AutoBeta(AutoBeta.net)08/10 Report--

Under many unfavorable factors, such as the economic downturn in 2019, the upgrading of consumption, the continuous decline in the trend of domestic car sales, the subsidy retreat of new energy vehicles, and the switch from national five to national six models, the car market is generally rated as "the worst car market that car companies have ever taken."

As of July 31, more than 60 listed automobile companies have successively disclosed their performance forecasts for the first half of 2019. Among them, the performance pre-decline accounts for 44.26% of the total number of enterprises, the pre-increase, turnround and profit-making enterprises account for 24.59% of the total, and the loss-making enterprises are as high as 27.87%.

As for the reasons for the losses, some companies pointed out in the statement of performance changes that due to changes in the domestic macroeconomic environment, the prosperity of China's automobile industry continued to decline, and production and sales continued to decline compared with the same period last year, resulting in a decrease in sales revenue and a decline in gross profit margin.

In the first half of the year, more than 2/3 of vehicle companies predicted a decline in profits, even independent head companies such as Geely and Great Wall. The one with the largest loss in the first half of the year is Changan Automobile, which is expected to lose 1.9 billion to 2.6 billion yuan, down 218.04% from the same period last year. Geely also issued a performance warning, saying net profit would fall by about 40 per cent in the first half of 2019, compared with 6.67 billion yuan in the same period last year.

In addition, the net profit of Great Wall, Jiangling, FAW sedan and seahorse is expected to drop by 58.6%, 81.55%, 83.93% to 88.88%, 50% respectively. FAW Xiali is expected to lose 530 million to 630 million yuan. DPCA is expected to lose 2.532 billion yuan, and it has even been revealed that in order to contain huge losses as soon as possible, DPCA has agreed to close a Wuhan factory and sell a factory, cutting the total number of employees in half to 4000.

For now, the "cold winter" of the car market will continue, and the China Automobile Association recently lowered its sales forecast for this year's domestic car market from 28 million to 26.68 million, down 5 per cent from a year earlier. At the same time, some car companies have lowered their annual sales targets. Under the heavy pressure of difficulties in making profits, car companies have sought their own ways to make a living, and some car companies have begun to sell the asset baggage of debt and poor profitability.

However, with the rise of new car-building forces in recent years, the situation is also very difficult. The rapid development of the new energy market benefits from the strong policy support and the huge investment of automobile companies in recent years.

Now that the subsidy has declined, many enterprises' initial funds have been exhausted in the budget, so if there is no large amount of funds in the later stage, the enterprises will be in jeopardy. And some car companies have now begun to face marginalization, becoming the existence of "dispensable" or even "roughly ignored" in the industry. Now the dividend period of new energy vehicles has passed, and some car companies have disappeared after they can no longer get government subsidies.

Throughout the first half of the year, new power brand sales accounted for only 9% of the total sales of new energy pure electric vehicles, and NIO, Weimar and Xiaopeng also accounted for the vast majority of the share, followed by Xiaopeng with the largest delivery volume of 9596 vehicles, followed by Weima, which delivered a total of 8536 vehicles, and NIO ranked third with 7542 new cars. The sales performance of other new power manufacturers is even more dismal.

Some industry insiders have predicted that the current situation of the downward auto market may become the new normal in the next few years, and there are even more pessimistic voices that some global auto giants will fall in this round of shock. Let's not talk about whether this view is credible or not.

Cui Dongshu, secretary-general of the Joint passenger car Market Information Association, said: "the grim situation in the domestic auto market has led to increasing pressure on car companies, while in fact the decline in sales may accelerate the elimination of unqualified car companies." It also means that the automobile industry is undergoing an unprecedented change, and if you want to get a share of the "cake" in the second half of the year, you need the real strength and skills of the car companies.

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