorgWarner, Bosch, Weissbase, Garett and so on for the country's supply, most of the independent brands, joint venture brand car Production has been affected to a greater or lesser extent, resulting in a reduction in production capacity and a shortage of supply.

When China's auto industry is back on track, the European and American auto markets are "relayed" to a halt due to the global spread of the epidemic. Volkswagen Group CEO Dies recently a "no revenue outside the Chinese market", regardless of whether there is an exaggerated component, but also a true reflection of the situation of overseas car companies production, supply and sales.

For example, in Europe, the five countries with the worst epidemics -- Italy, Spain, Germany, France and Britain -- accounted for 68 percent of the total number of cars in Europe. Multinational industry giants Volkswagen, Mercedes-Benz, BMW, Audi, PSA, FCA, Renault have announced the closure of vehicle manufacturing plants in Europe and North America, Bosch, Continental subsequently suspended production in European plants, more than 100 more than the automobile-related industry shutdowns of these luxury brands and imported brands in the domestic automobile supply has caused a huge impact.

Some time ago there were media reports that BMW canceled production plans for some customer-ordered models due to capacity issues, including the F52 (domestic 1-series trim level), G28 (domestic 3-series long-wheelbase), G38 (domestic 5-series long-wheelbase), and G08 (domestic X3), and then a number of BMW dealerships reduced their terminal discounts and began to implement new offers.

It's not hard to understand that the reason behind the reduction or cancelation of terminal offers at BMW Brilliance 4S stores is the lack of supply in the market. This is not an isolated case, Porsche, Mercedes-Benz and Audi followed BMW and also started to implement the new offer. With the majority of dealers digesting their February inventory, the supply pressure on luxury brands, especially imported models, will increase in April and May.

User demand is growing

Looking at the market demand level again.

On the one hand, there is a consumer market.

Passenger Federation data show that in the first quarter of this year, the domestic passenger car market cumulative retail sales of only 3.014 million units, a year-on-year decline of 40.8%, while the same period last year sales of more than 5.2 million units. The passenger association predicted a cumulative sales loss of about 2.09 million units, but this part of the loss is not a structural decline, but by the impact of the epidemic, just demand consumers lagged behind the time of purchase, which means that the two million or so sales will be in the second quarter or three or four quarters of the concentration of the outbreak.

On the other hand is the psychology of consumption.

Just like the catering industry's retaliatory consumption, as well as the tourism industry's retaliatory travel, home suppressed 2 months of consumers, in the manufacturers of wave after wave of cloud live, online showroom marketing brainwashing, the automotive market will usher in a wave of retaliatory consumption of rigid demand.

Not only this, the impact of the epidemic will also give birth to a number of new rigid demand: because the public **** transportation makes people inconvenient, uneasy, will force those who were not in a hurry to buy a car in advance of the consumption of users; at the same time have a car will be because of the space, configuration and the air environment inside the car, the comfort of the ride and so on, to produce a change of purchase ideas.

Recently, J.D.?Power released a survey report on the impact of the new Crown pneumonia epidemic on consumers' willingness to buy cars. The results of the survey show that:

Some consumers' enthusiasm for purchasing a car has been stimulated by the impact of the epidemic. Nearly half of those who do not plan to buy a car consider buying a car, 25.1% of those who plan to buy a car to buy a car ahead of time.

An invisible hand

Of course, and Haidilao in the catering industry and different, China's auto industry and does not rely entirely on the market competition of the price system, as second only to the real estate bulk of consumer goods, the car is subject to strict policy regulation, the introduction of each policy has a direct impact on the automotive consumer market turnover and price changes.

On February 3, Foshan, Guangdong Province, took the lead in the introduction of measures to consumers in the local registration of automobile sales enterprises to buy the "National Six" standard displacement cars, to give each vehicle ranging from 2,000 to 5,000 yuan of financial subsidies to become the first 2020 to launch a policy of encouraging automobile consumption in the city.

Subsequently, eight cities introduced related policies, specific measures covering the encouragement of relaxation of traditional automobile purchase restriction license plate, encourage the consumption of "National Six" standard models, encourage the trade-in of old cars, promote the automobile to the countryside, and give the relevant models, especially new energy vehicles subsidies and other aspects.

March 31, the State Council executive meeting, clearly pointed out that in order to promote automobile consumption, a new energy vehicle purchase subsidies and exemption from the purchase tax policy extended for two years; the second is the central government to take awards in lieu of subsidies to support the Beijing-Tianjin-Hebei and other key areas of the phase-out of diesel trucks with emissions standards of the National III and below; the third is a second-hand car dealerships sales of used cars from May 1 to the end of 2023 to reduce sales by 0.5% VAT.

This, the purchase tax reduction is the most direct, is the immediate effect of the policy, the reduction in 2009 directly led to the domestic car sales jumped 46.2%, the same car purchase subsidies; and "car to the countryside" more or less can boost the four or five cities of the consumption potential, the adjustment of the tax on second-hand cars is believed to also increase the volume of transactions in the used car market. The second-hand car market will also increase the volume of transactions.

All in all, it can be seen very clearly: the focus of the policy in 2020 is to "promote automobile consumption". That is, to further stimulate consumer demand, boost sales.

So based on the supply and demand relationship in the market, the shrinking supply of car companies, the further expansion of market demand, supply is less than demand, coupled with the policy to the demand side of the tilt, with the government bottoming out, the overall price of the car market in the overall probability of the next will have a certain degree of increase (preferential shrinkage). Of course, there will be differences between different brands and models.

Which brands and models will increase prices?

First, luxury brands are most likely to see their discounts shrink.

Taking BBA as an example, there are media reports that the number of customer arrivals at Mercedes-Benz, BMW and Audi 4S stores has increased significantly, basically reaching the number of arrivals before the epidemic. Mercedes-Benz 4S store sales said:

"There are more people now, the price has gone up a bit, the C260 is now discounted at about 40,000 yuan, before the discounts have to be even greater";

BMW sales said:

"Starting from the end of March, the 325 long axle

BMW sales said:

"Since the end of March, the 325 long-wheel drive has increased in price by about 5,000 yuan, and now orders should have been lined up until July, so it's only natural that prices will go up."

Audi 4S stores have likewise narrowed down the rate of reductions for main models such as the A4L and A6L after the Ching Ming Festival.

The impact of imported brands is even greater, suffering from the outbreak of the epidemic in Europe and the United States out of control, from vehicle production to the supply chain system will be greater fluctuations, which in turn affects the production capacity, and the scarcity of goods, prices naturally rise. Porsche and Lexus have also seen varying degrees of increases.

Secondly, the prices of hot-selling models have also tended to fluctuate upwards.

B-class cars like the Accord and Camry, and A-class cars like the Civic and Ranger have also seen some fluctuations as demand rises and production capacity fails to keep up. In the case of the Accord, for example, the current cash discount is about 10,000 yuan, while the discount before the epidemic was at 15,000 yuan (different regional discounts vary).

Third, car companies follow the trend of price increases (narrowing the margin of discount).

It cannot be ruled out that some car companies are adopting the same market strategy because they see other car companies narrowing their discount margins. During the epidemic period, car companies have increased their discounts for the sake of sales, and it is normal for them to reduce their discounts after the epidemic ends as the number of car buyers increases.

Summary

So, based on the changes in market supply and demand and policy guidance, we believe that the end of the epidemic, a certain range of price increases (discounts narrowed) is the probability of events, and even do not rule out the price of some hot cars, luxury imports of the vengeance rebound.

For those consumers who just need or want to change the purchase, Tianya Jun recommended that the car as soon as possible to buy a car, one to avoid the narrowing of the car price concessions, buy a car more money, and secondly, to avoid the late retaliatory consumption, the growth of traffic, affecting the quality of the service you buy a car; thirdly, the production capacity of the hot models are affected by the subsequent withdrawal of the car may take longer.

This article comes from the author of the automobile home car family number, does not represent the views of the automobile home position.