Automotive industry suffers from structural "overcapacity"

The “overcapacity” in the auto industry is not a new topic, but with the first negative growth in the Chinese auto market in April for 27 months, the “overcapacity” crisis may really emerge.

Since the beginning of this year, various stimulus policies in the auto industry have been withdrawn from the market, oil prices have continued to rise, central banks have continued to raise interest rates to tighten liquidity, and Beijing has begun to implement limit-limit policies. . . . . . Many bad policies gathered to enhance the wait-and-see mentality of consumers holding coins for purchase. As a result, the traditional small car market in May replaced the traditional off-season in June, and the sales off-season arrived ahead of schedule, while more car dealers have come to the next 2 The month's end market is also not optimistic.

“The current monthly sales are only 60% of the normal months of last year.” A Guangzhou dealer told the “First Financial Daily” that the auto market situation since February of this year can only be described as “very cold”.

However, it is worth noting that this round of “overcapacity” should be a structural surplus, rather than the overall industry-wide excess, especially in the self-owned brand car companies should be worth noting, this phenomenon from the performance of major listed car companies in April Performance has been evident.

National Securities Auto Industry analyst Cao He told reporters that the auto industry has entered the adjustment period, and may experience two years or so, the entire industry will need to be in 2013 to form a new round of high-speed growth, but the magnitude will not be like It was so high before.

Great Leap Forward in Production Capacity and Industry Adjustment

Cao He believes that the stimulus policies in the past two years have led to the early release of consumption potential, coupled with the lag in the construction of urban infrastructure, and the withdrawal of stimulus policies, and even changes in the macroeconomic environment. This is an objective factor for the industry to enter the adjustment cycle. .

In the past two years, the automotive industry has experienced doubling growth. The size of China’s auto market has also increased from more than 9 million units in 2008 to more than 18 million units in 2010.

Affected by the rapid development of the Chinese auto market in the past two years, all auto companies have put forward more ambitious goals in the “Twelfth Five-Year Plan”. Among them, in the “Twelfth Five-Year Plan” of several domestic automobile groups such as “Four and Four Small”, SAIC’s production capacity is planned to be 6 million, Dongfeng, FAW and Chang’an are all 5 million, and BAIC is 3.5 million. Vehicles, Guangzhou Automobile 3 million. Only the production capacity of these companies reached 17.5 million units. If the planned production capacities of Chery, Brilliance, Great Wall, BYD, etc. are all added together, the capacity of the Chinese automobile industry in 2015 will reach more than 40 million.

In addition, from the warnings of the NDRC last year and the capacity plans of the major car companies, if the planned production capacity becomes a reality, in 2001, the cumulative production capacity of 14 domestic mainstream automobile companies will reach 23 million, plus other domestic automobile companies and automobiles. The total production capacity of the industry will be more than 25 million.

Even if the domestic automobile market is calculated at a growth rate of 10% in the next five years, only 29.8 million vehicles will be sold in 2015, and the gap is very obvious.

Faced with this situation, not only did officials of the National Development and Reform Commission publicly raised the issue of overcapacity at the end of last year, but also during the "two sessions" this year, Chongqing's mayor Huang Qifan "shouted the table" and "reproached" the company's outbound moves to build factories.

Zhang Zhiyong, an automotive analyst, told reporters that there is no scientific basis for the capacity planning of the auto group. In addition, the announced production capacity is in the process of building capacity. It is still not clear whether or not it is “verbal”. If it is under construction, then it is definitely overdone.

In fact, the existing car companies have made rapid advancement in the auto market in China. Recently, Audi executives stated at the annual shareholders’ meeting that although China has surpassed the United States as the world’s largest auto market, the Chinese market is facing many problems such as rising oil prices and increasingly stringent registration procedures for new cars. This year, the Chinese auto market may appear “ Cooling phenomenon.

The previous four months of automobile production and sales data also support the above assertion. According to the data from the China Association of Automobile Manufacturers, the production and sales of automobiles in the first four months increased by less than 6% year-on-year. In April, the production and sales of automobiles even experienced the first negative growth in 27 months.

The drastic changes in the market have also been reflected in the first quarter earnings of listed car companies. Of the 20 automakers in the A-share market, 8 had a negative growth in net profit; among the auto parts companies, 10 had a negative growth in net profit.

Dong Yang, secretary general of the China Association of Automobile Manufacturers, believes that the auto industry has historically achieved sales growth that is higher than the growth in output, and the profit growth rate is higher than the sales growth rate. However, from January to April this year, the profit growth was significantly lower than sales. The growth rate indicates that business efficiency is declining.

Ping An Securities's analysis report believes that taking into account factors such as rising costs and rising costs, the auto industry's profit margin will decline from a high of 9% in 2010 to a normal level of about 7%, and the industry's total profit will decline by a certain percentage year-on-year.

Differentiated overcapacity

“The investment of large enterprise groups is basically in line with the law. Historically, the average annual growth rate of automobile production and sales has been 24% in the past decade, that is, the market has increased twice every five years, and the large enterprise group’s “12th Five-Year Plan” period The plan is only doubled. It can be said that the plan has not been separated from reality.” Dong Yang said in an interview with reporters.

From the current point of view, the joint venture's capacity planning is relatively rigorous, guided by market demand, and investment returns as a measure of the expansion of production capacity. Since last year, joint ventures such as Dongfeng Nissan, Guangzhou Automobile Honda, Dongfeng Honda, FAW-Volkswagen, and Shenlong Automobile have all started capacity expansion.

However, the expansion of production capacity of self-owned brands has certain blindness. The premise of their “12th Five-Year Plan” for the automotive industry is that the market share of independent brands reaches 50%. In addition, local governments that are keen on auto projects are added. It also boosted the impulse of expanding the capacity of independent brands.

Especially in the mini vehicle market, overcapacity has already taken shape. In the first two years of domestic micro-vehicle craze, according to incomplete statistics, at least 7 million vehicles have been formed and under construction. Last year, the sales volume of mini-vehicles was only 2.5 million, which is still driven by various national stimulus policies. Under the realization. With the exit of the auto market stimulus policy this year, it has become increasingly weak. In the first four months of this year, the sales volume was only 890,000 units, which fell by nearly 7% year-on-year.

It is also based on the above reasons that the trend of differentiation of auto companies becomes more obvious. "With the withdrawal of stimulus policies, the competitiveness of luxury cars will inevitably be stronger than the low-end models based on self-owned brands." Dong Yang analyzed.

According to the latest market index released by the Beijing Asian Games Village Auto Trading Market, independent brand dealers are most pessimistic about the future price judgment, with 60% judging that the automobile prices will continue to decline in May; dealers of joint venture brand vehicles believe that the highest proportion of price stability is near half. The growth rate of the luxury car segment is indeed higher than that of the overall auto market. Popular models such as the Audi Q5 and the new BMW 5 Series still need to wait in line to get a car, but even so, the auto companies have already smelled the market crisis.

Affected by this, Beijing's distributors have raised more concerns about future earnings. The index of the Beijing Yayuncun Automobile Exchange Market shows that car dealers' profit confidence index was lower than the sales confidence index in May, and the dealers are still in a state of overall loss. .

The thirst for funding

The huge capacity planning has given rise to the extreme desire of car companies for funds, and this craving for self-accumulation is difficult to achieve. Listing is undoubtedly the best way.

However, the listing of automobile enterprises has undoubtedly securitized the risk of overcapacity and transferred it to public investors.

The China Securities Regulatory Commission approved the first A-share issuance of BYD (01211. HK) on May 9. BYD's three-year return to the A-share plan has settled down to this point and is expected to land in Shenzhen this year. According to the prospectus published by BYD, BYD plans to issue no more than 79 million A shares in the Shenzhen Stock Exchange, which represents a ratio of 2.35 billion total shares after the issuance is not higher than 3.36%. The issuance of stocks will raise funds of 2.192 billion yuan and will be used for three projects including lithium battery, automotive R&D production base and parts and components construction. However, the scale of this financing has shrunk by 23% compared with the previously identified RMB 2.85 billion.

Zhang Zhiyong stated that BYD’s recent return to A-shares would be successful, indicating that after the stock market recovered to a certain extent, the government began to encourage listed companies to obtain financing for listing, and the pace of its listing will accelerate.

He believes that at present, China's auto companies listed the money is very strong meaning, the starting point is basically to solve the funding problem. Especially in the current environment of tight bank credit, the cost of loans is high, and the listing highlights the importance of it.

In addition, Great Wall Motor (02333.HK), which has been planning to return to A shares, is also making final sprints. Great Wall Motor plans to list A shares later this year and to raise more than 5 billion yuan. Great Wall Motor announced last year that it intends to apply for issuing no more than 120 million shares in Shanghai.

Including Chery, BAIC, and FAW are also seeking listing to solve the financing channel issues, and thus provide funding support for the completion of the 12th Five-Year Plan. The already-listed hippocampus (000572.SZ) and Changan Automobile (000625.SZ), etc., have also frequently financed through targeted private placements to serve their capacity expansion.

However, Changan Motor’s issuance at the beginning of the year suffered a “break”, and BYD returned to A at the cost of shrinking financing. This also shows that under the circumstances that the environment has weakened, the former darling of the capital market has already felt the industry’s adjustments. The market is cold. If the road to the capital market is going to be difficult, how should the auto companies solve the capital demand problem in the face of the huge capacity planning in the "Twelfth Five-Year Plan" and the cooling auto market?