The decline in net profit of listed car companies became the main tone of the autonomy sector

From the first three quarters of financial reports published by listed companies, most of them have unstoppable access to decline channels. Changan Automobile (13.410, -0.17, -1.25%), Great Wall Motors (11.490, 0.05, 0.44%), Jianghuai Automobile (9.760, -0.08, -0.81%), Jiangling Motors (18.250, -0.45, -2.41%), etc. The net profit of enterprises has declined. With the exception of a few loss-making enterprises that are affected by joint ventures and independent dual-sector businesses, the decline in the profits of most loss-making enterprises is caused by the loss of the business of the independent sector.

With the increasing market share of the Chinese branded passenger car market, the autonomous passenger car business segment of many auto manufacturers still suffers losses.

Recently, a number of self-owned brand automobile manufacturers announced their third-quarter financial reports. From the available data, the net profit after deducting non-recurring gains and losses fell (simple indicators that reflect the company’s operating performance, hereinafter referred to as “deductible net profits”). ) is still one of the problems facing many auto makers of their own brands. The decline in profits of most companies is caused by the loss of business in the autonomous sector.

In response, Cui Dongshu, Secretary-General of the National Passenger Vehicle Market Information Association, said in an interview with the “China Business” reporter: “The upgrade speed of independent brand products is not as fast as consumption upgrades. The operating status of self-owned brand car companies is due to the automotive industry. The market changes too quickly."

Profit decline

After reviewing the financial report of various auto makers in the third quarter, the reporter found that the net profits of several large and medium-sized auto companies such as Changan Automobile, Great Wall Motors, Jianghuai Automobile, and Jiangling Automobile all declined. Among them, Changan Automobile's operating income in the first three quarters of this year was 51.431 billion yuan, down 4.06% year-on-year, non-net profit was 4.638 billion yuan, down 36.25% year-on-year; Great Wall Motor's operating revenue in the first three quarters was 62.991 billion yuan. Declining 5.06% year-on-year, deducted non-net profit was 7.059 billion yuan, down 65.47% year-on-year; Jianghuai Automobile's operating income was 35.542 billion yuan in the first three quarters, down 6.79% year-on-year; deducted non-net profit was -0.48 billion yuan, down year-on-year 107.86%. Ling Ran, a well-known commentator in the automotive industry, believes that as competition in the market intensifies, major auto manufacturers are committed to improving their own product quality and service levels. In addition to the decline in the operating profit of auto manufacturers, it is related to changes in vehicle sales. They are related to various aspects such as R&D, promotion, and marketing.

In response to the current decline in performance, the above-mentioned auto makers also gave reasons in their respective financial announcements. Great Wall Motor pointed out: "The change in net profit attributable to owners of the parent company was mainly due to the Group's profit-making customers during the reporting period, which promoted existing products, increased brand and new product promotion, and increased R&D investment." Different from Great Wall Motors, the decline in Jianghuai Automobile's profits was due to “subsidy for new energy vehicles and decline in sales of passenger vehicles.” Compared with the previous two, Jiangling Motors achieved nearly 20% year-on-year sales despite the sales of new cars. Growth, but its total profit in the first three quarters of the year decreased by 544 million yuan, a decrease of 44.05%. In response, Jiangling Motors stated in its financial report that the main reason for the decrease in profits was "the increase in sales costs and the change in sales structure during the period."

Comprehensive performance of the major car companies in the first three quarters, the securities analysts also made predictions about their future performance. The related person of Ping An Securities thinks, Great Wall Motor's Haver's product sales base is relatively high, in order to guarantee the market share to need to sacrifice some profits, along with the industry declining and competition pattern further deteriorating next year, Haverne still needs the time cycle to carry on the brand, the product adjustment. Although the competition pattern of the WEY brand segment is relatively good, it is still in the period of brand building. Guangxuan and channel costs are relatively large. Great Wall Motors is in the “period of alternation between old and new products, and quantity and price need to be restored”. In addition, Essence Securities also said in the relevant research report of JAC: “The sluggish sales of SUV dragged down revenue and earnings. In September, S3 inventories returned to a reasonable level, and Q4 earnings are expected to turn positive.”

Caused by the situation

Cui Dongshu believes that the rapid changes in the auto market and auto consumption are the main reasons for accelerating the conversion of automakers and driving down the performance of auto makers.

Judging from the market performance of major auto manufacturers in the past two years, the changes in product structure and vehicle model appear to be a direct reflection of market transformation and promotion of corporate transformation. In order to further impact the mid- to high-end consumer market and enhance the brand image, Geely Automobile and Great Wall Motor have further improved their product layout and brand structure. They introduced the Leadk brand and the WEY brand, respectively, despite the aforementioned two major sub-brand markets. The performance has yet to be further tested, but its attitude toward high-end transition has been reflected. Unlike Geely and the Great Wall, Dongfeng, Jianghuai, and Changan, although their own brands did not launch sub-brands with higher product positioning, they also carried out high-end extensions on their respective product lines. They respectively launched Dongfeng A9, Jianghuai Refine A60, and Chang’an. CS95 and other products are positioned relatively high. In this regard, industry analysts believe that prior to the “road” of product upgrades and product upgrades, investment in product R&D costs will undoubtedly further increase operating costs and reduce operating profits.

At the same time, the increasingly fierce market competition environment has also forced auto companies to speed up product renewal, increase product marketing, and increase the cost of product promotion. Taking Jiangling Motors as an example, in response to severe market competition, the sales expenses of Jiangling Motors in the first three quarters of this year increased by 676 million yuan over the same period of last year, an increase of 55.92% year-on-year. According to the explanation given by Jiangling Motors in its announcement, the increase in fees was mainly used for marketing and product promotion. Due to changes in product sales structure and investment in R&D expenses for new products, Jiangling Motors' net profit in the third quarter was 298 million yuan less than the same period of last year, a year-on-year decrease of 76.70%.

In addition, the “price war” has become the favored competitive method for most independent auto manufacturers in the context of a gradual slowdown in market growth and limited product premiums. In the financial reports of many independent automobile manufacturers such as Great Wall Motor, Chang'an Automobile, and Jiangling Motors, the corresponding changes in promotional expenses and the corresponding impact of cost changes on the profitability of manufacturers are indicated. In an interview with reporters, senior automotive industry analyst Zhong Shi said that in the current market situation, the situation in which self-owned brand car companies exchange market share for profits will continue for a long time.

Of course, the relatively faster product iteration speed also gives auto makers more opportunities to adjust the inventory of older products, and the corresponding adjustment plan will also affect the sales of car models, which will affect the company’s operating income. In the first three quarters, Changan Automobile’s vehicle sales have been declining for several months. According to the relevant person in charge of Chang’an Automobile, the inventory adjustment of the previous generation product and the delay in the bonus release of new products will all be in the current period of the automobile manufacturers within the adjustment period. Performance impact.

“Compared with the past, self-owned brand cars have significantly improved brand recognition and quality reliability. The increase in market share and the decline in revenues may be the stage that major manufacturers must go through in their own development. Ling Ran said in an interview with reporters. Zhong Shi also believes that the rise of current independent brands is a more comprehensive rise. Under the background of “contending for a hundred schools of thought”, in addition to the effects of the declining sales of vehicle models, major auto companies have to sacrifice some of their benefits for the time being. In exchange for market share improvement. “Brand awareness is a prerequisite for the promotion of brand value. How to enhance the company’s visibility in the competition is the top issue for autonomous vehicle brands.”