Will China’s car market repeat the mistakes of the real estate industry? For now, this moment will not come so soon.
However, with regard to the impact of severe market shocks, there is no doubt that China’s auto market is already in a sub-healthy state.
In the past six months, “the whole industry has complained bitterly” is seen by the outside world.
And for everyone in the industry, the pain caused by rapid changes in the market is also so deep in the bone marrow.
It is difficult to say the word “easy” in almost all related sectors, from the supply chain to the mainframe factory, from the post-market to the car dealership.
Looking back on the past 20 years, China’s auto market has experienced several industry storms, but no matter how you look at it, no one has swept the whole industry like it is today.
While Guanghui Automobile, which has been standing in the leading position of car dealers in China, is on the verge of delisting step by step.
The kind of powerlessness for the future development of the 4S store model arises spontaneously.
At present, Guanghui Motor fell by its daily limit and its share price closed at 0.
87 yuan, which has closed below 1 yuan for 19 consecutive trading days.
If calculated on this basis, when its share price cannot return to 1 yuan on the last day, or it will be delisted because the closing price is less than 1 yuan for 20 consecutive trading days.
At that time, this not only means that Guanghui Automobile will become the company with the highest market capitalization when delisting at face value in history.
It will also send a new signal to the market that China’s car market is changing faster than expected.
The profit situation of the 4s store is worrying, which may bring a chain reaction.
As a part of the industrial chain, I can’t bear to imagine what the outcome will be if it is broken.
Since the beginning of the year, the car market has been shrouded in a tense atmosphere.
You can say that all this is caused by the rapid infiltration of electrification.
New entrants eat into the original market share of traditional car companies, and the deep change in consumption trend makes enterprises accustomed to step-by-step development unable to find the north.
In addition, the downturn in car consumption caused by the general environmental downturn has brought the market into a downward phase from the source.
But what can you do in the face of this cruel reality? For example, for the past of Guanghui Automobile, don’t use such gorgeous words to describe its brilliance.
Now, just because of the great changes in the market, the reality will kill you.
Guanghui has no means to get through this extraordinary period calmly except bear to accept it.
Indeed, after more than 20 years of struggling in the industry, the highlight belonging to Guanghui Automobile is so obvious.
In June 2015, Guanghui Motors landed in the A-share market, and the following year it acquired BMW’s largest dealer in China, Baoxin Automobile, and changed its name to Guanghui Baoxin.
Guanghui Automobile has become China’s leading passenger car distribution and service group.
China’s largest luxury passenger car distribution and service group, China’s leading used car distribution and trading agency entity group, the largest financial leasing provider among passenger car dealers.
Even by 2023, Guanghui Motor had an operating income of about 137.
998 billion yuan and sold 595700 new cars.
In terms of channels, the company has also established a national automobile distribution network covering 28 provinces, autonomous regions and municipalities directly under the Central Government, operating a total of 735 outlets, including 695 4S stores.
Presumably, all these are proving to the outside world that Guanghui Automobile’s huge base industry has the demeanor of a leader in the industry.
On the other hand, as the company’s share price has continued to weaken since 2018, it has hovered below 3 yuan in 2022, fell below 2 yuan at the end of 2023, and is now on the verge of delisting.
All I can say is that for asset-heavy car dealers, the glossy surface is still too fragile.
As early as 2022, in view of the rapid decline of Guanghui Motor, there was a view that it was the rapid change in the environment that made its whole business difficult.
When the original 4S store model turned to direct marketing, the rapid loss of consumers hit new car sales hard.
The arrival of electric cars has led to cracks in the after-sales system.
Guanghui Automobile, which is slow and hot, has not come up with more effective buffers, which is the key factor causing the predicament of survival, in addition to relying on the accumulation in the past to get through this special period.
To tell you the truth, according to the 2023 national survey on the living conditions of automobile dealers released by the China Automobile Circulation Association, more than 70% of the dealers failed to meet their annual targets, with losses accounting for 43.
5% and profits accounting for only 37.6%. We know very well that in the past two years, not only Guanghui cars, but also car dealers have had a difficult time.
From the news of the bankruptcy of Zhejiang Zhongtong Group at the beginning of last year, the closure of all its 19 4S stores, to the delisting of the shares of the huge Group in the middle of the year, and the termination of the listing of the company’s shares, and from the serious crisis encountered in the operation of Guangdong Yongao Investment Group Co., Ltd. at the beginning of this year, to the sudden collapse of Sinfeng Group, the largest car dealer in Yancheng, Jiangsu Province, more than 60 4S stores involving 25 brands were instantly closed.
These troubles in the auto industry are so gory to tell everyone that the development of China’s car market is pushing car dealers into dark times step by step.
Next, Guanghui Motor still has a chance to turn around? In this regard, I believe that no one can answer.
According to its performance forecast for the first half of 2024, the main reason for the expected net loss of RMB 583-699 million is still attributed to the intensification of competition in the industry and the price war among major car companies to seize market share, which has had an impact on the company’s new car sales.
or the one-time loss in dealing with non-performing assets is too huge.
This has clearly told everyone that in the face of what is happening in the current market, no matter how powerful the dealer can no longer give himself a large amount of blood transfusion.
Well, maybe times have really changed! Whether or not everyone has nothing to eat because of the intensification of the price war, the result of development based on the inherent mode of survival has been placed in front of us.
Therefore, Guanghui Automobile will not be the last auto distribution group to be hit hard, and its misfortune will only be another microcosm of the urgent transformation of the entire auto sales industry.
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