Interface News Reporter | Yang Shihan Interface News Editor | Chen Xiaotong On May 28, Cui Dongshu, Secretary General of the China Association of Automobile Manufacturers, stated that the per-vehicle profit of the automotive industry chain in the first four months of this year was 16,000 yuan (2210$), hitting a new low in nearly seven years. At the same time, the per-vehicle cost has been steadily rising in recent years, with the latest data reaching 299,000 yuan (41330$), at a high level in the past seven years.
In the first four months of this year, the automotive industry’s revenue increased by 8% to 3.0742 trillion yuan, and profits surged by 29% to 142.8 billion yuan, despite a simultaneous 8% rise in costs. However, the industry’s profit margin continued to decline. Currently, the profit margin of the automotive industry has dropped to 4.6%, the lowest level in nearly seven years. This figure remains below the average profit margin of 5% for the entire industrial sector. Cui Dongshu pointed out that while traditional fuel vehicles are profitable but shrinking rapidly, new energy vehicles are experiencing high growth but also significant losses. The development of the automotive market still faces conflicting pressures. In the first four months of this year, the industry’s production and sales performed well, but profits mainly relied on exports and high-end luxury products. Most car companies saw a drastic decline in profits, with some manufacturers facing worsening survival challenges.
The price war that started last year has expanded to all time periods and categories. To maintain market competitiveness, automakers are lowering new car prices. Some customers are demanding price cuts of 15% to 20%, far exceeding the industry norm of around 3%. In the face of aggressive pricing pressure from automakers, some parts suppliers are expressing dissatisfaction with the financial strain. Bosch China’s president Xu Daquan stated that some customers are making significant price reductions a precondition for payment. The impact of the price war on the car market remains unknown.