Corporate Transformation Hits Vehicle-City Commercial Vehicles and SUVs in April


Dongguan, which started with processing trade, is in a matter of trouble. The implementation of the Labor Contract Law, the continuous appreciation of the renminbi, the rise in raw material prices, the adjustment of the national processing trade policy, and the tightening of taxation and environmental protection policies have come one after another. In the face of heavy pressure, closures and relocations have become the choice of some companies. The transformation of enterprises in Dongguan also has a direct impact on the auto market. From March 31 to April 20, the number of new cars in Dongguan was about 6,000, while in April 2007, the total number of licenses in Dongguan was 10,646. This year last year, sales fell significantly, except for BMW, Chery, and hippocampus. With a few brands selling well, distributors of mainstream brands such as FAW Toyota, Dongfeng Nissan, and Guangzhou Honda have shown that the auto market is relatively cool and it is difficult to complete the established sales tasks for this month. Among them, the transformation of the enterprise has resulted in the reduction of the target consumer groups of commercial vehicles, and the unclear economic situation has hampered the consumer confidence of potential buyers of cars, which has become an important reason for the recent weakness of the auto market.



Commercial vehicles, minivans, and SUVs hit hardest

According to statistics, from 1978 to 2007, Dongguan has granted a total of 37,376 processing and trading enterprises, of which 15053 are still operating and 22,323 have been terminated. Most of the enterprises that have gone out of business in Dongguan are small and medium-sized enterprises based on Hong Kong and Taiwan companies. They are mostly concentrated in labor-intensive industries such as toys, shoes, plastics, hardware, and clothing. According to official data, in 2007 Dongguan closed 909 companies and 88 relocated companies, including 40 outside the city and 48 in the city. The total number of closures and relocations was less than 1,000, accounting for slightly more than 6% of the current processing trade enterprises in Dongguan. As far as non-governmental data is concerned, Ye Hongguang, president of the Frontier Business Association, told this reporter that the state's policy on processing trade has been frequently adjusted and the Labor Contract Law has been implemented, which has increased the cost of the business by approximately 5% to 7%. It is a Taiwan-funded enterprise. About 1,000 companies have already left or are planning to withdraw from Dongguan.

In this round of corporate transformation, commercial MPV markets dominated by corporate orders, as well as light trucks, mini-bread, and SUV markets have been directly hit. Sales of these models are closely linked to the development of the processing industry. When the processing industry enters the adjustment period, As a result, the company's orders have also been reduced, and the company's pre-column currency purchase psychology has increased. The reporter learned from the interview that sales of the above-mentioned models have fallen sharply in the near future.

Commercial vehicle sales encounter cold currents

In the field of commercial MPV, sales of JAC Refine, Dongfeng and Buick GL8 and Honda Odyssey accounted for nearly 80% of Dongguan's total market. The dealers of the above brands all stated that since December last year, commercial MPVs have appeared. Not busy season.

MPV is generally used to transfer company employees and ordinary guests. The main car buyers are medium and large enterprises, especially hardware, mold, clothing, footwear, electronics and other enterprises. "Generally speaking, from December onwards, some companies with surplus at the end of the year or companies planning to expand production in the coming year will purchase commercial MPVs, but since December 2007, commercial MPV sales have not risen significantly. The main reason is that due to various policies, the cost of processing companies has risen significantly. Some companies withdrew from Dongguan due to pressure or closed down. Some companies still wait and see, and they will not buy cars in the near future.” The dealer of own brand commercial MPV said in the interview. Since the end of last year, the sales of the brand have been declining. Especially in April this year, the sales volume has decreased by 30% from the previous month. The reporter learned that poor sales is also a difficult problem faced by other commercial MPV brands, even though dealers have Increased incentives, but because the target group does not have car demand, it is still unable to recover sales.

Over the past few years, commercial MPV sales have been relatively stable, with sales of about 5,500 vehicles per year basically. However, in the interview, all dealers believe that the market situation this year is very unsatisfactory, and sales volume can only reach about 70% of last year. About -80%.

For dealers selling light trucks, this year is also an extremely difficult year. Factors such as rising prices of raw materials, the National III standard, or implementation in July of this year have caused tremendous pressure on the industry. Many dealers expect the sales situation in the second half of the year to be unclear. Therefore, it is hoped that in the first half of the year, more measures will be taken to reduce the pressure. However, the start of February and March of this year was still satisfactory. JAC, Jiangling, Qingling and other major brand distributors still felt the sweetness of the peak season. Their sales performance was basically the same as last year, but since the end of March, the volume of each brand began. The number of store visits with customers has been significantly reduced. The reason is that unit purchases, which account for about 70% of light truck sales, have been significantly reduced. Many companies have taken a wait-and-see attitude, and the sluggish manufacturing industry has had a greater impact on the logistics industry, and the logistics industry is similarly It is a major customer of the light truck market and has become one of the major reasons why the light truck market is not booming in April.

SUV faces both sales and after sales pressure

At present, the main SUV models in Dongguan are mainly divided into two types, one is an economical SUV with both passenger and truck functions, such as Great Wall Haval and Ford Explorer, and the other is to be able to travel in the city. There are certain mid-range SUVs with certain performance, such as Dongfeng Honda CR-V, Dongfeng Yueda Kia Sportage and other models. The former is relatively affordable, and some products use an engine with a displacement of 2.0L or more, can carry heavier cargo, and are very suitable for small businesses that are at the start-up stage, and have become the transportation vehicles for many companies.

In Dongguan, the SUV market sales in the past few years basically remained at 2,000 to 3,000 cars, but the proportion of models has undergone great changes. In the past few years, the economical SUVs took on the role of the main sales model, but since the second half of last year, The sales of economical SUVs gradually decreased, and the mid-range SUVs continued to heat up, accounting for 60% of the SUVs.

In the interview, distributors of brands such as Great Wall, Landwind, and Changfeng Cheetah all told reporters that the SUV market is facing a grim situation this year. The sales volume in the first quarter decreased significantly year-on-year as compared with the same period last year. Among them, the SUV of a certain brand even fell by 60%. Great Wall and the Landwind brand Relevant person in charge told reporters that in the same model, the sales share of transport-type SUVs is decreasing, Great Wall Motor’s MPV Jiayu and Sedan’s sales have gradually increased since the listing, and Landwind’s former flagship product is SUVs. However, this year's sales of MPV style and sedan fashion accounted for about 70% of the brand. Judging from the current situation, the economic SUV sales this year are expected to decline by at least 20% to 30% year-on-year.

Dealers analyzed that the recent decline in sales continued to point out that the diesel oil shortage and the transformation of the manufacturing industry are two major factors. “But the impact of the diesel oil shortage is short-term. It only delays the consumer’s car purchase plan. Their Demand will be released sooner or later, and corporate transformation will be different. It will directly reduce consumers, and the impact will not be able to make up for it.” During the interview, relevant responsible person of the Landwind Automobile told reporters.

Minivan inventory increase

In the Dongguan market, minivans are popular with small business owners and self-employed buyers due to their low price and large cargo space. However, many dealers reported that in April this year, the current inventory pressure was somewhat higher due to the fact that this year The sales task is based on last year's sales volume. Last year's performance was too prominent, so this year's pressure is unusual. In the interview, two brands of dealers told reporters that sales in April fell by about 40% from March, and one of the micro-deal dealers with sales volume of nearly 7,000 vehicles last year sold only in the first quarter of the year. 1600 cars.

Regarding the reasons for this year's unsatisfactory sales of micro facets, one dealer considered that the main consumers of micro facets are low in risk resistance and have high liquidity. Therefore, in this round of corporate transformation, many small companies cannot bear the pressure. In the event of closure, the self-employed business of providing various raw materials for these companies is also affected. Of course, they will certainly not have a car purchase plan in the near future.

In addition, the current corporate transformation has also caused some of the original microcosmic drivers to switch to other cities, and the depreciation rate of micro facets is higher than that of ordinary cars. The frequency of secondary car purchase by micro face drivers is also more intensive than that of car owners. Leaving also led to the loss of second-time car buyers. Some dealers estimate that customers in this part of the year will be reduced by at least 20%.

In the interview, dealers said that if there is no such factor as corporate transformation, this year's micro-selling sales may be able to maintain last year's sales situation, because according to the municipal government introduced the governance policy, this year the township's governance area will be further expanded, This means that more motorcycle owners will upgrade their transportation tools.

Future outlook

Business transformation or opportunity


Vice-City of the City of Dongguan Chang Ling said that from the previous two years, Dongguan did have some companies relocated to Vietnam, Indonesia and other places, although these countries in the land and labor costs are much lower than the Pearl River Delta, but the company's comprehensive costs such as logistics As well as supporting and other recurring costs, the Pearl River Delta also occupies major advantages, especially for large companies.

A recent survey conducted by Dongguan in Hong Kong and Taiwan companies shows that most companies are unlikely to leave Dongguan in the next 3 to 5 years. At present, the official has also promised that the policy of suppressing processing trade will not be introduced in the next five years, which will increase the confidence of Dongguan enterprises. At the same time, Dongguan Foreign Trade and Economic Cooperation Bureau told reporters that Dongguan's foreign economic and trade work is changing from “inviting investment” to “inviting business intelligence”, with the main goal of introducing some IT companies and improving Dongguan's IT industry chain.

Taiwanese businessman Ye Hongdeng also believes that the Taiwanese-funded enterprises have a stronger tendency to take root in Dongguan than migration. He believes that China will certainly become the third largest economic entity in the world. It is a huge potential market and it is unreasonable to abandon the domestic market. At present, the industrial facilities in Vietnam and other places are still not perfect. Even if the company moves in the past, it will have to transport materials from Dongguan in the past, and the cost of logistics will also greatly increase. He said that in the process of industrial upgrading, there will be pain in the proper elimination of short-term, but in the long term it will help the entire nation. "I don't think that increasing the cost of 5% to 7% will cause the business to fail. If this can't be afforded, this kind of company shouldn't stop. Five years later, maybe the remaining Taiwanese companies will form very strong competition. force."

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