AutoBeta(AutoBeta.net)08/11 Report--

Sales in China's auto market fell for the 12th month in a row, as prices cut and inventory clearance finally saw a year-on-year increase in sales in June, followed by an early consumer overdraft that led to a further decline in July. The cumulative sales of passenger cars in China from January to July reached 11.44 million, down 8.8 per cent from a year earlier, according to the Federation of passengers. Gone are the days when the auto industry lay to make money, and some joint ventures and independent brands have difficulties in survival.

Chongqing is one of the "China Automobile cities", which gathers many independent and joint venture brands and auto parts supporting industries, but the decline in sales and brand decline has led to a sharp decline in the auto industry. A few days ago, the Liangjiang New area of Chongqing released a list of subsidies for "stable post return of difficult enterprises". More than 30 automobile companies, including Changan Ford Motor Co., Ltd., SAIC Iveco Hongyan, Yanfeng Andotuo, Yanfeng automobile accessories, and so on, have become difficult enterprises. Changan Ford received a subsidy of 140 million.

Most of the list are automobile enterprises and auto parts supporting enterprises, and the current layoff rate is low. Chongqing Liangjiang New District said, in accordance with the "Chongqing Bureau of Human Resources and Social Security and other five departments on doing a good job of unemployment insurance to support the stable jobs of enterprises in difficulties" and "Chongqing Office of Human Resources and Social Security Bureau on doing a good job of unemployment insurance to support the stability of enterprises related to the requirements of the notice", after examination and approval It is proposed to determine 39 enterprises, including SAIC Iveco Hongyan Commercial vehicle Co., Ltd., as the first batch of stable post return units to enjoy difficulties.

It is clear that the move will delay the massive layoffs of struggling companies, especially in the battered auto industry.

According to the performance forecast for the first half of 2019 issued by Chongqing Changan Automobile Co., Ltd., the net loss in the first half of 2019 was as high as 19-2.6 billion yuan due to the decline in sales. Changan brands and joint venture brands are in dire straits, of which Changan Ford has been the pillar of Changan's profits, with sales of 75000 vehicles in the first half and 227700 vehicles in the same period last year, down 67 per cent from the same period last year.

According to statistics, Changan Ford made a profit of 12.2 billion yuan in 2017 and lost 800 million yuan in 2018, which will be even more severe in 2019. In early June, Changan Ford Motor Co., Ltd. was fined 162.8 million yuan for implementing a vertical monopoly agreement.

Changan Ford said that new focus, Fox Active crossover, new Ruijie family and new Taurus will be launched one after another in the second half of 2019, which will help improve sales performance. Chen Anning, president of Ford China, said Ford would "take three years to restore the brand to a strong position and lay a real foundation".

In fact, the efficiency of automobile enterprises and auto parts enterprises is not good, layoffs and factory closures have become a major topic in 2019.

Not long ago, it was revealed that DPCA, a joint venture between Peugeot-Citroen and Dongfeng, was about to close its first factory in Wuhan, while the second plant was packaged and sold as a whole, and production capacity would be transferred to the third plant in Wuhan and the Chengdu plant. At the same time, there are plans to cut several thousand jobs, from the existing 8000 employees to 4000 within three years. DPCA lost nearly 2.5 billion yuan in the first half of 2019, with cumulative sales of only 63027 units, down 60 per cent from a year earlier.

At the end of July, there were media reports that Foggia, a maker of car seats, exhaust, interior and electronics and the world's 10th largest auto parts giant, would close seven unprofitable factories in the Chinese market and cut jobs by 17%, thereby reducing operating costs. The person in charge of Foggia China responded, "We did not close the factory, but just optimize and integrate the business, adjust or relocate the relevant factories." For example, the original two factories in Hangzhou moved to Haining, and the Foshan factory was merged into the Guangzhou factory, which is closer to it.

With the automobile industry in the doldrums, enterprises and supporting industries suffer, layoffs and factory closures are inevitable, and many automobile companies, such as company commander Anford and Yan Feng an Daotuo, have become difficult enterprises supported by the local government. how long will this situation continue?

Welcome to subscribe to the WeChat public account "Automotive Industry Focus" to get the first-hand insider information on the automotive industry and talk about things in the automotive circle. Welcome to break the news! WeChat ID autoWechat