How far can the automotive industry continue to blow up?

Dongfeng Honda sells an average of 25,000 yuan for a car, while another car manufacturer has a bicycle profit of only about 3,600 yuan. Yesterday, the reporter learned from the Provincial Machinery and Automobile Industry Investment Promotion Center that despite the fact that Hubei Automobile achieved overall industry profitability in the first eight months of this year, most of the auto companies' days will be harder to sustain.

The first industry-wide profit in three years

Provincial Bureau of Statistics data show that in the first eight months of this year, the province's Dongfeng Motor Co. (Headquarters), Dongfeng Honda, Shenlong, Fengshen Xiangfan Automobile, Dongfeng Motor Co., Ltd. (Shiyan District) and other major car companies to achieve full profitability.

Experts from the Provincial Machinery and Automobile Industry Investment Promotion Center pointed out that this is the first time that the domestic auto companies have experienced full-scale profitability since the Chinese automobile market hit a cold spell in 2005. From the sedan to the truck and what they can sell, they can make money.

The fastest-growing of these was Dongfeng Honda, which had a profit of nearly 2.8 billion yuan in the first eight months of the year, an increase of 180% compared with the same period last year. Dongfeng Motors Limited (Shiyan District) also stepped out from a loss of 240 million yuan in August last year. In the same period of this year, it achieved a loss of profit of more than 300 million yuan.

Although the prices of upstream raw materials such as steel and petrochemicals soared this year, they failed to stop the pace at which car companies made money. The province's car companies responded with different moves, Dongfeng light trucks and other commercial vehicle companies, in the rapid growth of the domestic freight logistics market, chose to increase prices. Companies such as Shenlong and Dongfeng Honda have adopted cost reductions to maintain their profit margins.

"Winter Swimming" competition starts

In spite of this, since the beginning of May this year, the growth rate of many auto companies has slowed down significantly. A local mainstream car company made a profit of 370 million yuan in the first five months of this year, compared with only 98 million yuan in June-August.

Yesterday, the reporter telephoned Jia Xinguang, a domestic car commentator. He said that domestic auto companies have entered the "winter swimming" and the auto industry will turn from comprehensive growth to structural growth. Some auto makers sold less than the average growth this year, and some even show negative growth.

The two-level division of automobile enterprises in our province has become increasingly obvious. One car company sold a total of 130,000 cars in the first eight months of this year, and the bicycle profit was about 3,600 yuan. In the same period, Dongfeng Honda sold 112,000 cars and sold one car to earn 25,000 yuan.

Jia Xinguang said that consumers' understanding of automotive products has made significant progress compared with ten years ago. The consumer market share will be concentrated in companies with competitive products.