Cui Dongshu, Secretary General of the China Passenger Car Association (CPCA), wrote in an article that auto production in China reached 10.12 million units in 1-4M25 under the stimulus of the vehicle replacement and upgrade subsidy policy, marking a YoY increase of 11%.

Meanwhile, the auto industry's revenue climbed by 7% YoY to RMB3.26 trillion, costs hiked by 8% YoY to RMB2.86 trillion, and profits fell by 5.1% YoY to RMB132.6 billion. The industry's profit margin stood at 4.1%, which remained low compared to the average profit margin of 5.6% for downstream industrial enterprises.

As auto production scaled up, Cui pointed out that carmakers' profits suffered from a sustained drop as a result of declined PPI, decreased upstream lithium carbonate costs, and carmakers' reluctance to produce their own batteries.

Combined with the downside trend in profit margins over the past few years, the recent decline in auto industry profits remained significant, Cui added. Mainstream carmakers will be facing sharply escalating profit pressures with the clear price advantage of new energy vehicles under supportive policies.
~



AAStocks Financial News
Web Site: www.aastocks.com

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