Survey: Foreign car companies in the Chinese market "huge profits"

For the foreign car companies that account for nearly 60% to 70% of the market share of passenger cars, the Chinese car market has become the most delicious cake in the world. The total annual sales will reach a market size of more than 17 million units and its cakes will be delicious. The reason is that while the sales volume has reached new heights, it also enjoys the high profits of bicycles that other mature markets cannot match. According to the findings of the latest industry survey conducted by this website, the high profit of bicycles obtained by the most representative Volkswagen Group in the Chinese market among foreign car companies is not purely a case, but it is currently prevalent in the entire automobile industry in China. phenomenon. Moreover, this phenomenon will continue for a long period of time.

Recently, a report submitted by the Automotive Research Institute of Duisburg-Essen University in Germany showed that the average profit of the Volkswagen Group's products was 683 euros, and the profit rate was only 4.9%, ranking the last among the German car companies. However, the average profit of bicycles sold in the Chinese market was as high as 1,000 euros, 46.4% higher than the average profit of the group, and the profit rate was 7.2%. Through interviews with a number of industry experts and analysts offline, we learned that most people think that for a foreign brand, the achievement of a bicycle profit of 1,000 euros in China is not surprising and can only be regarded as a medium-to-low level.

In order to investigate the hidden causes behind the high income of Chinese auto makers in the Chinese market, the online industry survey (November 23 to 29) focused on this topic and accumulated a total of 2,718 people in the industry. participate. The poll results of Survey 1 (see Figure 1) show that up to 90% of the people in the survey who participated in the survey believe that the number of foreign auto companies that have achieved such a high bicycle profit is not only the Volkswagen Group, but the Chinese auto industry has been There has been a widespread phenomenon since. The data in this survey in the survey 1 indicates that the “abroad car companies generally receive high profits from bicycles in China” with absolute votes indicates that the Chinese market has so far been a “gold rush” for foreign car companies.

Previously, for foreign car manufacturers to make huge profits in China, the industry generally believes that it is due to inadequate market competition. Nowadays, with the intensification of the fierce competition in the influx of foreign brands into the Chinese market where the independent brands have risen, has the factors that have caused the high profits of foreign auto companies have changed?

In the survey 2 (see Figure 2), for the five influencing factors, “market competition is weaker than mature markets” was approved by 33% of the respondents, indicating that insufficient market competition is still the biggest factor causing the existing profit outflow situation to occur. At the same time, mid- to high-end markets have been dominated by foreign brands for a long time, and mid-to-high-end cars and luxury cars with more profitable bicycles have created billions of dollars in huge profits for foreign car makers. This can be seen from the 22% vote rate obtained from the “higher-end product positioning” factor; it is worth noting that the huge consumer groups driven by the rapid growth of the Chinese market are the accumulation of profits from foreign car companies. The very contributing factor to the force, we can see in the survey 2 that the turnouts of the two factors that benefit the rapid growth of the auto market and the “scale effect” are also few, with 19% and 12% respectively. In addition, the "unbalanced supply and demand relationship" obtained a turnout rate of 14%.

Data show that in the first nine months of this year, Volkswagen sold 1.48 million vehicles in China, which is twice the sales volume in Germany, and its two joint ventures in China (Shanghai Volkswagen and FAW-Volkswagen) realized operating profit of 1.3 billion euros. Compared with the operating profit of 4.8 billion euros in the first three quarters of the Volkswagen Group (because there is no consolidated statement, the performance of the two joint ventures in China has not been included in the Group's operating profit), the profit contribution of the Chinese market can not be underestimated.

“The Volkswagen Group’s profit from cycling in the Chinese market is not very high at 1,000 Euros. According to my calculations, the average profit of foreign brands currently earning in China should be around Euro 2,000.” Deputy Secretary General of the China Association of Passenger Vehicles Cui Dongshu Net said, "The key is that foreign brands are overpriced in terms of pricing, resulting in a huge profit margin." In his view, most foreign brands have entered the Chinese market, the market has become more competitive. The overall high-speed growth of the auto market did not increase the profits of its own brand of bicycles, so it is not the key to driving the high profits of foreign brands. In addition, the scale effect cannot be mentioned at all. For example, he said that the monthly sales of the Camry in the Chinese market exceeded 10,000 vehicles, while in the US market, sales of more than 20,000 vehicles can be easily achieved.

In an interview with the survey, CSM Worldwide analyst Sabani also emphasized that product positioning and cost control are the main reasons why foreign car companies have obtained such high profits from bicycles in China.

As the profit of bicycle enterprises has not been publicly disclosed to the outside world, it is difficult to accurately derive the actual profit of the car in terms of the market price of a car, taxes paid, and manufacturing and logistics costs. However, there have been rumors that the average profit of the global auto industry has fluctuate around 5%, while China once reached 20% to 30%. It is said that before China's accession to the WTO, the average profit of a car targeting a mid-range car can reach about 50,000 to 60,000 yuan. The profits of high-end luxury imported cars are more than doubled on this basis, and they are equivalent to the European and American markets for sale. The profit of the model is several times or even several times.

Some media have calculated that the average profit of each car is as high as 73,745 yuan, based on the sales figures of Guangqi Honda's 2002 Accord [Review Picture Forum] and Odyssey [Review Picture Forum]. Although the profits of bicycle brands of foreign brands have been thinning year by year in recent years, the horizontal comparison with other global markets is still very impressive. It is understood that the profits of Guangqi Honda's bicycles in 2009 still reached RMB 10,500. Although the profit of bicycles in 2008 was slightly lower than that of RMB 125 million in 2008, China is still the major market that contributes to the profits of Honda.

According to rumors, Suzuki President Suzuki said after finishing the examination in China that the Chinese market is full of money, "to China to save money." Although it is only rumors and rumors, it also shows how mad the ambitions of foreign companies are to take advantage of the Chinese market. Until now, high profits are still a special reason for foreign automakers to be optimistic about the Chinese market.

To this day, the majority of people in the industry insist that the phenomenon of high profits for foreign brands will continue for a long time. In Survey 3 (see Figure 3), only 36% of optimistic people think that this phenomenon is expected to change within five years.

At present, although self-owned brands have been making great strides towards the mid- to high-end market, the lack of limited core technologies and insufficient accumulation of independent intellectual property rights can only find a place in the mid- to low-end market at the expense of the cost of bicycle profits. Consumers in the high-end market can only look to foreign brands. "If we want to add an end date to this situation, I think it will take 10 to 20 years." Cui Dongshu said.