The auto industry bid farewell to the "Golden Decade"

Since the first blowout in 2002, the Chinese auto market has just passed through a "golden decade" of perfection. However, whether it is a vehicle manufacturer or a dealer, it has to face the tragic consequences of falling profits. The end of the profiteering era 10 years ago, the first blowout period of the automotive industry is a full-fledged profiteering industry. According to data released by the State Planning Commission, the sales revenue of the automobile industry in 2002 was 151.5 billion yuan, and the profit was 43.1 billion yuan. The average profit rate of the whole industry was 28.45%, while the average profit rate of the international automobile industry was only 5%. This year, it became the watershed of the automobile market. The collapse of the luxury car price system became the first dominoes that fell, and it was also a turning point for the auto market to take off the “profiteering” coat. The middle and high-end car and mid-level car dealers were also unsustainable, and the market was weak. The price war has been on the rise, and the profit of bicycles has shrunk. At the same time, labor costs and land rent costs have continued to rise. Whether it is a vehicle manufacturer or a dealer, it is experiencing the toughest moment in 10 years. Since the second half of last year, most auto companies have begun to enter the downtrend channel of low profit growth. Two listed companies of FAW Group, FAW Car and FAW Xiali had a total net loss of about 900 million yuan at the end of 2011. As of August 17, a total of 21 listed companies in the automotive industry released semi-annual reports, and only 21 of the 21 companies achieved net profit growth in the first half of the year. According to statistics from JD Power Asia Pacific, the proportion of dealers in profitable status has dropped from 84% in 2009 to 81% in 2010, and then to 63% in 2011, up to the first half of this year. 26% of dealers can make money. A newly opened German luxury car brand 4S shop in a southern city now sells more than 100 vehicles per month, but has a net loss of more than 6 million yuan per month. More than the same brand 4S shop to get the year-end turnover target rebate, the highest monthly loss of more than 20 million yuan. “Before last year, dealers’ profit focus was on selling new cars, but since last year, after-sales service profits have surpassed new car sales for the first time, and the profit focus has shifted from new cars to after-sales.” Mei Songlin, vice president and managing director of JD Power Asia Pacific China Car dealers have been making money from the rapid profitability of the past to the current slow and stable making of money. "When we go to the next profit stage, when we do fine management, we rely on used cars and financial insurance, which may be very thin profits. We will enter the era of low profit. For example, dealers in Beijing have entered this stage." Multi-party restricted profitability terminal products The further exploration of the selling price is the objective reason for the decline in bicycle profit. According to data released by the National Development and Reform Commission's Price Monitoring Center, from 2001 to 2004, domestic automobile prices fell by nearly 8% per year. From 2004 to 2011, due to the continuous expansion of production and sales bases, car prices have been declining year after year, and bicycle profits have been reduced. The decline began to slow down, but except for a slight increase in car prices in 2010 (0.39%), there was a 1%-2% decline. Cheng Xiaodong, chief analyst of the automobile industry of the National Development and Reform Commission's price monitoring center, believes that the relationship between supply and demand is the most important factor in determining the price of automobiles. In recent years, nearly 100 new models have been put on the market every year, and the listing of a large number of new cars has further intensified competition in the new and old models. Inventory prices have fallen. The cost of car dealers is getting higher and higher. In terms of the cost of building a store, with the scarcity of land, land prices have soared. In the case of second-tier cities, the price of light land has a million yuan, not a good location. Among the domestic auto dealers, 4S stores of mainstream joint venture brands such as Guangfeng, Guangben, Shanghai Volkswagen and FAW-Volkswagen will have a construction fund of about 20 million yuan. Mercedes-Benz, BMW, Audi, Lexus and other luxury car brands demand higher, 30 million to 50 million yuan to reach the standard. Vehicle manufacturers also face increasing labor costs and various taxes and fees. Due to the tightening of the money, the current financing costs of the car companies, that is, the financial expenses have also increased significantly, which directly or indirectly reduce the profitability of the car manufacturers. “5% is the average profit rate of the foreign auto industry. Now the profit rate of China's auto industry is slowly connecting with the international market.” Mei Songlin believes that automakers should be mentally prepared, and the days of high profits in the past will be gone forever.

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