Exploration of parts and components industry at low growth rate in automobile market

Since entering the second half of the year, the overall automotive market in 2015 is just as some experts forecast in advance: there has been no slow growth or even zero growth. Even though the overall operation of the Chinese automobile market has not been able to use macroeconomic growth for quantitative assessments as early as a decade or more ago, especially in recent years, the restrictions on restrictions on purchases in some major cities have also exerted different degrees of influence on the auto market, making Markets that have already tended to be uncertain have created even more intricate and complex phenomena.

Parts Production Lathe
Parts Production Lathe

Under the multitude of market conditions, there is a related market that seems to be more certain. It can be said that this market is in a communal situation with the automotive market at all times. It is to provide a complete auto parts market for vehicle products. In general, in order to obtain the corresponding data support, the auto parts market is more difficult to find accurate business data than the entire vehicle company in terms of the whole or individual, but part of the part companies belonging to the listed company category are still found for the reporter. Some of the factors associated with the vehicle market provide convenience.

From the overall operating situation of auto parts enterprises above designated size released by the China Association of Automobile Manufacturers in the first half of 2015, the main business revenue increased by 8.17% year-on-year, total profit increased by 10.37% year-on-year, and fixed asset investment increased by 14.07% year-on-year. Overall, the auto parts industry should be slightly better than the overall auto market.

However, some of the components listed companies to see the breakdown of the state, in turn presents many differentiated features.

Heavy truck support companies are generally poor

Judging from Weichai's main engine business, in the first half of this year, due to the slowdown in macroeconomic growth, the fall in the growth rate of fixed asset investment, the sluggish manufacturing industry, and the implementation of the National IV emission standards to stimulate early consumption and other multiple factors As a result, the domestic heavy-duty truck market with Weichai Power's main equipment market continued to be sluggish, with sales falling sharply, with a year-on-year decline of 31.13%. Affected by this, Weichai Power sold a total of 64,900 heavy-duty engines in the first half of the year, a year-on-year drop of 61.5%. At the same time, Weichai Power has also been hit hard in the field of construction machinery. As the construction machinery industry continued the trend of operating at a low level last year, the sales in major market segments fell drastically. Welded diesel engines supporting Weichai Power had 17,300 units of 5-ton loader engines, down 48.5% year-on-year. In addition, Shaanxi Fast, a subsidiary of Weichai Power, sold a total of 229,300 transmissions, a year-on-year decline of 41.3%.

Under the background of the double-frustration of auto accessories and construction machinery and the sharp drop in sales performance, it is not entirely bad news for Weichai Power. For example, in the heavy-duty truck market with a total mass of over 14 tons, the occupancy of Weichai's engines still reached 22.0%, maintaining a leading position in the industry; the market share of engines supporting the 5-ton loader market reached 69.4%, an increase of 10.5 year-on-year. Percentage points continue to maintain its leading position in this field. At the same time, Fast's transmission products continue to maintain their dominance in the relevant sub-sectors.

Another company, Shanghai Diesel, which also produces heavy-duty diesel engines, also ushered in a difficult time for the company. In the first half of this year, Shanghai Diesel Engine Co., Ltd. sold a total of 28,657 diesel engines, a year-on-year decrease of 19.91%, and realized operating income of 1.159 billion yuan, a year-on-year decrease of 27.54%. In the first half of this year, affected by the year-on-year decrease in diesel engine sales, Shanghai Diesel International achieved a net profit of 60,770,900 yuan attributable to owners of the parent company, which was a decrease of 34.08% over the same period of the previous year, exceeding the decline in operating income.

Changchun One East, which is engaged in the production of clutches for commercial vehicles, was also affected by the deeper impact of the vehicle market in the first half of this year. In the first half of the year, the company realized operating income of 261 million yuan, a year-on-year decrease of 25.12%; operating profit of 12.7203 million yuan, a substantial drop of 57.86% year-on-year. The reason for this is that the overall domestic commercial vehicle volume dropped by 14.86% year-on-year in the first half of the year, which is a big factor. With regard to the clutch of the main product of Changchun Idong, the current major market is still in the heavy truck sector. Therefore, like the two engine companies mentioned above, the market has been greatly affected. In addition, according to analysis by Changchun East, the company's product development cycle has also affected the rapid formation of new product sales revenue.

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