China's heavy truck industry
1. In recent years, China's heavy-duty truck companies have mostly sold "heroes". They often use the "market share" pattern and like to do "big". Whether it is profitable or not, whether or not it can create more "net profit" is to retreat from it.
2. Over the years, overloading has led to an abnormal development in the Chinese truck industry. Competitors in China's heavy truck industry are not products or other core competition between heavy truck companies. Instead, they have formed “competitive vehicles (now renamed as low-speed trucks) competing light trucks. The malformed competitive situation of the card in the competition for light trucks and the competition for heavy trucks in the medium-duty trucks has forced the prices of corporate products to continue to decline and the overall industry profits have continued to decline.
3. China's heavy-duty truck industry is in the era of “Spring and Autumn and Warring States†competition. There are more than 23 heavy-duty truck manufacturing companies nationwide. The annual market demand is quantitative, and 23 companies continue to use the cost advantages of enterprises to lower their prices and gain their share.
4. The “homogeneity†of Chinese heavy truck companies’ products is becoming more apparent, and differentiation is relatively insufficient. Market competition can only fight prices and fight services, and these two items are at the expense of “profitsâ€.
5. China's heavy truck companies are relatively few listed companies and do not need to be responsible for "shareholders". They only need to be responsible for the "superior" of their positions. The long-formed "profit" concept is relatively weak, and ultimately results in a result: Leaders mainly value sales revenue, and government leaders look at taxes.
When the price of iron ore rose by 65% ​​in 2008, how heavy the impact on the heavy truck industry was, but it was found that the heavy truck industry was facing a serious decline in “profitabilityâ€, and the industry’s profit rate may be “3%â€. This is not an alarmist. ".
The "butterfly effect" of iron ore price increase
In a speech by the American Association for the Advancement of Science in Washington in December 1963, Lorenz stated that a butterfly flaps its wings in Brazil and may cause a tornado in Texas in the United States. This is where the "butterfly effect" comes from.
Since Brazil’s “Butterfly†has affected the “Tornado†in the United States, can Brazil’s “Iron Ore†cause China’s “heavy truck industry� On February 22nd, 2008, it participated in the international iron ore price as a representative of Chinese steel companies. The negotiation of Baosteel Group Co., Ltd. announced that with the world’s largest iron ore production and exporter, Brazil’s CVRD, the 2008 iron ore benchmark price reached a base increase of 65% in 2007.
Steel "water goes up from height"
Three-quarter increase in Baosteel's steel price from China's leading steel company Unit: RMB/ton
Baoshan Iron & Steel Co., Ltd. is China's largest and most modern steel complex. The “World Steel Industry Guide†assesses Baosteel’s overall competitiveness in the world steel industry as the top three, and considers it to be the steel company with the most potential for development in the future. In November 2007, Baosteel announced the first quarter of 2008 steel price adjustment program: hot-rolled pickling, bell zinc rose 100 yuan / ton, including hot pickling rose 2.18%; billet, electroplating tin, general cold products, rolling Hard rolls rose 200 yuan/ton, Cape Cold products rose about 4.26% quarter-on-quarter; wire, hot-rolled, hot-dip galvanized prices rose 300 yuan/ton, of which hot-rolled and hot-dip galvanized steel rose 8.02% and 5.79% respectively; Steel prices rose 250 yuan/ton, of which high-efficiency products were further increased by 150 yuan/ton, more than 4% month-on-month. The price of wide and heavy bases increased by 500 yuan/ton, of which, the price of ships increased by 100 yuan/ton, and the chain increased by 9.35%.
On February 25, 2008, Baosteel issued a steel price adjustment plan for the second quarter: the price of all types of steel products has generally been raised. Baosteel's price adjustment has covered the rise of raw material costs such as iron ore. According to Baosteel's price adjustment notice, its billet rose by 600 yuan/ton, wire rod rose by 600 yuan/ton, hot rolled up by 500~800 yuan/ton, hot-rolled acid. Washed up 600-700 yuan / ton, rolled hard rolls rose 700 yuan / ton, ordinary cold rolled up 800 yuan / ton. Among them, the hot dip galvanized products rose the highest, an increase of 1,000 yuan / ton, electro-galvanized rose 700 yuan / ton, Cai Tu rose 500 to 700 yuan / ton, wide and thick plate rose 800 yuan / ton, electrical steel rose 600 yuan / ton, Electroplating tin rose 500 yuan / ton, the adjusted price does not include tax, and effective on the same day.
Heavy truck manufacturing steel
According to an official from the China Association of Automobile Manufacturers, based on the forecasted number of vehicle production and holdings in 2008-2020, the steel composition of automobiles and the localization of some components and assemblies will be forecasted. In 2008, the demand for automotive steel products was 13.71 million tons. The annual production was 15.1 million tons, which was 16.37 million tons in 2010, 21.76 million tons in 2015, and 27.67 million tons in 2020, which is twice the demand for this year. From an automotive construction perspective, 50% to 60% consist of steel, and 12% to 15% consist of cast iron. From this year's perspective, the output of automobiles will reach 10 million vehicles, with a growth rate of 12.61%, including 7.3 million passenger vehicles and 2.74 million commercial vehicles, with growth rates of 14.42% and 8%, respectively.
The steel products used in automobile manufacturing include steel profiles, medium plates, thin plates, steel strips, high-quality steel products, and steel pipes, among which are mainly thin plates and high-quality steel. Among them, the hot-rolled middle plate is mainly used for longitudinal beams, crossbeams, carriage beams, wheel spokes, rolling wheel rims, spokes of passenger cars, etc.; Among them, there are a relatively large number of steels for dump trucks, and the amount of steel used for heavy trucks (including tractors and cars) for bicycles is 6 to 19 tons, of which cold, hot-rolled plates and high-quality steel account for the largest proportion. Therefore, the increase in steel prices has a significant impact on heavy trucks.
Reports of listed companies in the heavy truck industry show that the profitability of the first quarter has declined significantly
According to the quarterly reports of some listed companies in China's heavy truck industry in the first quarter of 2008, the company has gained insight into the growth of the revenue of China's heavy truck industry. “China Heavy Duty Truck†China's heavy-duty truck industry ranked first in 2007 and ranked second in the first quarter of 2008. Its scope of business: manufacturing and sales of trucks, special-purpose vehicles, heavy-duty special-purpose vehicles chassis, auto parts; car modification, machining; licensing General cargo transportation, logistics services, warehousing services within the approved scope, import and export business, sales of paints, lubricants, brake fluids, and steering oils for vehicles.
On April 21, 2008, China National Heavy Duty Truck announced its first quarterly report for 2008. Its main business income was 4.7 billion yuan, an increase of 40.59% year-on-year (3.35 billion yuan); main business profit was 500 million yuan, 456 million yuan year-on-year Yuan) increased by 11.1; total profit was 154 million yuan, an increase of 21.32% year-on-year (127 million yuan).
The data shows that income growth is “40%†and gross profit only increases by “10%â€. Based on the above data, in the first quarter of 2007, the gross margin of Sinotruk's sales was 13.61%; in the first quarter of 2008, the gross profit margin was 10.76%. In the first quarter of 2007, the sales margin of Sinotruk was 3.8%. In the first quarter of 2008, the profit rate was 3.28%. This shows that the gross profit margin decreased by 26.94% and the profit rate decreased by 13.68%.
Foton Motors ranked fifth in China's heavy truck industry, the 2067 annual report, in which the heavy truck business revenue was 10.785 billion yuan, an increase of 87.73% year-on-year (5.745 billion yuan); the main business profit was 853.267 million yuan, and the gross margin was 7.91%. The 2008 quarterly heavy truck data performance is unknown. In short, in 2008, the heavy truck market, regardless of users, has entered a meager stage, with the trend of the trend of steel price increases. Weakening the sharp rise of the heavy truck market in 2008 should be a foregone conclusion. The overall industry net profit margin for heavy trucks can be maintained at 3%, and it remains to be seen.
See related topics: up! rise! ! rise! ! ! Iron ore price tracking
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