The automotive industry has begun to turn down

According to the data released by the China Association of Automobile Manufacturers, vehicle production and sales in May continued to decline month-on-month, and year-on-year growth, with a total of 835,500 units sold, a decrease of 9.44% month-on-month; passenger car production and sales decreased by 10.2% and 6.66% month-on-month. The decrease was 18.61% and 14.74%.

At the same time, the research reports issued by a number of brokerage firms have generally underestimated the outlook of the industry and have given them a "neutral" rating. Guosen Securities lowered the rating of the industry in an all-round manner and stated that “there are no 'recommended' ratings among key automobile companies. The chief researcher of the auto industry, Zhao Xuegui, said that there has been no change in the company’s recommendation direction, and the downward adjustment reflects more negative views on the industry.

Sales will further decline

June and July are the off-season sales of automobiles, coupled with many unfavorable factors on the periphery. Under the background of declining sales in May, it is difficult to avoid the fate of a sharp decline in sales of cars, commercial products or heavy trucks.

Zhao Xuegui believes that the main reasons for the slowdown in the growth of car sales are: As a result of inflation, real income levels of residents have fallen rapidly; affected by the fall in the stock market, the level of property income of residents has fallen rapidly. The reason for the further rapid decline in sales in the future is that the domestic price control of refined oil means that the current domestic car consumption is “overdraft”, and the growth in demand for cars under the oil price subsidy is difficult to sustain. The reform of the refined oil system in China is in full swing once implemented. Will curb current consumption.

For commercial vehicles and large and medium-sized passenger vehicles, domestic and international demand in the second half of the year will be suppressed because Dazhong passengers will implement environmental standards for heavy-duty vehicles on July 1. In the first half of the year, sales generally accounted for 35 to 40% of annual sales. Guosen Securities anticipates that the implementation of the Euro III standard in 2008 will distort this seasonal characteristic. Sales in the first half of the year are expected to account for 45% to 50 percent of annual sales. %.

As for the heavy trucks, their periodical deceleration is obviously higher than that of cars. Due to the weight-based charging system, heavy-duty trucks will be converted in 2007. Under such a high base, the "overdraft" consumption of national II heavy trucks, the near-end of weight-based charges, and the "burst demand support" of natural disasters are unsustainable, and the multiple roles of macroeconomic regulation and control will make it very difficult for heavy trucks to achieve high growth. . From January to May 2008, the growth rate of heavy truck sales was above 50%. Guosen Securities expects that sales in June will decline rapidly (perhaps 1/3 to 1/2 of sales in May). Sales growth in 2008 fell back to 10%, and sales growth in 2009 was around -20%. This round of adjustment is expected to last one year, and the heavy truck industry may gradually recover in the second half of 2009.

Corporate profits are not optimistic

For auto companies, under the dual test of rising raw material prices, rising labor costs, and increased market competition, there is tremendous pressure.

Since the beginning of this year, steel prices have risen sharply, and labor prices have also risen correspondingly. At the same time, since the income tax of foreign-funded enterprises has been consolidated during the year, the tax rate has also risen, but it is difficult for the sales terminal to increase prices. Even in the context of the sharp increase in CPI in the first quarter of this year, the domestic transport price index still dropped by 2.4% year-on-year.

Although the cost of the entire automotive industry has increased significantly, compared with the joint venture, the ability to absorb costs is higher than that of the self-owned brand. The joint venture can continue to cut prices in the low-end models and become the backbone of the auto industry's profitability. In the period of strategic adjustment, the pressure of independent brand manufacturers is relatively large, and they are faced with severe challenges such as the tightening of the macro environment, rising prices, changes in the exchange rate of the RMB, market access and monopolization, and energy conservation and emission reduction.