How to break the game? Global car companies encounter "dark times" in China

In September, Volkswagen's sales in China dragged down global sales by about 20%, while Jaguar Land Rover directly caused its UK factory to stop production for two weeks due to a sharp drop in Chinese demand. Not only that, but recently, the listed companies in the forefront of China's auto sales have released production and sales data, showing their current operating performance in the most intuitive way. For Chinese and foreign car companies, the past month may be the "dark period" that they have encountered in the past 30 years. How will they break?

Mid-Autumn Festival "small holiday", in the northern Chinese city of Datong, Shanxi, a large automobile industrial park in the southwestern suburb of the city with Datong noodles and coal-civilized China, the roads on both sides and every 4S shop door is filled with dusty new cars.

"Now the market is not good, our main business is quickly becoming a car repair." In a Japanese brand 4S shop, the salesperson said to the car K line. This situation may reflect the widespread experience of dozens of dealers in this industrial park - empty hundreds of square meters of exhibition halls, two or three salespeople or gossip, or bow down to brush mobile phones. And car dealers in other parts of China may have the same experience.

Some people even exaggeratedly said, "In September, the Chinese auto market collapsed." According to data released by the China Association of Automobile Manufacturers, in September, China’s passenger car sales were 2.06 million, down 12% year-on-year; Year-on-year decline. In September, production was 35,000 fewer than sales. This clearly shows that China's local automakers are deliberately controlling production capacity.

Indeed, this is the first time that Chinese car sales have experienced such a large decline in the past 20 years since the car entered the Chinese family in the 1990s. Global automakers are also experiencing a “dark period” in the Chinese market.

Automobile listed companies "collectively fell"?

Around October 10, Chinese auto listed companies successively released production and sales reports. Automobile K-line found that except for Geely Automobile, Guangzhou Automobile Group and BYD, the three listed automakers maintained year-on-year growth. Other listed automakers, including SAIC Group and Dongfeng Group, had strong joint ventures, and their sales in September both decreased year-on-year.

SAIC Motor Group released data showing that in September this year, SAIC Group's total sales volume was about 610,000 units, down 8% year-on-year. This directly dragged the Group's overall sales growth rate in the first three quarters to 6.74%, and the total sales volume from January to September was 6,146,500. In the first half of the financial report, SAIC's sales growth rate from January to June also reached 10.88%.

Among the main sectors, except for SAIC passenger cars, which maintained a 4% year-on-year growth in September, SAIC Volkswagen, SAIC-GM, SAIC-GM-Wuling and SAIC Datong all fell year-on-year, with the largest drop of 17%.

According to the production and sales data, it is not difficult to find that the output of SAIC passenger cars in the first three quarters is about 33,000 more than the sales volume.

The production and sales data of Dongfeng Group, which has a number of joint ventures, showed that the company sold 271,000 units in September, down 14.6% year-on-year. This caused the group's total sales in the first three quarters to be only 2.194 million units, down 3.47% year-on-year. .

Among the many sectors, Dongfeng Nissan's sales in September were the same as last year, but its output in September was more than 30,000. In the past, Dongfeng Honda reversed the sales decline in the previous months, but it is more exaggerated than Dongfeng Nissan. The company's output in the first three quarters was 49,200 more than sales. Shenlong Automobile and Dongfeng Infiniti also have such a situation of extremely uneven production and sales.

In September, sales of Dongfeng Qichen, Dongfeng Renault, Dongfeng Liuqi and Dongfeng passenger vehicles all fell by more than 30% year-on-year, of which Dongfeng Liuqi decreased by 49.1% year-on-year, while Dongfeng Renault decreased by 61.4%.

Among the major automobile groups, the worst day may be Changan Automobile. Due to the overall decline of its joint venture company, Changan Automobile sold 177,000 units in September, down 32.3% year-on-year. From January to September, the company's total sales volume was 1,647,600 vehicles, a year-on-year decrease of 21.67%. The company's only remaining sales of Changan Mazda in September were also down 19.3% year-on-year, resulting in an overall decline in the first nine months.

In addition, Haima Automobile, Great Wall Motor, Jianghuai Automobile and Foton Motor also experienced different declines in sales in September.

Not only domestic companies, but also multinational auto giants have suffered from “an anchor”.

On October 9, Volkswagen Group, the world's largest automaker, released sales data. Due to the 11% decline in sales in China, it failed to save sales in Europe due to new emissions regulations. Its global sales in September fell nearly 20%. GM's sales in the third quarter fell more than double digits.

Even luxury brands are hard to escape. The British "Financial Times" reported that the British-based Jaguar Land Rover said that its Solihull factory in Midlands, England, employing 9,000 employees will be shut down this month for two weeks, mainly in September in China. Sales fell 46%. Sales of BMW, Mercedes-Benz and Audi from Germany are also slowing down. In particular, Mercedes-Benz has previously achieved a growth rate of more than 30% in the Chinese market.

But now, everything can become a "past style."

collapse? Low growth?

According to statistics, among the several car companies that have announced the third-quarter performance forecast recently, the net profit of five car companies has fallen by more than 50%. Among them, Changan Automobile's performance forecast shows that the company's profit in the first three quarters was only 800 million to 1.3 billion yuan, compared with 5.81 billion yuan in the same period last year; Haima Automobile's performance forecast shows that from January to September, the company's loss was about 420 million. ~ 520 million yuan, a loss of 62.78 million yuan in the same period last year.

This further indicates that auto listed companies are facing tremendous pressure. Of course, as a “lista behind the scenes”, auto listed companies still have a firewall, that is, more than 20,000 auto dealers in China, and the survival of the latter may not be so good.

China Automobile Circulation Association released data showing that in September this year, the inventory coefficient of Chinese auto dealers reached 1.82 (inventory coefficient 0.8~1.2 is a reasonable range of inventory, inventory coefficient greater than 1.5 is to reach the alert level, when the coefficient is greater than 2.5, the inventory is too high The operating pressure and risk are very large. It is 50% higher than the 1.21 in September 2017. It is much higher than the average safety factor range of 0.8~1.2, which is the second highest inventory coefficient since June this year. In the first three quarters of this year, its published inventory warning index has consistently exceeded the warning line.

It is worth noting that in September, Chery Automobile, Changan Ford, Baojun Automobile, Jaguar Land Rover, Beijing Hyundai and SAIC Roewe have a total of 6 car companies. The inventory depth is more than 2 months. There are large operating pressures and risks, which need to cause high-level enterprises. Be careful to make adjustments in a timely manner.

Due to the tight capital, this year, the huge group has faced tremendous operational pressure and has attracted widespread attention. Not long ago, Guanghui Group introduced the strategic investor Evergrande Group, and it also showed that financial pressure has become the dilemma of this “the largest auto dealer in the universe”. The huge and wide-ranging exchanges are all the same, and the days of those small and medium-sized dealers can be imagined.

Recently, even among the better-performing auto companies, An Zhihui, president of Zhejiang Geely Holding Group and president and CEO of Geely Automobile Group, admitted in an interview with the media, “Jili has to think about how to live every day.”

In response to the current market situation, on October 23, Vice Minister of the Ministry of Industry and Information Technology Xin Guobin said at the press conference of the State Council Information Office that the period of rapid growth of China's production and sales has passed, and low growth is probably the normal state of future development.

However, he believes that the replacement of China's old cars is still very large, and the demand for the third and fourth lines and small towns is still large, so the automotive industry has a relatively large growth space, but certainly not as fast as in the past.

The K-line believes that under the current environment, there will be some unsustainable enterprises that are losing money, and they will gradually be eliminated from the market. The so-called new power of the car may be in the midst of a long time. Severe cold. Those who can survive this cold, whether it is a traditional automobile company or a newly-entered enterprise, will be a company with continuous investment, scale and strong system capability in the field of technology research and development.

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