China’s Car Rebound: Price War Looming? 中国车市反弹：价格战越来越近？

By newsdoug on July 7, 2011

China cars: price wars ahead? Just when everyone was writing off China’s car market for the rest of the year on slumping demand, GM (NYSE: GM) and Ford (NYSE: F) have surprised everyone by reporting that their unit sales rose by about 10 percent in June, reversing declines in the last couple of months. (English article) Some analysts are attributing the sudden turnaround to a return in demand after a sluggish spring, when generous government incentives designed to boost consumption during the global financial crisis were allowed to lapse. A few new incentives were rolled out to replace the old ones, but industry watchers said at the time those new measures, targeted more at rural buyers than big city dwellers (previous post), were far less generous than previous ones and would have little effect. What no one is talking about, and what I suspect is happening here, is that the big automakers are starting to aggressively cut prices to keep up sales after investing billions of dollars in new production facilities over the last two years during the boom times. If that’s the case, look for sales volumes to pick up for the remainder of the year, but also look for falling profits for everyone, which should be most obvious starting around the third quarter for the big domestic players like SAIC (Shanghai: 600104), Geely (HKEx: 175), BYD (HKEx: 1121) and Guangzhou Auto (HKEx: 2238). Barring any major new incentives from Beijing, a looming price war, if it materializes, could easily last for the next two years as the automakers wait for demand to catch up with all the new capacity that is now coming on stream. If that’s the case, both domestic and foreign auto makers could be looking at a tough road ahead for the next year or two.

Bottom line: A rebound in China’s June auto sales could portend a looming price war that could last for the next 2 years as car makers grapple with a big new supply glut.

正在所有人都因需求低迷悲观看待中国车市今年余下时间内的表现时，通用汽车<GM.N>与福特汽车<F.N>双双公布6月份在华销量扭转了过去几个月的下滑态势，同比增长10%左右，令人眼前一亮，一些分析师将其归功于需求经过春季低迷後的回升。中国对汽车行业出台了一些新的刺激措施，来取代旧有的刺激政策，但业内观察人士当时表示，新措施远没有原来的措施慷慨，难以产生明显效果。少有人提出但我在猜测的一个原因是，经过过去两年的斥巨资扩张产能，各大厂商现在开始大规模降价以提振销售。如果猜测属实，那麽今年余下时间的汽车销售状况应会改善，但所有厂家的利润都会走下坡路——对於本土大型厂商如上汽<600104.SS>、吉利<0175.HK>、比亚迪<1121.HK>与广汽<2238.HK>而言，大约从第三季开始就会明显看到这一势头。除非政府出台新的重大刺激政策，否则一场价格大战将在所难免，且一旦打起来，很容易会在未来两年持续，因新产能已陆续实现，但市场需求姗姗来迟。如果出现这种情况，中外汽车制造商未来一两年的日子大概都不太好过。

一句话：6月份中国汽车销售反弹迹象可能预示着价格战越来越近，供过於求的局面或将导致价格战在未来两年持续。