In January 16th, Xiamen auto, Foton released the 2002 annual performance prediction, two car companies are expected full year net profit will increase over the previous year more than 50%.

According to the State Development Planning Commission news, 2002 annual production of 3250000 cars, more than 38% of the year; sales of 3248000 cars, more than 37.1% of the year. The whole industry realized profits of 43100000000 yuan, an increase of 60.94%.

A miracle occurred. The automobile industry of our country in the aspects of technology, production scale is not a competitive advantage, once considered to be one of the biggest impact, after joining WTO, the industry however, the strong growth of the automotive industry shows that, the pressure can also be converted into power.

More interesting is, Chinese automobile industry shows great prospects for development

Statistical data shows, China individual car ownership has increased from 816000 in 1990 to 7680000 by 2001, 2002 people to purchase a car for more than 95%. With the China enter comparatively well-off society in the round, there will be more and more people to purchase a car owners, the car will be the escalation of consumption structure of residents priority. According to authoritative prediction from the Chinese Automobile Industry Association said, is expected to 2010, China automobile production and sales will reach 6000000 units, accounting for the world market share of 1/10, Chinese will become the American after Japan, the world's third largest car market. But the car plates in the first year has been the trend in the market sit up and take notice. Despite the weakness in 2002 the year of Chinese market trends, auto listing Corporation has shown a hitherto unknown strong, Oriental motor, Tianjin automobile, FAW car, Jiangling Motors, Changan automotive and parts industry leading Weifu Gaoke etc., are out of the wave of big situation, and even become the leader in stage of market. Most automobile listing Corporation's main business revenue and net profit have varying degrees of growth.

At the same time, the auto industry of internal integration in all-around way, merger and reorganization be raging like a storm

According to statistics, to November, involving only the "big three" car company, of 8 cases. Such as SAIC Wuling Automobile Co., Ltd. established in general motors and the China Company, Liuzhou Wuling cooperation, and the Raiders, $59700000, the acquisition of Gm Daewoo Automobile Technology Company 10% stake, near the end of the year, and the new news, GM and SAIC, the investment in Shandong Yantai vehicle factory. The foreseeable future, China car industry restructuring pace is accelerating, industry concentration will increase rapidly. Notable is, in 2002 car industry restructuring, transnational automobile giants such as general, Toyota more and play more, and there is a possibility of greater foreign acquisition of the automotive industry.

However, analysts have pointed out, be in full swing behind the automobile industry has some secret worry. In large scale after the merger, the company will face the enterprise cultural differences, different issues such as business ideas, in fact, larger scale does not mean more profits, according to statistics, in twentieth Century 90 in the West hundreds of cases, 60% of the acquirer in the completion of the takeover, the decline in performance.

Corresponding with the huge market potential is, auto industry competition is increasing, it is understood, this year there are more than 30 new models listed, the auto industry will enter a new round of war. Analytic personage points out, the car company to expand market share, price competition, profitability has been changed, most of the listing Corporation net profit growth will be lower than the main business revenue growth rate.

In addition, the influx of tariff and import car is the main factor that restricts the growth of the automobile industry

The tariff in 2002 slashed import car cost decreased by an average of 15%, the price of imported cars down the rate is expected to reach 15% or even higher, will give the domestic automobile market has brought a strong shock wave, the price will become the main means of competition of automobile enterprises, experts predict the average decline in domestic car prices will reach 10%.

Of course, not to underestimate the development prospects Chinese automobile industry, but also can not blindly. With the rapid increase in the degree of industry concentration, the differentiation of automobile company will become more and more obvious, therefore, in an increasingly open and fair market environment, study on individual ability of management is becoming more and more important.

To break through the bottleneck

Industrial policy will be a major adjustment, promote the benign development of the automobile industry

Infer according to government "fifteen plan" and the WTO agreement, the new industrial policy will escape "the national automobile industry", in order to improve the competitive power as the goal, to relax the regulation and market access, use of existing industrial base and competitive advantage, strengthen and automotive industry developed countries cooperation, join the division and reorganization of international automobile industry. Can foreknow, for key areas of development, the government will have a tendency to policy, domestic enterprises have leading competence in related fields will get good development environment and opportunities.

Recall system to change the product competition mode

In 2002 October, the State Quality Inspection Administration announced the "defective automobile product recall management regulations" (Draft), is expected in the near future, the recall system will be fully implemented, the implementation of the system will promote the integration of the industry, increase the concentration degree of automobile industry, automobile manufacturers will pay more attention to quality, service and other aspects of competition.

The forthcoming consumption policy will improve the automobile consumption environment, encourage private car consumption

The State Planning Commission to formulate "the automobile consumption policy" (Draft) core and emphasis on how to effectively improve the automobile consumption environment, encourage private car consumption, thus promote the development of automobile industry Chinese. Consumption policy will soon launch means policy guidance by the inhibition of private consumption to encourage private purchase a car.

Income growth and improving the social security system will promote the automobile consumption

The income level of residents are the decisive factors of automobile consumption. At present, unable to prove the general income national household car will be fully into ordinary households, but the average income is constantly increasing, the widening income gap, means the ability to more and more people have a car consumption. In recent years, some domestic purchasing power from the richer parts of consumer rising trend, automobile consumption is entering the stage of rapid development.

The reform of the tax system to encourage car consumption of automobile

The car tax reform that car purchase link from production to consumption tax using transfer, reduce tax expenditures, reduce vehicle purchasing one-time tax expenditures, reducing automobile consumption to enter the threshold, the increase of consumer groups.

The implementation of fuel tax will promote the automobile consumption and the popularity of the automobile product structure adjustment

Fuel tax policy reflects the fair and reasonable principle, private car consumption tax will reduce the actual expenditure, beneficial to popularization of personal automobile consumption. In order to reduce the use cost, road transport, public transport and taxi operation industry will use a lot of energy saving, environmentally friendly vehicles, diesel locomotive and car cleaning power proportion will start to raise. At the same time, heavy truck carrying high efficiency and large and medium-sized buses in total car consumption in the proportion will rise.

Improve automobile consumption credit policy will expand the automobile consumption groups

At present, the service car credit Chinese limitations in the main structure and product structure, leading to less than 10% of the buyers to choose credit consumption, compared with the international automobile consumption credit mean 60-70% levels, the enormous space for future growth. In order to improve the credit environment, the central bank to take appropriate development principles, to make corresponding adjustment and change in 5 aspects the loan term, loan, car loan interest rate floating range of subject, the proportion of the first payment, account restrictions. The automobile consumer credit policy gradually consummation will be conducive to the development of space expanding automobile consumption market.

Improving infrastructure and promote the development of the automobile industry with the increasing national road construction investment, fast passenger transport system with the "five vertical and seven horizontal" main line highway based has been basically established, with the national highway network based on the length of heavenly stems and earthly branches connected, supporting, spread all over urban and rural road transport network has been basically perfect, contradiction traffic supply will effectively ease, creating good conditions for the development of automobile industry.

Slowdown

Enter a rapid growth phase in 2002, industry wide production of 3250000 cars, 3248000 cars were sold, up 38% and 37.1%. To sum up, the auto industry of our country has entered a period of rapid growth. 2003 auto demand is expected to be 3850000 units, year-on-year growth of 18.5%, a larger decline than the high-speed growth in 2002.

Industry profit will be rapid growth, consumption structure more reasonable

Due to the impact of foreign products and domestic competitive factors, the next few years car prices will continue to decline, but the decline will be relatively limited, coupled with the expansion and structure factors of improvement, the industry overall net profit level will remain stable, the industry overall profit level will remain similar to income growth growth. Due to increasing competition in the market, the listing Corporation in automobile industry will appear polarization, part of the lack of core competitiveness, enterprise performance has not reached the scale effect will appear relatively substantially glide, large scale, comprehensive strength in the industry forefront of firm profit will be higher than the industry average growth.

Because the transfer of object oriented automobile consumption, private consumption, give priority to with the car's passenger car market will grow rapidly, the proportion of consumption increased from 8% in 1990 to 34% in 2002, is expected in 2005 will occupy 40% of the market share; the proportion of truck in the car in the total will decline, down to 30% after the relatively stable; bus rapid growth will slow somewhat, although the total will continue to increase, but growth will become school

Car will become the main industry growth, and maintain a good profitability

Affected by many factors, the import license and import quota delay payment, fluctuations in the exchange rate, import car not expected price decline; in the domestic car to take the initiative to adjust the price incentives, from February onwards, car sales growth has accelerated the trend from month to month. In 2002, car sales reached 1090000 vehicles and 1126000, year-on-year growth of 55% and 56%, blowout type growth.

International experience shows that, when the car price / rate of per capita GDP down to 2-3 times, automobile consumption will gradually into the ordinary family, developed coastal areas China has reached or come close to the ratio, car consumption started to enter the relatively rapid growth phase from 2002. In 2003 the demand for cars to 1385000 cars, 23% year-on-year growth. Projected 2005 sales of 1920000 units, with an average annual growth rate of about 28%.

As the car demand growth comes mainly from the ordinary car, wool interest rate is relatively low, coupled with falling prices, industry gross margins will continue to decline, but the scale effect, net profit rate currently does not decline.

Truck production and sales growth, the proportion of heavy vehicles, industry profitability will gradually improve

Taking into account the freight volume growth slowed, the transportation structure is relatively fixed, increasing the total expected truck, but the growth trend will be relatively slow, and the total amount of than downward trend, than in the fall to around 30% will be relatively stable.

In 2002 industry sales revenue growth, gross profit, net profit and raise the level of total profit, improve. In 2003, heavy duty vehicle growth will be slowed, the overall increase truck will be reduced, the industry will have a slight growth index.

Passenger growth and will continue in a low profit status

Because the passenger car sales growth slowed, lower trade barriers intensified market competition, price war resulted in the decline in sales and profitability weakened, is not expected to be in 2003 this situation happened obviously, the bus industry will maintain a low profit status.

Micro - pull small car industry growth, industry profitability was enhanced

From 2001 onwards, the effect of size make the mini car industry gradually get rid of losses, profit ability to strengthen, affected by the car prices, car prices is also estimated to have dropped to a certain extent, the entire industry sales revenue growth rate will be less than sales growth, through effective cost control, mini car industry will maintain the current gross margin net profit level, over a period of time.

Agricultural vehicle industry has entered the mature period

All the signs indicate that, the agricultural vehicle industry stepped into maturity after 20 years of development. The level of product technology, agricultural vehicles have been relatively low, in the national requirement for agricultural vehicle safety and environmental protection under the background of increasingly strict, the manufacturing cost of agricultural vehicles increase, profit space, lost the price advantage, the market has begun to shrink, the development of the industry prospects uncertain.

WTO shock wave one wave

Due to the automotive industry for the buffer period of 4-5 years in the elimination of tariff and non-tariff barriers, so in the early stage of entering into WTO, the automobile industry the impact is relatively limited, but with the gradual lowering barriers, the impact will gradually appear.

The reduction of import tariffs and quotas increased impact

Domestic car products compared with imported cars, in all aspects of development ability, the technical performance and brand image, the existence of the gap, and does not have the price advantage, and therefore affected by the impact of maximum tariffs and quotas. The automobile industry by the impact of the WTO is embodied in our cars and parts industry.

The tariff reduction will lead to import car prices fell in the 5 years of about 30%, an average annual reduction of about 6%, the China auto and auto parts products are facing price impact, especially the car and car key parts and components, has not yet formed a large scale vehicle and parts production enterprises will not be able to bear the price competition, the final exit the automobile industry at the same time, the domestic auto parts products, the market share will be moved

The advantages and disadvantages of foreign investment policy

Cancel the localization rate makes the vehicle factory benefit, cancel the localization rate limit, make the most of the domestic automobile enterprises in the global procurement of spare parts, increase the proportion of imported components, will effectively reduce the production cost, improve vehicle performance, improve the competitiveness of products. Can choose the localization rate will be compared to vehicle enterprises.

But the development of parts and components industry will be affected, in addition to low value-added labor-intensive, material intensive products, the majority of parts and components products no technical, quality and price competition ability, the price of imported products, the number of shocks, may also be completely lost supporting the market, because of the WTO effect.

To reduce barriers to foreign investment and technology transfer

For a long time to reduce restrictions on foreign investment and foreign investment to eliminate barriers to entry, will stimulate the transnational automobile group to invest more in China, intensified competition in the domestic market, however, due to the related protocols of WTO no clear provisions on the proportion of shares, the government may still continue to adhere to the equity policy.

To reduce the requirement of technology transfer will aggravate the competition of the automobile market, the market demand for products to improve the level and quality of technology, speed up the upgrading of products, from the demand of foreign competition, will choose to increase the level and degree of technology transfer, in order to reduce the cost of research and development, may choose to build research and development base of product application in china.

Let go of the car industry regulation and market access commitments do not affect the government will continue to pursue the protection policy

Can be expected in the early stage of joining the WTO, the government will still not covered in the agreement of the field to pursue protection policy, local protectionism will still exist in a certain period of time. In order to effectively control the car imports, the country also set up other barriers, such as the national designated 4 coastal ports and two land ports for vehicle import ports; imported vehicles must be approved by the General Administration of customs, holding the national import and Export Commodity Inspection Bureau "license", can apply for a motor vehicle license plate.

In 2002, the delay of automobile import license and quota payment weakened the impact of imported cars for the domestic market, with car import permit illegal circulation and the yen, the euro exchange rate rise is greater than the impact of tariff reduction effect on car prices, leading to import car prices did not fall but rise.

Jianghuai Automobile 600418

Jianghuai Automobile production base, light truck chassis special for the largest, the main products are VAN Chassis and commercial vehicles. Company bus chassis integrated output ranked first in the country, of which 7 meters special bus chassis in the similar products in the market share of 70%. With the company and modern Korean co production of the "refine" MPV production and sales volume continues to expand, the whole business is expected to contribute more profits. We will vigorously develop special chassis, chassis, city bus transportation, product line gradually bring to the company to enhance the performance of space.

Fukuda car 600166

Listing Corporation only the largest light vehicle base Beiqi group, the main products are three or four wheel agricultural vehicle, combined harvesting machinery, large and medium horsepower tractors, trucks, light bus series. In 2002, the company has formed a complete series of products structure except outside the car, FAW, Dongfeng number after product varieties. Expected 2003 Auman heavy truck production and sales year-on-year growth of 400-500%, heavy on the company's main business revenue reached 32.42%, sales profit contribution reached 48%.

FAW Sihuan 600742

The company is the FAW Group affiliated enterprises, the main products are automobile wheel, car, car, and shares of Fawer - Jiang Sen controls automotive trim Systems Co., ltd.. In recent years, the production of more than 15% annual growth rate. The company is the leading enterprise production truck car FAW Group, 80% car products for FAW Group matching, through the replacement of assets and the company's products, automotive interior Fawer Johnson company lays the foundation of company shares in order to further enlarge and strengthen the product has broad prospects for development. In 2002 3 quarter report shows, Fawer Johnson -- have become the company's new profit growth point.

Changan car 000625

Automobile production enterprises the largest production scale, the products are Changan series of mini truck, mini car, Changan Suzuki series cars as well as the upcoming Changan Ford Fiesta sedan. The mini car market share of more than 25%, ranking the first. Taking into account the company Micro automobile production capacity is saturated and support growth in 2002 is not persistent, expected 2003 earnings will fall. At the same time, the company faces greater funding gap, the refinancing demand, nearly 3 years the net assets yield with the issuance of new conditions.

FAW car 000800

Mainly engaged in the production of FAW car red flag car, engine and transmission parts assembly, the leading product for the red flag car series, including the red flag Mingshi, red flag, Jetion 18, century star and Hongqi flagship and other kinds of variation. As of 9 at the end of 2002, total sales of 21963 cars, 103.49% year-on-year growth, the completion of the main business income of 1255323700 yuan, net profit of 54013900 yuan.

Shanghai car 600104

Shanghai is the largest production scale, the system supply capacity of the strongest car parts production base, all kinds of products are mainly for the subsidiary vehicle plant to provide support, holding company SAIC a 36.6% share of the domestic market. The main products of Shanghai automobile car chassis, transmission, suspension spring, lights, steering, brakes, automotive air conditioning compressor, transmission shaft, recently added auto radiator products, at the same time also holds a 20% stake in Shanghai GM and SAIC financial 40% equity. The development direction of the company is to establish the vehicle as a leader, to supply the service main body, the diversification of the auto parts group enterprises in the key auto parts system.

Xiamen car 600686

Holding companies, holders of Xiamen Golden Dragon Bus Co. Ltd. 60% of the equity, Xiamen Jinlong automobile Limited company 100% equity, Xiamen Jinlong United Automobile Industry Limited company 25% equity, the Golden Dragon Bus company mainly produces large, high-grade passenger car, light, and has formed 7 series, covering 4-12 meters long, various types of passenger cars 8-55 seat. Since 1990 the company income, with an average annual growth rate of 80%, product market retains the quantity is nearly 30000, tourism system renewal of vehicles more than 60% market share, is gradually become the most competitive bus manufacturers.

 

(Note: This report is based on Research Institute in 2003 annual meeting "strategy of automobile and related industry investment value analysis report" (Zhu Anping, Feng Haihua, Yu Hui, Sun Zhanjun, Wu Kang, Huang Meilong, Tang Qian) was abridged, part of the contents, data update. )

Source: Securities Times Author: Shenyin Wanguo Securities Research Institute

Editor: Bo Yan