AutoBeta(AutoBeta.net)09/02 Report--

Many car dealer groups have been greatly affected by the impact of this year's epidemic. Following Zhengtong Motors' frequent incidents of safeguarding consumers' rights due to "group capital problems" and "non-redemption certificates", profits have changed from profit to loss. Guanghui Automobile, as the largest car dealer group in China, has also fallen into a big decline, which shows that the market situation is particularly difficult this year.

According to the latest mid-year results released by Guanghui Automobile, the company achieved 66.077 billion yuan in revenue in the first half of the year, down 18.13 percent from the same period last year, and its net profit was 501 million yuan, down 66.82 percent from the same period last year. After deducting non-recurring gains and losses, its net profit also plunged 64.74% to 479 million yuan.

It is worth noting that Guanghui Group was still in a state of loss in the first quarter of this year, with a net profit loss of 397 million yuan, down 149.58 percent compared with 801 million yuan in the same period last year. Thanks to the recovery of the market in the second quarter, its year-on-year decline narrowed sharply compared with the first quarter, with operating revenue of 40.472 billion yuan, an increase of 58.06% from the previous quarter. In the same period, the net profit returned to the mother was 898 million yuan, an increase of 26.76% over the same period last year.

Data show that by the end of the first half of the year, Guanghui Group had more than 50 passenger car brands of different grades from ultra-luxury, luxury to middle and high end, as well as 824 distribution outlets, covering 28 provinces, autonomous regions and municipalities directly under the Central Government, so that the company has 13.32 million base plate customers. But it also failed to withstand the impact of the COVID-19 epidemic and did not achieve a rebound in performance until the market recovered.

From January to June this year, domestic automobile production and sales fell 16.8% and 16.9% respectively compared with the same period last year, according to the China Association of Automobile Manufacturers. In the first quarter, sales even fell by 37.76% compared with the same period last year, especially the epidemic in February and March, which fell off a cliff on the demand side, which had the most serious impact on the automobile consumer market. However, since April, most dealers have made a significant recovery, gradually returning to the level range of nearly 3 years.

At the same time, Guanghui Automobile said that for the declining environment of the industry market in the first half of the year, it was through communication with manufacturers to obtain favorable business policies; through internal resource sharing to alleviate inventory pressure; and ERP management system to strengthen monitoring and improve operational efficiency, so as to achieve the recovery of vehicle sales.

As for maintenance services, in view of the special period of the epidemic, the Group also provides customers with innovative services such as door-to-door pick-up and return after repair, so as to improve customer stickiness and then enhance the maintenance scale.

And with the gradual transformation of the current domestic automobile market to the direction of high quality, the proportion of the luxury market is further higher. To this end, in the first half of the year, the company eliminated some weak brands and improved storefronts with little space, and the brand structure continued to be optimized. The proportion of luxury car sales increased to 23.5% from 20.5% at the beginning of the year, an increase of 3 percentage points over the same period last year. In the first half of the year, a total of 28 new authorized stores were applied to the mainframe factory, including BMW, Mercedes-Benz, Audi, Volvo, FAW Toyota and other brands.

In addition, due to the abnormal sound of the epidemic, many dealers fell into financial problems and redemption certificates and other problems, also appeared in Guanghui Group. It is reported that as of June 30 this year, Guanghui Motor's total debt was 90.636 billion yuan, the asset-liability ratio was 66.69%, and the company's shareholder pledge ratio was 45.90%.

However, for the reasons for equity pledge, the company said that it is mainly used to supplement the daily working capital of Guanghui Group. As for the repayment of funds, the source of funds mainly comes from its own and self-raised funds. At present, the group has sufficient capital solvency.

On the whole, the declining market this year, coupled with the impact of the epidemic, is bound to become a "dark moment" for the automobile industry. Data show that the sales volume of 80% of car dealers in the first half of this year showed negative growth. Therefore, Guanghui Automobile, which is the "leader" of domestic dealers, is already a superior performance to achieve profits. As for the second half of the year, the Group may continue to benefit from the growth of new luxury car sales and the continued expansion of the subsequent market.

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