AutoBeta(AutoBeta.net)08/31 Report--

Due to the sharp decline in sales and the poor performance of independent and joint venture brands, the half-year loss of Changan Automobile reached an all-time high. On August 30th, Changan Automobile released its semi-annual performance report, with operating income of 29.876 billion yuan, down 16.18% from the same period last year. The net profit belonging to listed shareholders was-2.24 billion yuan, down 239.17% from profit to loss.

Changan said the decline in performance was mainly affected by a decline in sales. According to the sales report released by Changan Automobile, both independent brands and joint ventures are in dire straits.

In the first half of 2019, the overall sales of Changan Automobile fell 31.65% compared with the same period last year, reaching 825200 vehicles. Among them, Changan independent brand fell by 26%, Changan Ford's sales fell by 67%, and Changan Mazda's sales fell by 32.22% compared with the same period last year.

The half-year performance report also shows that only Changan Mazda is profitable and the rest are operating at a loss. Of these, Changan Mazda made a profit of 873 million yuan in the first half, Changan Ford lost 777 million yuan, and Jiangling Holdings lost 473 million yuan, while Changan Suzuki, currently controlled by Chongqing Changan, lost 246 million yuan.

Changan Automobile is also aware of the difficulties of the domestic auto market, saying in its semi-annual report that sales in China's auto market declined year-on-year for the first time in 28 years in 2018, indicating that China's auto market has gradually entered a period of deep adjustment after years of rapid growth. In the first half of 2019, the auto market continued to be under pressure, and the industry has entered an even more brutal knockout stage. From January to June 2019, China's automobile market production and sales continued to decline, with cumulative production and sales reaching 12.132 million and 12.323 million respectively, down 13.7% and 12.4% respectively from the same period last year.

Changan independent brands performed well in Changan brands, with cumulative sales of 392000 vehicles in the first half of the year, down 26% from the same period last year. Changan's independent decline narrowed, thanks to a pick-up in sales in June. Changan Independence used to be a million sales brand, independent car first, but so far the brand effect has declined sharply, sales continued to decline, ranking also fell to third independent, overtaken by Geely and Great Wall Motors.

The joint venture brand is the profit cow of the major car companies, but the continued sluggish market performance of the Changan joint venture brand has become a major pain point for the car company. After falling 50 per cent in 2019, Changan Ford's cumulative sales fell another 67 per cent in the first half of 2018 to just 75000 vehicles. Changan Ford said it continued to reduce dealer inventory in the first half of the year and launched new focus, Fox Active crossover version, new Ruijie family and new Taurus in the second half of the year, helping to 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".

Changan Independence is the brand that Changan Automobile has made great efforts to build in recent years, but after the peak of millions, sales have declined one after another. Joint venture brands in addition to Changan Ford, Changan Mazda downturn, Japan's Suzuki has long been withdrawn from Changan Suzuki, Changan Peugeot Citroen sales are even worse. The overall sales volume of Changan Automobile has dropped sharply and its performance has lost money, which has reached a very difficult stage.

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