Parts prices have become a major trend, more enterprises may join

The rising price of auto parts is the trend of the times, and the price of the whole vehicle is weak
In this special period of the epidemic, Radisson intelligence is one of the few parts enterprises that publicly announced price increases. Nevertheless, a larger price rise is on the way.
According to the survey, 71% of the participants believe that there will be more parts companies to join the price hike. An important criterion is the duration of the epidemic. According to the survey, 75% of the participants believe that the epidemic will continue for more than 3 months, 42% of the participants believe that the epidemic will continue for 3-6 months, and 33% of the participants believe that the epidemic will last for 6 months or even longer.
A longer duration of the epidemic will mean longer downtime and less production capacity for parts enterprises, which will undoubtedly further aggravate the situation of “more monks and fewer employees” in key parts. For example, the novel coronavirus epidemic is spreading overseas, such as the MLCC area. Many countries take the “closed city” means, and many local and overseas factories such as Murata and Samsung motor are facing downtime or logistics restrictions. The supply of short-term correlates directly affects the global supply of passive components, and the price increases have become the trend. Some analysts predict that in the new round of price rise of electronic components, MLCC, resistor, silicon wafer, crystal oscillator, CCL, storage, panel, LED chip, etc. are all immune.
Only 17% of the participants believe that there will be no more enterprises joining the price rise tide in the future. Although the production capacity of many upstream raw material suppliers is tight, Tier1 and vehicle factories in the downstream have also been greatly impacted by the epidemic. Some enterprises in key epidemic areas have even had to continue to extend the shutdown time. As a result, the demand for related parts and components in the downstream has also declined significantly. In the case of weak supply and demand, the market lacks the driving force to raise prices. “The price of the company’s products is essentially adjusted according to market supply and demand, not determined by the epidemic situation.” So says an employee of an MLCC company.
Then, will the price rise of parts lead to the rise of vehicle price in the later period? Take MLCC as an example. On ordinary vehicles, the amount of MLCC used in each vehicle is about 3000 ~ 4000, which can reach 10000 in new energy vehicles. Pure electric vehicles need more, up to 18000. Now MLCC has the trend of rising price, does it mean that the price of the whole vehicle will also rise?
According to the survey, only 18% of the participants thought that there was such a possibility, and 45% of the participants thought that the price of the whole vehicle would not rise in the future. Recently, some consumers are worried that the large-scale shutdown of overseas car companies will cause supply tension, especially the shortage of imported cars, such as Lexus, so the car companies will take the opportunity to raise prices. However, after careful observation, the author finds that there is no sign of price increase in the market and there is no good support for price increase. Sales volume is the best explanation.
According to the latest statistical data, although China’s automobile production and sales exceeded 1.4 million in March, reaching 1.422 million and 1.430 million respectively, with a growth rate of 399.2% and 361.4% on a month on month basis, the rebound is obvious. However, compared with the same period in 2019, there is still a big gap, with the decline rate reaching 44.5% and 43.3% respectively. From January to March, the total sales of new cars were not optimistic, only 3.474 million and 3.672 million vehicles were completed, down 45.2% and 42.4% respectively. Of course, with the gradual improvement of the domestic car market, the car companies will definitely not raise prices at this time, which will dampen the enthusiasm of consumers to buy cars.
It is worth mentioning that with the support of national and local policies, consumers will not increase the price of cars in the near future, but will enjoy a certain amount of preferential treatment. According to the incomplete statistics of Gasch automobile, in order to further boost the automobile market and promote the steady growth of local automobile industry, in recent two months, Shanxi, Sichuan, Guangzhou, Ningbo, Yantai, Changchun, Nanchang, Changsha, Xiangtan and other provinces and cities have issued car purchase subsidy policies, with subsidies ranging from 1000 yuan to 23000 yuan. Therefore, consumers who have a demand for cars can consider selling in the near future.