As a result of the low-season sales of the Chinese traditional Spring Festival, especially the new crown pneumonia outbreak, automobile enterprise sales fell sharply in the first quarter. The data of the China Automobile Industry Association shows that the overall sales of the domestic automobile market fell by 42.4% to 3,672,000 units in the first quarter of 2020.
Recently, with the successive publication of financial reports for the first quarter of 2020 by many Chinese automakers, the impact of the decline in sales has also been visually reflected in the first-quarter financial statements. The income and net profit of the Chinese automakers declined in the first quarter, and the loss-making operation became a common phenomenon.
Mainly affected by the epidemic, the SAIC MOTOR, FAW MOTOR, BYD, Great Wall Automobile, BAIC Group faced “Waterloo” in the first quarter, The net profit fell by more than 80%. Dongfeng Automobile, whose factories are located in Hubei Province, where the outbreak is centered, the losses will be incurred. Although the net profit of Changan Motors and Jiangling Motors achieved a year-on-year increase of more than 100% in the first quarter, it remained in a deficit state after deducting non-recurring gains and losses.
| Brand | Revenue(Billion Yuan) | YoY% | Net Profit(Billion Yuan) | YoY% |
|---|---|---|---|---|
| SAIC MOTOR | 101.249 | -48.35 | 1.121 | -86.42 |
| FAW CAR | 28.635 | -3.98 | 0.182 | -80.06 |
| Great Wall Automobile | 12.381 | -43.94 | -0.65 | -184.08 |
| Chana Automobile | 11.564 | -27.76 | 0.631 | 130.10 |
| BYD Autos | 19.678 | -35.10 | 0.113 | -84.98 |
| GAC MOTOR | 10.765 | -24.48 | 0.118 | -95.73 |
| BAIC Group | 32.98 | -29.4 | 0.06 | -95.10 |
| JAC Motors | 9.12 | -37.68 | -0.356 | -650.70 |
| Dongfeng Motor | 2.07 | -33.70 | -0.028 | N/A |
| Jiangling Motors | 4.619 | -29.01 | 0.069 | 176.10 |
| Haima Motors | 0.442 | -37.85 | -0.099 | N/A |
| ZOTYE AUTO | 0.209 | -94.71 | -0.417 | -494.10 |
| LIFAN MOTOR | 0.56 | -74.88 | -0.197 | -103.06 |
1. SAIC MOTOR: Net profit declined by 86.42%
Total operating income: 101.249 billion yuan, down 48.35% year-on-year
Net profit attributable to shareholder companies: 1.121 billion yuan, down 86.42% year-on-year
Cumulative sales in the first quarter: 679,000 units, down 55.71% year-on-year
The sales of both SAIC Volkswagen and SAIC General, which are the leading sales force of SAIC Group, fell by nearly 60% in the first quarter. Among them, SAIC Volkswagen sold 183,000 units, down 60.9% year-on-year; SAIC General sold 179,000 units, down 58% year-on-year.
►Short review:
The sales of both SAIC Volkswagen and SAIC General, which are the leading sales force of SAIC Group, fell by nearly 60% in the first quarter. The impact of the epidemic will not end soon. Also, the SAIC should consider how to adjust the new economic situation.
2, FAW CAR: Net profit dropped by 80%
Total operating income: 28.635 billion yuan, down 3.98% year-on-year
Net profit attributable to shareholder companies: 0.182 billion yuan, down 80.06% year-on-year
In the first quarter, China FAW produced a total of 557,000 cars, down 27.6% year-on-year; sales of 688,000 complete vehicles, down 22.56% year-on-year. It is worth noting that the two independent brands: FAW BESTURN and Zastava, have achieved double-digit growth against the trend, while the performance of the joint venture brand is not ideal.
►Short review:
The primary problem FAW CAR is facing is that the joint venture brands are weakening. Its independent brand is growing. Also, it still faces many challenges from other independent brands. It is worth noting that FAW Cars plans to be renamed as FAW Jiefang and will be changed to the development, production, and sales of commercial vehicles. And this is the first time after that to release the achievement forecast. Allowing the commercial vehicle boards with relatively good performance to be put on the market will help to put an end to the loss of the car and raise the market value of the vehicle.
3. Great Wall Automobile: Loss of RMB 650 million
Total operating income: 12.381 billion yuan, down 43.94% year-on-year
Net profit attributable to shareholder companies: -0.65 billion yuan, down 184.08% year-on-year
Cumulative sales in the first quarter: 150300 units, down 47.04% year-on-year
►Short review:
The Great Wall Motor said that the decline in sales performance was mainly affected by the pneumonia outbreak. The decrease in sales of the Group’s output year-on-year, and rouble exchange rate decreases, resulting in foreign exchange losses With the epidemic easing, the sales elasticity of the Great Wall car plus inventory may gradually be reflected in the second quarter. With the release of the new car models in the second half of the year, the company’s profitability and product competitiveness are expected to improve.
4、Changan Automobile: Achieving profit but business condition still not improving
Total operating income: 11.564 billion yuan, down 27.76% year-on-year
Net profit attributable to shareholder companies: 0.631 billion yuan, down 130.10% year-on-year
►Short review:
Please note that the first-quarter net profit of Changan Motor included the non-recurring gain of RMB2,084 million. After deduction, its net profit was -1,793 million yuan. The joint venture is not as good as expected, which is the main reason for the decline in the net profit of Changan. In the first quarter, Changan Ford sold 350,000 units, down 17.24% year-on-year; Changan Mazda sold 173,000 units, down 48.08% year-on-year.
5、BYD autos: Net profit drop 85%
Total operating income: 19.678 billion yuan, down 35.1% year-on-year
Net profit attributable to shareholder companies: 0.113 billion yuan, down 84.98% year-on-year
Cumulative sales in the first quarter: 61300 units, down 47.89% year-on-year
New energy vehicle sales: 22,200 units, a year-on-year decrease of 69.67%
►Short review:
In the first quarter, BYD received government subsidies of 533 million, and After removing subsidies, its net profit for the first quarter was a loss of 420 million yuan. BYD said that the company’s car business was affected in the first quarter due to the impact of the new coronary pneumonia outbreak and the sharp decline in sales of new-energy vehicles. With the release of new car models, we are waiting to see if BYD will rebound in the second quarter.
6. GAC MOTOR: Net profit declined by 96%
Total operating income: 10.765 billion yuan, down 24.48% year-on-year
Net profit: 118million yuan, down 95.73% year-on-year
The sales of Toyota and Honda fell by 24.24% and 46.18% respectively in the first quarter of the year 2020. The accumulated sales of Fick and Mitsubishi in the previous quarter fell by more than 65%.
►Short review:
Toyota and Honda remain the primary support for the performance of GAC Group. GAC-auto has lowered its annual sales growth target from 8% to 3%. Whether it can be achieved will depend on the performance of Toyota and Honda.
7、BAIC Group: Net profit drop 95%
Total operating income: 32.98 billion yuan, down 29.4% year-on-year
Net profit: 60.85 million yuan, down 95.1% year-on-year
►Short review:
Beijing Mercedes Benz has contributed the most to its profit among passenger cars. The data showed that Beijing Mercedes Benz’s accumulated sales in the first quarter were 110,000 units, down 24.2% year-on-year; Beijing Hyundai sold 108.2 thousand units, down 43.3% year-on-year. Regarding the decline in its performance, BAIC said that the overall impact of the epidemic on the automobile industry and the sales of the whole vehicle decreased considerably compared with the same period last year.
8. JAC Motors: Loss of RMB 356 million
Total operating income: 9.12 billion yuan, down 37.68% year-on-year
Net profit attributable to shareholder companies:356 million yuan
Cumulative sales in the first quarter: 83400 units, down 35.53% year-on-year
►Short review:
Although in 2019, JAC Motors received government subsidies amounting to 1.117 billion yuan to help it turn its losses into profits in the current period. But for long-term development, it is still an urgent problem to be solved that how to improve its main business profitability
9. Dongfeng Motor: The outbreak center does not affect the year-round goal
Total operating income: 2.07 billion yuan, down 33.7% year-on-year
Net profit attributable to mother company: Loss of 27.647 million yuan, compared to 120 million yuan in the same period last year.
►Short review:
Dongfeng Motors, which locates in the center of the epidemic, did not achieve the expected results and sales in the first quarter. Dongfeng Motors said the company strives to recover the losses after the end of the epidemic and strives to catch up with the year-round operating targets set at the beginning of the year.
10、Jiangling Motors: Subsidies help growth
Total operating income: 4.619 billion yuan, down 29.01% year-on-year
Net profit attributable to shareholder companies: 69 million yuan, down 176.10% year-on-year
Cumulative sales in the first quarter: 44965units, down 30.93% year-on-year
►Short review:
The government subsidy of 160 million yuan was the reason for the year-on-year increase in the net profit of Jiangling Motor during the reporting period. However, it is not a long-term measure to achieve a return on the net profit from subsidies. After adopting the strategy of “taking business together,” instead of bringing the expected “double-wing” flight to Jiangling, we have lost the opportunity to become a strong commercial vehicle. So far, we have not been able to find a competitive product in the passenger car market.
11, haima motors: Loss of nearly 100 million yuan
Total operating income: 442 million yuan, down 37.85% year-on-year
Net profit attributable to shareholder companies: -99 million yuan
Cumulative sales in the first quarter: 2591units, down 49.12% year-on-year
►Short review:
Since 2017, Haima Motor’s sales performance in the market has been declining all the time, and the company has lost losses for years. Last year, Haima Motors made a profit by selling its real estate. However, without the ability to research and develop competitive models, its future market performance is still not encouraging.
12、ZOTYE AUTO: Net profit dropped by 494%
Total operating income: 207 million yuan, down 94.71% year-on-year
Net profit attributable to shareholder companies: -417 million yuan, down 494.10% year-on-year
►Short review:
For a car enterprise that once sold more than 300,000 cars a year and had a revenue of more than 20 billion yuan a year, it was only three months to realize the revenue of $210 million. The results were too bad. Due to inadequate research and development response, ZOTYE Motors began to be in a “no car for sale” situation in some provinces and cities in the second half of last year, and sales dropped sharply. Judging from the first-quarter financial report, the year 2020 will still be a challenging year for ZOTYE Motors.
13. LIFAN MOTOR: Loss of RMB197 million
Total operating income: 560 million yuan, down 74.88% year-on-year
Net profit attributable to shareholder companies: -197 million yuan, down 103.06% year-on-year
Cumulative sales in the first quarter: 326 units, down 97.85% year-on-year
Cumulative sales of new energy vehicles in the first quarter: 37, down 94.6% year-on-year
►Short review:
Lifan is faced with disputes with Panda Motors regarded as “brothers fighting,” huge debts, increased losses, as well as product quality and corporate strategy. For the Liufan, who has been dragged into the life and death of debt, building a car is no longer the priority, and it is the “repayment of debt.”
An industry analyst said, The first-quarter financial report is unique in a unique market environment and cannot be seen as a reflection of the true profitability of a company. With the gradual containment of the epidemic and the recent introduction of a series of consumer stimulus policies, demand in the consumer market is expected to be released. At the same time, some demand will be tapped as a result of the recent marketing activities of the car companies. The industry expects that the car market will rebound in the second quarter, but the negative impact of the decline in purchasing power will not be eliminated. For the automobile enterprise, “the iron-making needs to be hard on its own” is still applicable.
