Since the beginning of the year, the first was the snowstorm, and the latter was the earthquake disaster. This once strained people's nerves. Coupled with the skyrocketing raw materials that dominate the economy, many companies are suffering from misfortune, which in turn exacerbates most people's doubts about whether the economy will decline in the future.
However, the data from the municipal team show that, except for the agricultural and animal husbandry industries that have lost production due to the snowstorm, they still need to recover several months. Industrial production has shown a month-by-month recovery, especially for leading economies such as automobiles and supporting industries. The momentum is gratifying. In the first half of the year, it was a foregone conclusion that the “producing profits†had been received. However, due to uncertainties in the second half of the year, the trend was unsatisfactory.
Disasters dominate economic growth
At the beginning of January, a heavy snowfall in southern China led to the suspension of the transportation of finished products and the supply of parts and components in Shiyan. The vehicle production in the month dropped by 9.8%. But fortunately, after February, with the monthly heating up of the auto market, the Shiyan automobile industry has been active: From February to April, vehicle output accelerated month by month, with an increase of 5.4%, 15.0% and 32.1% respectively.
Although in May, the Wenchuan Earthquake was the most destructive, the most extensive, and the most disaster-relief, since the founding of New China in May, there has been no “struck injury†to the real economy. The reduction fully illustrates this point. Shiyan is no exception. In the month, the total industrial output value reached 6.23 billion yuan, a year-on-year increase of 24%, and the total industrial output value was 30 billion yuan, a substantial increase of 28.7%. Among them, the output of automobiles reached 129,000 vehicles, a high increase of 27%. The leading enterprises in Dongfeng Limited (Shiyan Base), Dongfeng Industry, Huayang, etc. all increased by more than 20%, while the Third Ring reached 86% and Tongda had doubled. Therefore, in the first half of the year, the proportion of automobiles and auxiliary industries that accounted for 75% of the city’s industrial share is expected to increase by 20% without any suspense.
Of course, the significant increase in production in the first half of the year was mainly due to policy factors. Starting from July 1 this year, China will implement a nationwide III emission standard for motor vehicles and stop sales and registration of light vehicles that only meet the National II emission standards. For manufacturers, how the completion of the tasks in the first half of the year is directly related to the completion of the annual tasks. In accordance with the plans of Dongfeng Company at the beginning of the year, it will strive to complete 70% of the annual tasks in the first half of this year (new standards and high vehicle prices in the second half will force users to concentrate on purchasing cars in the first half of the year). Driven by this, the sales of commercial vehicles nationwide increased by more than 20%. Among them, trucks are the most obvious in terms of production and sales. Almost all truck companies have achieved significant growth.
The price of raw materials soared
Since the beginning of the year, the "double rise in production and sales" has not brought about a simultaneous profit. The reason is that the pressure of cost and energy has driven the manufacturers to the balance of profit and loss. Since last year, the rise in iron ore prices has caused steel prices to soar. 70% of the weight of a commercial vehicle is steel. The rise in steel prices directly raises the cost of the car. The international crude oil price once approached the US$140 per barrel mark, and the price of plastic and rubber on the same industrial chain also rose, making the price of tires also a matter of course. Data show that this year, pig iron rose from 3,800 yuan per ton to 4,500 yuan per ton, and steel prices have also risen sharply. Some types of automotive steel prices have soared by 70%, making almost all automobile manufacturers in China feel This brings cost pressures.
Fortunately, the fine-tuning of the car prices has ensured that the truck industry will not suffer losses. From the introduction of Dongfeng heavy truck dealers: Dongfeng Zhongka and heavy trucks have repeatedly adjusted their prices this year. Among them, the market's heavy-duty heavy trucks formally adjusted prices on April 1st, with an increase of around 3%. In the past, for the year-end rebates, when the market situation was not good, the merchants would sell them. Since March, this “upside down†has not reappeared. In this way, the previous Rangli plus factory price adjustment factors, the average price of a car rose by more than 10,000 yuan.
If we say that the impact on the country III, heavy truck can still hold on, then, light trucks and mini-cars and many ancillary companies appear to be overwhelmed.
Insiders pointed out that raw material prices, the real impact of bicycle profits is the biggest impact on mini-cars and economic vehicles, the profit rate of about 4%, while the main market share of self-owned brands are in this region, but for joint venture brands, its The bulk of market share is in the mid-level and mid- to high-class car markets. The bicycle profits in this region are obviously higher than those of the self-owned brands, which is about 7%. Therefore, the cost pressure of independent brands is even greater.
In fact, the days of supporting companies are even more sad. “The most direct impact of steel price increases is on suppliers. We cannot follow the price increase of raw materials to increase the price of the same rate to OEMs. In addition to negotiating a very limited price increase, we can only overcome it by ourselves. The cost of self-digestion is very limited. At present, some products have suffered losses. In the survey, there are still many companies complaining like this.
It is difficult to be optimistic about leading economic trends
In the second half of the year, vehicle manufacturers are most worried about driving up prices and raw materials. Who will sell the cars? According to supporting companies, there are two more to be added: “Difficulties in production and sales make financing more difficult.â€
State III was formally implemented in the second half of the year. From State II to State III, the upgrading of technology will increase truck costs by 2.8 to 35,000 yuan. Dongfeng Commercial Vehicle Company introduced a number of State III heavy trucks to the market at the beginning of the year, which has been increased by 80,000 yuan due to rising costs. However, this price has not been accepted by the market and its sales have been sluggish. This means that for most heavy truck companies, it is unrealistic to transfer the rising costs to consumers. How to internalize some of the costs will determine product competitiveness. Due to the large amount of steel for heavy trucks, the increase in raw material prices has brought about a 20% to 30% increase in the cost for heavy truck companies. Although domestic heavy trucks have also increased their selling prices, they have increased from 0.4 million to 10,000 yuan. However, the domestic average price of heavy trucks is about 300,000 yuan, an increase of only 2% to 3%, which is undoubtedly a drop in the bucket compared to the 20% increase in cost.
At present, in the face of the increasingly imminent country III, sales of Dongfeng light trucks have been in a difficult situation. "At present, a light truck only sells more than 60,000 yuan, and after July it will increase by 30,000 yuan. Who will buy it?" A general manager of a 4S store also stated that: “Now that the market is so fierce, if we rise a bit, customers may be snatched away by others. The prices are unstable and the profits are not transparent. We can't rise.â€
Dongfeng Limited's new president, Nakamura Honda, said in a recent public event that raw material prices are the biggest headache for him. Nakamura believes that “In order to maintain profit growth and improve product quality, previously relying solely on increasing sales volume and reducing costs in R&D and manufacturing have been unable to break down the losses caused by rising raw materials, and must rely on price increase and cost reduction to jointly resolveâ€.
Due to substantial price increases, the market is still difficult to accept in the short term. In addition, users of car purchases during the year have been honoured centrally in the first half of the year. If there is a blind production in the second half of the year, the probability of losses will be greater, and the possibility that a certain number of manufacturers may stop production and rest may not be excluded. This will have a detrimental effect on the ten-dominant economy in the second half of the year.
The bad news is far from over. On June 1, the newly released China Manufacturing Purchasing Managers Index showed that the national manufacturing production index and new orders index in May decreased by 10.8 and 9.6 percentage points respectively from the previous month. Experts pointed out that this data may indicate that it is difficult to be optimistic about the industrial production situation in the coming period of time, the growth of aggregate demand is slowing down, and the economic growth rate may be rising or falling. This demand for cars is obviously a restraint. On the other hand, the central bank raised the deposit reserve ratio for the fifth time during the year, and the deposit reserve ratio has reached a historical high of 17.5%, which will effectively shrink the monetary base and further exacerbate the difficulty of financing for SMEs. Combined with the continuous attack of high raw materials and high oil prices, it will undoubtedly greatly reduce the profitability of leading companies.
Of course, positive factors also exist. At present, the central government has allocated 25 billion yuan in disaster relief funds, while arranging 70 billion yuan for the establishment of disaster recovery and reconstruction funds. According to the “window-breaking effect†in economics, post-disaster reconstruction will stimulate investment growth, indirectly affect the increase in demand for medical aid products such as construction machinery, automobiles, and building materials, and may increase the national GDP growth rate. On the other hand, the construction of high-speed rails and rural highways to be built will also generate demand for trucks.
In general, the unfavorable factors in the second half of the year are greater than the favorable factors, and it is unlikely that the dominant economy will continue to maintain a strong upward trend. This requires the government and the functional departments to “focus on sinkingâ€, be close to the production and marketing line, and improve their ability to control the market and production, so that they can neither interfere in market prices nor ignore market prices. At the same time, services should be strengthened to reduce the production and business costs of enterprises. By actively promoting the construction of investment and financing markets, the financing difficulties for SMEs should be eased and the adverse effects that are not conducive to the development of enterprises should be offset as much as possible.
View related topics: Shiyan Auto Parts Market Analysis
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