Auto companies cut first-half profit decline in July intensified tide

Posted on 8/20/2015 5:17:54 PM

Auto market downturn has been clearly reflected in the performance vehicle business.
Recently, statistics from China Association of Automobile Manufacturers (hereinafter referred to as the Automobile Association) released the first half of this year, the automotive industry scale enterprises realized a total main business income of 3.476227 trillion yuan, up 3.84 percent still positive growth, but this year on year decrease of 10.76 percent; to achieve a total profit of 300.971 billion yuan, down 1.58 percent.
Sales and operating income in the first half is still up, the overall profit decline car prices but there is undoubtedly an unusual signal.
Expert opinion in the market, although car sales head rotor overall are still rising, but the auto market this year extraordinary competitive pressures, has made the majority of car companies have to make cuts, lower prices, increase inventory and other options, which have greatly affected the car prices profits. Therefore, the pressure continues to increase in the second half of the automobile market, the decline in corporate profitability will likely become the norm.
Production down 13 percent since July
"Daily Economic News" reporter learned that, from the beginning of July, the domestic auto companies have moved into the traditional heat off time, however, including many car companies employees DPCA, Dongfeng Honda, generally in the year to enjoy a vacation longer than in previous years.
Vacation prolonged car prices to reduce production of a microcosm. "Since July factory output down 13 percent year on year." By the Federation Secretary-General Choi Dong-tree to the "Daily Economic News" reporter, said, "This is the case in previous years, there have been no."
In fact, the car companies cut production practices from a few months ago, it has become a consensus. According to the Automobile Association statistics, since the beginning of May of this year, car prices up monthly production has declined for three consecutive months.
In the Automobile Association opinion, a reduction in car prices in production is "super-expected". In fact, even if the auto market growth rate declined, but before July car sales maintained a positive growth of 0.4%, compared with 3.4 percent growth in the passenger car market. In such a case, the car prices slashed production is rare. "Car prices reduce production to improve factory and dealer inventory pressure." Choi Dong-tree told reporters, in fact, sales of automobile terminal downward pressure on already apparent, however, automobile manufacturers did not timely adjustment of production, still Yaku to downstream distributors, resulting in dealer inventory pressure increased sharply since last year.
According to statistics from the China Automobile Dealers Association recently released, as of July this year, dealer inventories have been 10 consecutive months than the warning line.
Under such circumstances, many car manufacturers by lowering production and wholesale dealers to adjust the amount of pressure on the stock. According to Nissan's statistics, in the first seven months of this year sales of 670,000 terminal, however, by the Federation of the statistics, the amount before July factory wholesale only 490,000, that is to say, about 180,000 of sales from the terminal in stock cars.
Not just Nissan, Honda front end sales of 530,000 in July, while wholesale volume of 480,000 over the same period. In the case of inventory increased, the situation is terminal sales higher than wholesale volume has become a common phenomenon. Choi Dong-tree introduced in July the amount of 1.17 million wholesale car manufacturers, with sales of 1.24 million compared to a terminal appear 70,000 gap.
First-half profit fell 1.58%
Although cuts car prices bring reduced dealer inventory pressures, but has let their operational efficiency adversely affected.
In addition to the profit decline 1.58 percent year on year, but according to the National Bureau of Statistics data released in July this year, the industrial added value of automotive industry also appeared to decline 0.5%, the first automobile manufacturing industrial added value in July rose only 5.8% overall economic benefits the automotive industry in the manufacturing sector was not good.
According to the Automobile Association statistics, in the first seven months of this year, sales of the top five automotive group followed by SAIC, Dongfeng, Chang'an, FAW, BAIC, however, compared with the same period last year, the top five in four - SAIC, Dongfeng, FAW and BAIC are sales decline, another security group parents also appeared in a single month more than 20% decline in July.
To boost sales, some companies to drop or concessions in the form of official distributors together with the promotion, which is also considered important factors affecting the profitability of car prices.
This year, Shanghai Volkswagen, Shanghai GM, Beijing Hyundai, Nissan, DPCA and other car firms, have a more substantial promotions, including Shanghai Volkswagen's product official guide down 8000-10000 yuan.
And such a promotion in July unabated. According to statistics by the Federation, Dongfeng Nissan Sunny terminal last month prices up by 16% year on year Polaris price 11%, Dongfeng Peugeot 301 prices by 11% year on year.
Production, marketing, sales decline in automobile production enterprises become pressure head three big mountains. In the industry view, because it is difficult to change in the short term automobile market environment, operating conditions, or car prices will continue to deteriorate.

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