AutoBeta(AutoBeta.net)08/19 Report--

Speaking at the Global Automotive Industry Innovation Conference held in Beijing today, Tan Benhong, executive vice president of Changan Automobile, believes that half of all Chinese car brands will go bankrupt. "China's automobile industry has entered a comprehensive phase of elimination, and the stronger the strong, the greater the pressure on the weak. The survival of the fittest is more obvious. 50% of Chinese car brands, I think, will cease to exist for some time soon, and of course our new forces will also face greater pressure to build cars, "said Tan Benhong.

In fact, with the intensification of market competition in 2019, Chinese car brands are having a hard time. Not only do sales continue to decline, but their market share also falls below 40%, squeezed by joint venture brands, resulting in increased pressure for survival.

According to the report of the China Automobile Association, in 2019, the sales share of independent brands repeatedly fell below the red line of 40%, and fell to a low again in July. The market share of self-branded passenger cars fell as low as 36.2%, which is also below 40% for four consecutive months.

Specifically:

Sales of Chinese brand cars in July were 135000, down 16.2% from the same period last year, accounting for 18.3% of the total car sales, down 1.4% from the same period last year.

Chinese brand SUV sold 327000 vehicles in July, down 10.6% from the same period last year, accounting for 48.6% of the total SUV sales, down 9.3% from the same period last year.

In July, Chinese brand MPV sold 59000 vehicles, down 21.7% from a year earlier, accounting for 69.1% of total MPV sales, down 1.8% from a year earlier.

Generally speaking, independent brands are not dominant in the car field, the market share of SUV is declining rapidly, and the total sales of MPV is small, resulting in a rapid decline in the overall share of independent brands.

From January to July as a whole, independent brands still fell below 40%. A total of 4.551 million Chinese brand passenger cars were sold in the first seven months, down 20.8 percent from the same period last year, accounting for 39.1 percent of the total passenger car sales, down 3.9 percent from the same period last year.

The sales of the top car companies of Chinese car brands have declined, and the car companies at the bottom of the rankings are facing survival problems.

Geely is the largest car company by sales of Chinese brands, with a double-digit decline in 2019. Geely sold 91375 cars in July, down 24 percent from a year earlier. From January to July, Geely sold 743055 vehicles, down 16 percent from a year earlier. As sales fell short of expectations, Geely decided to cut its full-year sales target by 10% from 1.51 million to 1.36 million. Geely's total sales in 2018 were 1.5 million.

Sales of Great Wall cars are relatively robust. In July, Great Wall sold 60357 new cars, up 11.09% from a year earlier, thanks to an increase in sales of new models. From January to July, Great Wall Motor sold a total of 553895 new cars, an increase of 5.33% over the same period last year. But Great Wall's first-half profit fell 58% from a year earlier, and Great Wall cut its annual target to 1.07 million vehicles from 1.2 million.

The Changan automobile brand stopped falling in July, but the cumulative decline was also more than 20%. Changan auto brand sold 52481 vehicles in July, up 1.8 per cent year-on-year to 426937 from January to July, down 20.7 per cent from a year earlier, according to the Federation of passengers.

In addition, the GAC MOTOR brand sold 26596 vehicles in July, down 35.06% from the same period last year, and the cumulative sales in the first seven months were 213543, down 30.93% from the same period last year. SAIC passenger cars also fell 10.66% from January to July to 364000.

A considerable number of independent brands have difficulties in operation and even fall into suspension of production. BAIC Yinxiang, Changjiang Automobile and Huatai Motor have been exposed to stop production for arrears; veteran car chief Fengcheebao has cut wages and production; Zhongtai Junma and Guanzhi Automobile have also been caught in a production suspension scandal.

In the process of rapid market change, the low-end backward enterprises will face elimination, which is also the stage experienced by China's automobile industry at present. China's auto market has entered a stage of continuous decline in sales, and competition intensifies. What is more serious is that the share of independent brands continues to decline, and many independent brands have entered a critical moment of production survival.

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