AutoBeta(AutoBeta.net)04/28 Report--

In 2019, Beijing Automobile, which relies on Beijing Mercedes-Benz to bring huge profits, increased by 15% against the trend, with a cumulative revenue of 174.632 billion yuan, of which the related income of Beijing Mercedes-Benz was as high as 155.152 billion yuan, accounting for 89%. This also means that Beijing Automobile performance is completely "manipulated" by Mercedes-Benz.

On the evening of April 27th, Beijing Auto disclosed its latest first-quarter results, with revenue of 32.983 billion yuan in the first quarter of 2020, down 29 percent from the same period last year, and its net profit fell 95.1 percent to 60.8498 million yuan. The reason for the sharp decline in performance, Beijing Automobile said that affected by the COVID-19 epidemic, it had a huge impact on the automotive industry as a whole, so that the company's vehicle sales dropped significantly compared with the same period last year, resulting in a decline in the efficiency of the group.

Of course, the huge impact of the COVID-19 epidemic on China's auto market since 2020 has been a painful period for any domestic car company, so that more than 90% of the car companies' sales and performance have been greatly reduced.

However, judging from the specific performance of Beijing Auto's passenger car brands in the first quarter, Beijing Mercedes-Benz is its best performance brand. According to the Federation of passengers, Beijing Mercedes-Benz sold 110000 new cars in the first quarter, down 24.2% from the same period last year, significantly better than the 40.8% decline in the passenger car market in the first quarter.

Beijing Hyundai and Fujian Mercedes-Benz, the other two joint ventures, sold 66000 new cars respectively, down 50.4 per cent and 4084, and 30.5 per cent, respectively. BAIC New Energy, an independent brand, also performed poorly, selling only 9000 vehicles, down 64.1 per cent from a year earlier.

According to reason, Beijing Mercedes-Benz, which performs better than the industry as a whole, should not let Beijing Auto bring a huge decline in performance. After all, last year, Beijing Mercedes-Benz sales reached 567000, an increase of 17% against the trend, and revenue of 155.154 billion yuan, an increase of 14.58% over the same period last year. However, according to its gross profit, it only increased by 4.18% year-on-year, or about 42.215 billion yuan. In this regard, officials also explained that it is because the relatively low-priced models account for an increase in sales, in other words, Beijing Mercedes-Benz has also adopted a "price-for-volume" approach to achieve high sales growth.

This also means that under the greater impact of the COVID-19 epidemic in the domestic market, in the face of the decline in Beijing Mercedes-Benz sales, although better than the industry performance, but benefited from the brand expansion of preferential efforts to achieve sales performance. In theory, sacrificing profits can indeed get certain sales, but for Mercedes-Benz's behavior of sacrificing profits for sales, it will undoubtedly have a short-term impact on both Benz and Beijing Automobile.

After all, Beijing Mercedes-Benz's sales growth is faster than revenue growth and gross profit growth. So, in some cases, having a Mercedes-Benz brand with more outstanding sales performance does not bring much profit to Beijing Automobile. Perhaps this is also the negative news that the Beijing Mercedes-Benz brand has been exposed for "cost reduction" in the past two years.

It can be seen that at present, the overall profits of Beijing Automobile basically come from Beijing Automobile. According to the proportion of revenue in 2019, Beijing Mercedes-Benz accounts for 88.8%, which also shows that Mercedes-Benz is good for BAIC, and its performance is not good. BAIC naturally has a hard time. After all, the current performance of Beijing Hyundai and its own brands does not help BAIC bring much change.

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