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          1. Welcome to the official website of Jincheng Road-Brother Co., Ltd. Chiness English
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            Jincheng Road-Brother Co., Ltd.

            Tel:+86-356-2212221

            Email:showyoump@126.com

            WebSite:http://jnlbwheel.cn/

            Contacts:Mindy Ma

            Address:Dongshu Village Jincun Town Zezhou County Jincheng City Shanxi Province China



            Common ProblemsHome>>Company News>>Common Problems

            Will Aluminum Alloy Wheel Hub Market be Affected by Continuous Low Automobile Sales?

            Recently, the Joint National Passenger Car Market Information Conference (hereinafter referred to as the Joint National Passenger Car Association) also released information that domestic passenger car sales fell 23% in the first three weeks of October this year compared with the same period last year, and it is expected that the overall domestic passenger car sales will fall by about 20% in October. It also released specific sales data for the first three weeks of October: in the first week, the average daily retail sales of 15.5 million vehicles nationwide fell 49% compared with the same period last year; in the second day, the average retail sales of 63.4 million vehicles fell 12% compared with the same period last year; and in the third day, the average retail sales of 53,000 vehicles fell 23% compared with the same period last year. Unexpectedly, October will be the fifth consecutive month of negative sales growth, and the decline has an expanding trend.

            What's worse is that while sales are down, the inventory level of distributors has reached a historical high. According to the data released by China Automobile Circulation Association (hereinafter referred to as the "Circulation Association"), the inventory early warning index of automobile dealers in October was 66.9%, up 17 percentage points from the same period last year, the highest in three years, which is the tenth month of this year when the inventory early warning index exceeded the warning line. Facing the continuous inventory pressure, the price war has quietly unfolded. Many dealers'new car business has appeared price inversion phenomenon, that is, the price of new car is lower than that of used car, even some luxury brands are no exception. Faced with the continuous excess of automobile inventory and the hopelessness of profit, many dealers in the industry feel pressure, and the situation of voluntary application for withdrawal is constantly emerging.

            At the beginning of the price war, the profitability of the automotive industry has generally declined. According to the daily economic news report, according to the third quarter earnings of several listed automobile companies, the net profit of shareholders of listed companies, including FAW cars and Jianghuai cars, has declined in varying degrees. The data show that the net profit of the shareholders of FAW car in the first three quarters of January to September belongs to listed companies is 135 million yuan (RMB, the same below), which decreases by 53.6% annually; the net profit of Jianghuai car in the first nine months is 448 million yuan, which decreases by 78.13% annually; the net profit of the shareholders of Hippocampus car in the first three quarters belongs to listed companies is - 477 million yuan; and Jiangling car is 219 million yuan, which decreases

            In addition, according to the National Passenger Car Market Survey and Analysis Report from January to September 2018, only 32.8% of car dealers in China are profitable, 26.7% of dealers are equal, and 40.5% of dealers clearly indicate that they are in a loss state.

            Wu Zhoutao, vice president of Beiqi Co., Ltd. and general manager of Beijing Automobile Sales Company, told the Securities Daily that, according to the current situation, the elimination competition of automobile brands has begun. The leader will gain the current market share, and the laggards are afraid of being eliminated by the market.

            All these indicate that the mainland automotive industry may be "cold winter", and Xin Guobin, Vice Minister of Industry and Information Technology, affirms this trend. At the previous conference on the development of industrial communications industry held in the first three quarters of 2018, Minister Xin said: From the current situation, the period of high-speed growth in China's automotive production and sales may have passed, and low-growth may be the future development. A normal situation.

            So what is the cause of this situation? At present, people have different opinions on this issue. People from different angles and heights come to different conclusions, which can be summarized as follows:

            1. in the context of the tight International Monetary environment, automobile sales in major international economies have fallen sharply, and Chinese automobile sales have begun to show signs of weakness affected by the international market.

            2. China's automobile production and marketing is large, and the sustained high growth does not conform to the ive law.

            3. The current land finance and real estate economy have kidnapped the Chinese economy. The price of the housing market has risen rapidly. Too much money has been invested in the housing market, which makes the debt ratio of the people rise rapidly and occupies the consumption capacity of automobiles.

            5. the uncertain prospects and consumption degradation caused by the downturn of the Chinese mainland economy have led to the lack of public consumption.

            In short, no matter how to explain and find out the reasons, the data of economic operation in mainland China are there, and the data of automobile production and sales are here. The automobile sales that we have maintained 26 years of continuous growth are finally variable. What impact will this change have on our closely related aluminium alloy hub market?

            Firstly, the competition of aluminium alloy hub OEM will intensify. OEM aluminium alloy hub orders will shrink due to the decline in automobile production and sales, which will intensify competition among hub manufacturers.

            Secondly, the overall profit of aluminium alloy hub will be reduced. In order to boost automobile sales, car discount and price reduction are inevitable, so automobile parts, raw and auxiliary materials and other products, including our OEM aluminium alloy wheel hub, will inevitably be impacted by the price reduction requirements of the whole car factory; coupled with the intensification of competition among the aluminium alloy wheel hub OEM, manufacturers in order to compete for market share, irrational price reduction is inevitable.

            Third, OEM market solidification. During the period of explosive growth of automobile demand in the past few years, the attitude of the whole automobile factory toward the suppliers of spare parts was "turnips are fast and do not wash mud". As long as the whole automobile factory can supply goods in time and not let the whole automobile factory "stop line" is an excellent supplier. In the future, with the shrinkage of OEM orders, spare parts manufacturing enterprises will have excess capacity, intensified competition among enterprises, and the whole automobile factory will change to the suppliers of spare parts. More and more powerful, the evaluation of parts and components enterprises in the non-supporting system will be more stringent and prudent. Unless there is a special relationship, it will be very difficult for the peripheral enterprises producing traditional products to have the opportunity to enter the supporting system of the existing vehicle factory.

            Fourthly, reducing the cost of aluminium alloy hub enterprises has become an important task. Hub enterprises will be forced to reduce costs by all means under great competitive pressure. I believe it won't be long before we can see such things as abandoning the so-called "factory designation" of the ghost and taking the initiative to reduce costs when hub factories choose high-quality and low-cost paints themselves.

            In short, the domestic market is shrinking, "severe winter" is really coming. What "digging holes", "accumulating grain" and "preparing for rain" are believed to have been inculcated in these "chicken soups", but the key is to see who really digests and absorbs the nutrients that should be absorbed. Otherwise, "when the mountains and flowers are in full bloom", the sea of the market is there, but you are not here.

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