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Changan Automobile, which has the reputation of "profit Milk year", once ranked first among domestic independent car brands, but now Changan Automobile is gradually being left behind by many other independent brand car companies more and more farther and farther. It has even slipped down the second ladder of domestic brands.

On January 30, Changan Automobile issued the latest performance forecast, which estimated that the company would lose 2.4 billion-2.9 billion yuan for the whole of 2019, while the company still made a profit of 680 million yuan in the same period last year. The profit changed from profit to loss, a drop of as much as 452.56%, 526% compared with the previous year. As for the sharp decline in the 2019 performance forecast, Changan Automobile explained that it was "affected by the decline in sales".

In 2019, the production and sales of almost all brands of Changan Automobile decreased. Except for the slight increase in production and sales of Changan in Hefei, the production and sales data of Changan Ford, Changan Mazda, Chongqing Changan and other brands decreased significantly compared with the same period last year.

It is conceivable that Changan Automobile used to be the leading enterprise in the domestic independent brand car enterprises. With the best-selling joint venture brands and sales of its own-brand models exceeding 1 million for the first time, the net profit reached 9.95 billion yuan in 2015, and in 2016, the net profit rose to 10.2 billion yuan, twice that of Geely Motors at this time. But now it has been overtaken by Geely and Great Wall, and even fell down the second ladder among independent-brand car companies.

According to the sales data released by Changan Automobile, the independent brand performed better than the joint venture brand in 2019 and was mediocre in the first half of the year, but with the launch of new products, it achieved five consecutive months of month-on-month growth in the second half of the year, among which the passenger car part, Changan CS75 (parameters | inquiry), Changan CS35, Changan CS55, Changan Escape and other products performed well and became the main sales responsibility of Changan.

In terms of specific models, CS75 has become the best-selling model of Changan Chinese brand, with cumulative sales of 193200 vehicles for the whole year, an increase of 37.7% over the same period last year. CS35 followed closely with cumulative sales of 141700 vehicles, up 7.5 per cent from a year earlier. The annual sales of Yitou and CS55 were 124000 and 112200 respectively, down 1.5% and 32.1%, respectively.

Among the joint venture brands, Changan Ford sold 184000 vehicles in 2019, down 51.3% from the same period last year, while Changan Mazda sold 133600 vehicles in 2019, down 19.7% from the same period last year. The sharp decline in sales of the two joint venture brands is also the main reason for the sharp loss of Changan automobile profits, the most important of which is affected by Changan Ford.

Changan Automobile has said that the primary reason for the decline is the weakness of Changan Ford. In 2018, Changan Ford's sales peaked in 2016, with a cumulative sales of 958000 vehicles, but sales fell sharply in the following two years, almost halving in 2017 and 2018 to 812000 and 378000 respectively, and halving sales to only 184000 in 2019. If it continues in the long run, Changan's performance will be affected again.

With the decline in sales so that the performance of Changan Automobile continues to decline, from 2016 to 2017, Changan deducted non-post-profit of 9.4 billion yuan and 5.7 billion yuan. By the third quarter of this year, Chang'an had made continuous losses, and even if the huge subsidies were taken into account, the cumulative loss of Chang'an in the first three quarters was as high as 2.66 billion yuan, changing from an independent elder brother to a major one.

In addition, due to the mediocre sales of DS, a French high-end brand held by Changan Automobile, DS has lost more than 1 billion yuan after five years in China. As a result, the serious decline in DS sales has also become a burden for Changan Automobile. On October 28th last year, Changan Automobile officially listed for sale of 50% stake in Changan Peugeot Citroen Motor Co., Ltd. (Changan PSA).

There are reasons for Ford's severe decline, such as weak introduction of new products, slow introduction of new models, lack of dealer and brand promotion, and three-cylinder engine models promoted in recent years, but failed to be recognized by consumers. Although the sales performance of independent brands is relatively stable, the sharp decline of joint venture brands will only have a greater and greater impact on Changan Automobile if it does not change in time.

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