The automobile manufacturers that have been accustomed to rapid growth have obviously "arrested offense" against the sudden brakes of the auto market this year. Faced with the rational return of the auto market, major manufacturers still adopt the “Great Leap Forward†approach to expand madly. Auto companies refused to "brake", and there have been inventory warnings for car companies, and some auto dealers are facing the risk of capital chain fracture.
In the first half of this year, the year-on-year growth rate of cumulative sales of domestic automobiles has rapidly dropped from nearly 40% in the same period last year to 3.35%. The total production and sales plans of the top 12 mainstream automobile manufacturers in China this year have reached nearly 19 million units. Together with other smaller manufacturers, the total production and sales target has exceeded 22 million. Industry experts predict that there will be single-digit growth or even negative growth in domestic car sales this year. According to the calculation of domestic auto sales of 18,609,900 last year, the production and sales targets and final sales will be reduced, and there will be a gap of more than 3 million vehicles.
Dong Yang, secretary-general of the China Automobile Association, had revealed during an interview with the media that the sales of domestic passenger cars in June were 1.122 million, and the inventory of the entire industry may have reached 1.683 million. Under normal circumstances, the dealers use the inventory cycle to measure the stock situation. In general, inventory from 1 month to 1.5 months is a reasonable range, and stocks that exceed 2 months reach the stock limit.
As the auto market continued to slump for several months, the inventory of end-dealers also continued to climb. The inventory cycle climbed from 40 days to 50 days to 60 days. This reporter learned that some Changan Ford, Dongfeng Honda, and Beijing Hyundai dealer inventory cycles range from 30 days to 60 days, and the cycle appears to be elongated. Chery, BYD and other independent brand dealers are even less optimistic about their inventory. Chi Yifeng, general manager of the Asian city, said that compared to joint venture brands, the inventory of self-owned brands is even higher. A few 4S shop inventory cycles exceed 60 days. It is understood that the inventory of some joint venture brands in Guangzhou is basically close to two months, while the self-owned brands are generally more than three months, a few even reached an astonishing four months.
Inventory pressure to dealers is obvious, that is, the capital chain is facing the risk of fracture. "According to a new car taking up 150,000 yuan of capital, 100 vehicles will occupy 15 million yuan for the 4S shop." Industry experts said that together with warehouse expenses, employee wages and other expenses, the general dealer needs Around 30 million in liquidity.
"About 70% of working capital is bank loans. Last year, the credit environment was relatively loose, and the operating costs of auto dealers were not very high. This year, bank credit has been tightened, interest rates on bank loans have been rising, and operating costs are increasing." Traders revealed.
In the first half of this year, the year-on-year growth rate of cumulative sales of domestic automobiles has rapidly dropped from nearly 40% in the same period last year to 3.35%. The total production and sales plans of the top 12 mainstream automobile manufacturers in China this year have reached nearly 19 million units. Together with other smaller manufacturers, the total production and sales target has exceeded 22 million. Industry experts predict that there will be single-digit growth or even negative growth in domestic car sales this year. According to the calculation of domestic auto sales of 18,609,900 last year, the production and sales targets and final sales will be reduced, and there will be a gap of more than 3 million vehicles.
Dong Yang, secretary-general of the China Automobile Association, had revealed during an interview with the media that the sales of domestic passenger cars in June were 1.122 million, and the inventory of the entire industry may have reached 1.683 million. Under normal circumstances, the dealers use the inventory cycle to measure the stock situation. In general, inventory from 1 month to 1.5 months is a reasonable range, and stocks that exceed 2 months reach the stock limit.
As the auto market continued to slump for several months, the inventory of end-dealers also continued to climb. The inventory cycle climbed from 40 days to 50 days to 60 days. This reporter learned that some Changan Ford, Dongfeng Honda, and Beijing Hyundai dealer inventory cycles range from 30 days to 60 days, and the cycle appears to be elongated. Chery, BYD and other independent brand dealers are even less optimistic about their inventory. Chi Yifeng, general manager of the Asian city, said that compared to joint venture brands, the inventory of self-owned brands is even higher. A few 4S shop inventory cycles exceed 60 days. It is understood that the inventory of some joint venture brands in Guangzhou is basically close to two months, while the self-owned brands are generally more than three months, a few even reached an astonishing four months.
Inventory pressure to dealers is obvious, that is, the capital chain is facing the risk of fracture. "According to a new car taking up 150,000 yuan of capital, 100 vehicles will occupy 15 million yuan for the 4S shop." Industry experts said that together with warehouse expenses, employee wages and other expenses, the general dealer needs Around 30 million in liquidity.
"About 70% of working capital is bank loans. Last year, the credit environment was relatively loose, and the operating costs of auto dealers were not very high. This year, bank credit has been tightened, interest rates on bank loans have been rising, and operating costs are increasing." Traders revealed.
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