Carmakers struggle to gain traction in market

Visitors try out a Hyundai model at the Guangzhou auto show. [Photo by Cao Yingying/China Daily]

Complex outlook has some manufacturers making financial strides and others falling

Automakers' financial reports for the first three quarters of 2019 show quite a few made losses, while only a few were profit--making against the downward growth trend in Chinese automobile market.

Public data revealed in the first three quarters of this year, China produced 18.15 million vehicles and sold 18.37 million, a year-on-year drop of 11.4 percent and 10.3 percent respectively.

Changan Automobile has estimated net losses for the first nine months this year of 2.4 billion yuan ($341.01 million), to 2.8 billion yuan, a fall of 306.35 percent to 340.74 percent year-on-year.

In the first nine months, Changan sold 1.23 million vehicles, down by 23.6 percent from the same period of last year.

The two profitable joint ventures of the carmaker - Changan Ford and Changan Mazda - both saw sales fall in the first three quarters of this year. Sales at Changan Ford and Changan Mazda dropped 58.2 percent and 25.4 percent year-on-year respectively.

FAW Car, a subsidiary of FAW Group, released a report showing its net losses for the first three quarters this year are estimated to be 236 million yuan to 296 million yuan.

During the same period in 2018, the company had profits of 135 million yuan.

FAW Car pinned its losses on the gloomy domestic passenger car market and the emissions standards switch from National V to National VI.

Zotye Auto and Haima Automobile also reported losses.

Statistics show that Zotye had a net loss of 760 million yuan in the first three quarters this year, and Haima estimated its net loss would be between 164 million yuan to 244 million yuan in the first nine months of 2019.

Great Wall Motors, Jiangling Motors and JAC Motors on the other hand, all saw profits increase in the first nine months this year.

With a total of 724,000 vehicles sold, Great Wall Motors achieved an operating revenue of some 62.58 billion yuan during the first nine months of 2019.

The automaker's net profit for the third quarter alone totaled 1.4 billion yuan, up 507 percent year-on-year.

Insiders hold that Great Wall Motors' favorable profit performance is the result of its market restructuring, tactical discounting and its models conforming to National VI emissions standards.

Jiangling Motors generated operating revenue of 20.41 billion yuan in the first three months this year, a slight increase of 1.08 percent on the same period year-on-year.

Its operating revenue in the third quarter of 2019 was 6.69 billion yuan, up 13.28 percent from the same period last year.

JAC Motors said it expects a profit of 124 million yuan would be made in the first nine months, a year-on-year increase of 159 percent.

Government subsidies have greatly contributed to JAC's increase in profits, with data showing that the automaker received some 463 million yuan in government subsidies in the first three quarters.

Despite this, JAC's actual sales volume dropped 11.3 percent to 321,000 vehicles in the first nine months this year.

Foreign automakers are also facing a complicated market performance.

Hyundai Motor generated net profit of 2.78 billion yuan in the third quarter this year, a growth of 50.5 percent year-on-year.

However, the automaker has struggled in the Chinese market, selling 171,000 vehicles in the third quarter, a drop of 5.4 percent from a year earlier.

French carmaker PSA had operating revenue of 122.15 billion yuan in the third quarter, an increase of 1 percent year-on-year. But PSA only sold 91,000 vehicles in China in the first nine months this year.

United States-based electric carmaker Tesla generated a revenue of 44.52 billion yuan in the third quarter of 2019, a fall of 7.6 percent from the same period of a year earlier.