In mid-July, the market analysts of the national car manufacturers returned to the factories after discussing in Changchun for four days. The main content they discussed was the market expectation of domestic cars in the second half of the year, and manufacturers will decide on their plans for production reduction in the second half of the year according to this expectation. After the domestic car market experienced price whirlwinds in May and June, the market continued to slump and these manufacturers finally decided on the next rescue plan – cut production. However, whether it is price cuts or production cuts, auto parts companies, like manufacturers, are under tremendous pressure. Car manufacturers cut production There is no wind. On July 14, the market analysts of dozens of car companies across the country began to leave Changchun. The event, which was simply named "National Sedan Conference," was doomed to be carried on the history of Chinese cars - this is the history of domestic cars. For the first time, manufacturers collectively discuss a topic that has never been discussed before - reducing production. Without the participation of the media, one of the participants revealed to reporters that they had all signed a confidentiality agreement because the information disclosed by various manufacturers was the second half of the production cuts. This is obviously not a good news for car manufacturers. . However, the fact that production has been reduced cannot be evaded. After the transfer of Shanghai Volkswagen sales company CEOs, the latest news of Shanghai Volkswagen is to reduce production, although Shanghai Volkswagen sales staff are reluctant to admit production of this statement, but he still told reporters that the company has made new in the second half of the year according to market conditions It is expected that "the number of production and production has decreased, but the market share has not been reduced," he said. According to internal sources, Shanghai Volkswagen’s production cuts are very large, and the most intense South China market is 20% more than the original forecast. During the “National Sedan Conferenceâ€, relevant persons from the Audi brand of FAW-Volkswagen told reporters that it may have to reduce its expected sales target, but the specific rate of downturn will have to wait until after the end of the meeting, according to the data uploaded by the meeting. Make a decision. Of course, it is not only FAW-Volkswagen and Shanghai Volkswagen that plan to reduce production. The situation that the reporter understands is that all major car manufacturers, including Nanjing Auto, have already prepared or plan to reduce production. [Contradictions between Parts Manufacturers and Manufacturers] In fact, the sedan manufacturers have not been able to make a decision to reduce production, which has their difficulties. “According to the general procedure, each manufacturer had already placed an order for this year for the upstream parts and components manufacturers in September last year,†said Zhong Dong, a researcher at the Nanhua Strategic Research Department and an expert in the automotive industry, Zhong Dong. Production cuts are a complicated process. "It's not simply that the reduction will be reduced." In an interview with the reporter, Xue Jian, general manager of the Sino-foreign joint venture Renyida Parts and Accessories Co., Ltd., which provided partial auto parts to some domestic auto manufacturers, stated that the company’s supply of parts and components requires advance booking and production companies produce according to orders. Zhong Dong said that domestic supporting enterprises are better, while domestic cars currently require many key parts and components to be imported. They must go through customs and other links. Therefore, many manufacturers need to provide advance deposits to the upstream. What's more serious is that the parts and components of several domestic automobile manufacturers are in the group's system. Zhao Zhongxin, secretary of the FAW Liberation Party Committee and general manager of FAW Trading Co., Ltd. said in an interview with reporters that FAW-liberated parts are FAW. The proportion of supply within the group system is as high as 60%. Some people in the industry even revealed to reporters that some of the supporting factories in the system rely on a few or one company to support the operation, and at the beginning of each year, they have to arrange production throughout the year according to the order. Large-scale production cuts may have a fatal blow to some companies. . “Now many manufacturers are negotiating with upstream parts and components companies,†said a vice president of sales for a car company. The purpose of the negotiations was to minimize the losses of the two companies. Differing from the reduction in sales profits caused by the reduction in the production of automobile manufacturers, parts and components companies are also faced with the losses caused by the original orders and the backlog of steel, plastic and other raw materials. However, parts and components are obviously in a disadvantageous position in the process of negotiating with the whole economy. “We have a very difficult relationship with the big factory and we must have a deep relationship.†Xue Jianshe said. In this case, the loss caused by the reduction in production is more than the pressure on the parts. The pressure of car price cuts In fact, the upstream component manufacturers have not had a good life this year. In the hot first quarter of the auto market, manufacturers have made a lot of money, and parts and components have been suffering due to the sharp rise in the prices of raw materials and steel. From April onwards, the state’s macroeconomic regulation and control of steel prices fell, but at the same time the automotive market began to slump, the price of automobiles fell sharply, and the pressure from OEMs to lower prices began to shift to upstream components. “I’ve been very upset lately because I’ve received information from OEMs requesting to reduce the price of parts again and again, and I’m still very tough.†President of Delphi China, the world’s largest component giant, was helpless at a media conference. Indicated. Because the competition in the domestic auto parts supply market is very fierce, almost all domestic parts suppliers have encountered such an embarrassment, that is, the auto manufacturers put forward the price reduction requirements for spare parts suppliers that have no room for maneuver, otherwise they cancel their zero. Qualification of parts supply. At the same time, vehicle companies also drastically reduced the price of accessories. At the beginning of this year, Nanjing Fiat announced that it has lowered the price of all its auto parts in an all-round manner. At the same time, BYD also announced that it will adjust the retail price of its full-scale vehicle parts. In the 5th and 6th months of this year, domestic mainstream cars have all undergone a substantial price reduction, and the price cuts of many mainstream vehicles have reached as high as 10%. "These price reductions are very large," and some of them are squeezed out of the profits of spare parts. ," said an analyst at China Automotive Consulting Corporation. However, even if the price cuts, it did not eliminate inventory pressure. According to data from the China Association of Automobile Manufacturers, the accumulated inventory of domestic cars in the first half of this year has already reached 160,000 yuan. “There is a way for OEMs to respond to the current inventory backlog,†Zhong Dong said. One is to reduce consumption by reducing prices, and the other is to cut production. The manufacturer is now looking for a balance between the two, but unfortunately, both methods have exerted great pressure on the upstream components. Stainless Steel Pipe Fitting, Brass Pipe Fitting, Elbow Pipe Fitting, Water Pipe Fitting ZHEJIANG KINGSIR VALVE CO., LTD. , https://www.kingsirvalve.com
The domestic car industry is about to start another whirlwind.