The profit of the automobile industry chain plummets: opening up new sources of profit into the key to survival

Abstract In the large jungle of the Chinese automobile market, the natural law of “weak meat and strong food” is showing a rapid and obvious effect. The first to play a role is the "tangible hand" and "invisible hand" in the market. The use of foot voting and policy retraction began to make the unsuitable enterprises gradually weaken and move toward...

In the jungle of the Chinese auto market, the natural law of “weak meat and strong food” is showing a rapid and obvious effect. The first to play a role is the "tangible hand" and "invisible hand" in the market. With the use of foot voting and policy retraction, the unsuitable enterprises began to gradually become marginalized, with Magic Speed, Lifan and Waterma. As an extreme case, the entire industry chain has experienced unprecedented financial pressures, and any small mistakes may lead to the collapse of enterprises. When self-owned brands are hard to find the fertile grassland of new energy vehicles, foreign brands in the distance have already looked at them. They use technology and brand as weapons to launch attacks without mercy. A large number of products are under the city this year.

Whether it is the capital level or the technical level, or the product service, the trend of the whole industry has been formed. A large number of talents flow to strong enterprises, and the reshuffle in the industry chain is clearly visible. In this process, new business models become a powerful weapon for their competition. Surviving has become the first point of competition in the jungle.

This year, like "Chang'an-BYD", there is a rare alliance among local car companies, and the parts and dealers' enterprises have "broken arms to survive", and even the joint venture car companies have begun to "forage" overseas, looking for the next A jungle that meets the conditions of survival is the ongoing reform of all. But in the life and death of this jungle, there must be a minority that can survive.

If the east side is not bright, then you will go to the west. On November 20th, Dongfeng Yueda Kia will launch the first batch of exported cars in Dafeng Port, Yancheng, Jiangsu. The total number of these cars will be 400 and will be sold to Egypt. In the future, Dongfeng Yueda Kia's exports will continue to expand, covering Eastern Europe, South Asia, Africa, South America, Asia and the Middle East and other regions and countries. This is a new move that Dongfeng Yueda Kia has come up with in the face of the growth of China's domestic market. Like Dongfeng Yueda Kia, in the case of China's domestic market is gradually saturated, the eyes of finding more markets are focused on overseas.

SAIC GM launched its export program in 2015, and in 2017 it sold its products back to the North American market. Coincidentally, Changan Ford is also planning to sell its products from the Chinese market only to the larger market. This depends not only on the market performance of individual brands, but even if it is strong, it is also thinking about finding a new market. Currently, Volkswagen China and its joint ventures SAIC Volkswagen and FAW-Volkswagen are also launching a plan to expand exports (mainly for emerging markets). Almost all of China's own brands have launched their own export plans, and the current annual export volume is nearly 1 million.

In the jungle of China's market, there are already too many players, and the intensity of competition is even the highest in the world. In the past few decades, the fast-growing auto consumer market has wiped out the pain caused by this competition, but when the growth of the auto market slowed down, many people began to feel helpless. In October this year, the Chinese auto market continued to maintain negative growth, and the passenger car market was even more tragic, with a drop of more than 10%. From the performance of the car companies, the growth is rampant and the losers are the public. It is necessary to be in love with the Chinese market, but like Toyota and other car companies, more markets around the world will be included in the map, which not only can spread risks, but also find new growth points.

But it is not enough to hope that exports will be enough. For the automobile industry, the “threat” comes from various links, and there are many outsiders trying to subvert this industry. According to a report by the Boston Consulting Group (BCG), by 2035, three new travel technologies for electrified, self-driving cars and shared travel will divide 40% of the profits of the automotive industry, including traditional parts supply, hybrid electric vehicles. The traditional profit pool, including sales, auto finance and the aftermarket, will fall from 99% in 2017 to 60% in the automotive industry. That is to say, the profits in the traditional automobile industry chain will be reduced by more than 2% per year.

In China, Baidu plans to include car companies in Apollo, while the car drip collects more than 30 car companies through the Hongliu Alliance. The car rental company Shenzhou has already purchased a car company, and is still planning another one; and the wealthy real estate developers are constantly looking for prey. At the traditional manufacturing end, the profits of car companies are actually reduced.

SAIC announced on November 12 that it will set up a travel company. Three years ago, it also set up an e-commerce platform. The two seem to be irrelevant, but they point to a common goal: to prevent profits. Loss. In the whole vehicle enterprise, Geely set up a Cao Cao special car, while Beijing Benz and BMW Brilliance moved their parent company's travel products to China. In the joint venture company, FAW-Volkswagen has already started an operation of the company in Changchun. In the traditional jungle of manufacturing, the whole vehicle companies have already felt the chill, they are looking for new sites, or to grab back a site.

In the jungle, it is not just the whole vehicle companies that make a living in the Jedi. Because of their large scale, they often have a multi-faceted transformation. In the upper and lower ends of the industrial chain, more companies are eager to explore the future. Dealer groups that will be hit by e-commerce at the moment are on a thin ice. They are particularly eager to find new profit growth points when new car sales are not profitable. "You can't just make money by selling new car sales, you need to transform and upgrade, you have to pay for after-sales service, and you want profits from fine management." It is the key to realizing profitability for dealers.

The downturn in the auto market has also spawned a new model of auto sales, opening up an online sales platform, combining online and offline. The new retail has reduced the pressure on the layout of heavy assets while improving the service experience, and the future may become a trend. At present, Weilai Automobile, Lectra, etc. have adopted such a channel layout form, and the service experience is also well received by consumers. In China, as of the end of 2017, the number of cars has exceeded 310 million. How to tap the treasure house of the aftermarket will be one of the destinations for dealers to find their dreams.

But for auto parts companies, the transition is even harder and more urgent. By 2035, the emerging profit pool (including data and intelligent network links, travel) is expected to account for 40% of the automotive industry's profits, a 40-fold increase over 2017. At present, the transformation of auto parts giants including Bosch, Infineon and China is shifting towards the future direction of smart driving and car networking, and there is still a lack of large-scale independent parts suppliers in these domestic technical fields. Actions.

In the field of power batteries, a number of power battery and lithium battery companies have begun to step out of the domestic jungle and seek resources overseas. According to statistics, in 2017, domestic multi-party forces deployed nearly 20 lithium mine resources projects overseas. The overseas acquisitions of auto electronics companies have also been frequent. For example, this year, Aerospace Technology acquired overseas auto electronic assets. Junsheng Electronics acquired the US automotive safety system supplier KSS and the German TS Daoen automotive information sector business, and so on.

The understanding of consumption is also the key to finding a new way of competition. Whether it is a car or a dealer, if you want to gain new growth points, you must grasp the latest consumer demand after the 90s. At present, China is in a big era of functional consumption to enjoy consumption, as is the automobile industry. Whether it is financial leasing or low-down, low-interest financial products, automakers, dealer groups and third-party companies are all involved in this area. Just like a survival game, the first to find the "hunter" of the new jungle, will get the tickets for the next race.

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