The current situation of declining sales in the auto market has affected the profitability of parts and components companies. How to break the situation under the pressure?
According to data released by the China Association of Automobile Manufacturers on October 12, in September 2018, there were 2.394 million vehicles in the country, a year-on-year decrease of 11.6%, and vehicle sales fell for three consecutive months. At the same time, the production and sales data of many car companies show that the growth rate of sales in September showed a certain degree of decline.
Three consecutive months of decline
Different from the hot sales of "Golden Nine and Silver Ten" in previous years, the car market sales in September this year were slightly deserted. In September 2018, the national car sales were 2.394 million, a year-on-year decrease of 11.6%, and the year-on-year car sales declined for three consecutive months.
In terms of passenger cars, a total of 2,060,500 units were sold in September, down 12.04% year-on-year, and the sales of the four major types of passenger cars all showed a downward trend. In terms of commercial vehicles, sales of trucks and buses also showed a downward trend in September compared with the same period of the previous year. In September, 292,200 trucks were sold, a year-on-year decrease of 7.86%. The sales volume of passenger cars was 41,300 units, a year-on-year decrease of 11.97%. Among them, sales of sedans were 1.0059 million units, down 13.38% year-on-year; SUV sales were 872,800 units, down 10.10% year-on-year; mpv sales were 147,000 units, down 11.39% year-on-year; crossover passenger car sales were 34,900 units, down 21.93% year-on-year.
From January to September, the cumulative sales of automobiles was 20.4906 million, a year-on-year increase of 1.49%, and the growth rate was 2.04 percentage points lower than that from January to August. Among them, the sales volume of passenger vehicles was 17.2597 million units, a year-on-year increase of 0.64%; the sales of commercial vehicles was 3.2309 million units, a year-on-year increase of 6.31%. The sales growth rate dropped significantly compared with the same period of the previous year.
According to industry insiders, on the one hand, terminal sales continue to weaken, and on the other hand, inventory is showing a high phenomenon. According to data from the China Automobile Dealers Association, in September 2018, the dealer inventory warning index rose to 58.9%, which has been above the warning line for nine consecutive months.
In contrast, new car sales continued to grow rapidly. In September, 121,000 new energy vehicles were sold, an increase of 54.8% over the same period last year. Among them, the sales of pure electric vehicles were 94,000 units, an increase of 47% over the same period of the previous year; the sales of plug-in hybrid vehicles were 27,000 units, an increase of 90% over the same period of the previous year.
From January to September, the sales volume of new energy vehicles was 721,000, an increase of 81.1% over the same period of the previous year. Among them, the sales of pure electric vehicles were 541,000 units, an increase of 66.2% over the same period of the previous year; the sales of plug-in hybrid vehicles were 181,000 units, an increase of 146.9% over the same period of the previous year.
Sales of many car companies have fallen
It is worth noting that the market share of Chinese brand passenger vehicles is showing a downward trend. In September, the sales volume of Chinese brand passenger vehicles was 806,000 units, a year-on-year decrease of 16.5%, and the market share was 39.1%, a decrease of 2.1 percentage points.
Sales data released by a number of car companies also show that the growth rate of sales in September showed a certain degree of decline.
According to the production and sales report released by SAIC, in September, SAIC’s sales growth rate fell by 8.2% year-on-year. Among them, SAIC passenger vehicle sales increased by 4% year-on-year, and the growth rate further declined. SAIC-GM's sales fell 2% year-on-year, further narrowing the year-on-year decline. SAIC Volkswagen's sales fell 14% year-on-year.
Geely Automobile recently announced that in September, Geely Automobile's sales increased by 14% year-on-year, and the growth rate dropped significantly compared with August. Great Wall Motor announced that car sales in September fell by 15% year-on-year, and sales from January to September fell by 4.09% year-on-year.
It is expected that the sales volume in the third quarter will maintain the negative growth trend since June. Against the background of sluggish market demand, the performance growth rate of listed companies in OEMs may slow down. Dealers' current high inventory leads to a significant increase in discounts, which will further reduce profit margins. Due to the compression of terminal profitability, the profit of parts and components companies will be compressed. In addition, the cost of upstream raw materials will increase, and the profit of parts and components companies will face certain pressure.
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