Lost two years of profits in 11 months, motorcycle dealers said they were "squeezed at both ends" Young people's big toys are not easy to sell?
Reporter: Huang Xinlei Editor: Dong Xingsheng
Recently, Lao Sun, a motorcycle dealer in a new first-tier city, was very worried, his motorcycle business has been losing money for 11 months in a row, and he has taken all the money he earned in the previous two years.
Lao Sun's troubles are also the epitome of the continuous decline in sales of the domestic motorcycle industry in the past year. According to the data of the China Motorcycle Chamber of Commerce, from January to October this year, the production and sales of motorcycles were 16.5374 million and 16.1959 million respectively, a year-on-year decrease of 9.17% and 11.81%. Among them, the production and sales of large-displacement recreational motorcycles (displacement > 250cc) were 436,900 and 451,100, down 11.2% and 9.85% year-on-year.
However, from the perspective of the head manufacturers, their lives are quite moist. According to Loncin General (603766. SH, share price 5.35 yuan, market value 10.986 billion yuan) In the third quarter of 2023, the company's motorcycle business achieved operating income of 6.686 billion yuan in the first three quarters, a year-on-year increase of 12.35%. Among them, the company's self-owned brand revenue was further improved, and Wuji VOGE achieved sales revenue of 1.068 billion yuan, a year-on-year increase of 43.42%. Among the independent brands, the domestic sales revenue was 583 million yuan, a year-on-year increase of 16.79%, and the export revenue was 485 million yuan, a year-on-year increase of 97.57%.
It is worth noting that the market winter encountered by imported motorcycles in the past year has been more "cold". Li Bin, executive vice president of the China Motorcycle Chamber of Commerce, told the "Daily Economic News" reporter that many internationally renowned motorcycle brands have reduced their prices significantly, among which the price of a certain product of Ducati has been reduced by 50%.
Strange circle: the more the price is reduced, the more it cannot be sold
Some say it's "the first vehicle on the surface", while others say it's "a big toy for young people". In recent years, with the rapid development of the economy and the improvement of people's living standards, motorcycles, as a convenient means of transportation, have been favored by more and more consumers.
Image source: Photo by reporter Zhang Jian (data map)
According to the China Motorcycle Chamber of Commerce, in 2022, the national sales of motorcycles will reach 21.42 million units, and the number of ownership will reach 80.72 million units, a year-on-year increase of 6.79%. Among them, the production and sales of large-displacement recreational motorcycles (displacement > 250cc) reached 551,100 and 553,400, a year-on-year increase of 47.51% and 44.68%.
However, entering 2023, the motorcycle industry is starting to chill. Mr. Sun said that in January this year, he did not go to the store for more than 10 days because he was unwell. After returning to the store after the illness, the business was not good, and then it was a "mess", only more than 300 vehicles were sold in more than ten months, and the sales fell by 70%, even in the traditional peak season, "bald heads" are normal.
Bald, it means that none of them were sold that day.
What makes Lao Sun even more chilling is the customer's offer. He casually pointed to a motorcycle and said to reporters: "The official guide price of this car is 33,999 yuan, almost 34,000 yuan, do you know what a customer said that day? He said, 'Boss, is it not sold for 15,000?' I said at the time, 'It won't be sold if it rots!'"
Lao Sun admits that he is angry, because in his shop, more than 60% of the motorcycles this year were sold at a loss. It is not surprising that a motorcycle priced at 20,000 or 30,000 yuan has been reduced in price, and there are quite a few discounts. Lao Sun told his employees that he had to sell the car within three months, otherwise he would lose money. And five or six years ago, a similar motorcycle would not have lost money for a year.
In fact, in order to reduce inventory, in the first half of this year, many motorcycle brands also launched price reduction promotions. Such as Qianjiang motorcycle (000913. SZ, share price 12.69 yuan, market value 6.69 billion yuan) under the Sai 600 Liangjian version price reduction of 10,000 yuan, Chunfeng Power (603129.SH, stock price 86.77 yuan, market value 13.055 billion yuan) on the official website "scatter coupons", with 9 yuan to buy coupons, up to 7,000 yuan can be deducted...
And the price of imported motorcycles has been cut even harder. According to Lao Sun, the prices of Honda, BMW, Harley, Ducati and other international big-name motorcycles have been "cut in half", and the Ducati big devil that used to cost more than 200,000 yuan now only costs 1230,000 yuan, not to mention second-hand cars, 50,000 yuan can buy Ducati. "Even international brands are now bent over the market. ”
Image source: Picture of each classic
However, at a time when the price of motorcycles has dropped sharply, the "waiting party" still exists, especially young people who play large-displacement motorcycles.
In this regard, Li Bin said that the cold sales of motorcycles are not a problem of the industry itself, but are affected by the economic environment and the price reduction of automobiles. On the one hand, Dongfeng Citroen's discounted sales at the beginning of this year drove the price of domestic cars and affected motorcycle sales; on the other hand, some consumers had a shortage of funds and postponed their car purchase schedules.
Recovery: Top manufacturers are looking overseas
As a distributor, Lao Sun feels that part of his troubles come from manufacturers. Because in order to ensure cash flow, while constantly reducing the price of sales, the purchase price from domestic manufacturers has not dropped much, even if these brand motorcycles have started a "price war" on the official website.
According to Lao Sun, taking a certain motorcycle as an example, the company's official website took the initiative to reduce the price by 2,000 yuan, but in fact, when he went to purchase, the manufacturer would only reduce the price by 1,500 yuan on the original basis, that is, he personally had to bear a loss of 500 yuan. "Businesses are also holding on because we don't have sales. ”
According to the statistics of the China Motorcycle Chamber of Commerce, from January to September this year, motorcycle manufacturers achieved operating income of 97.689 billion yuan, a year-on-year decrease of 1.32%, a total profit of 7.586 billion yuan, an increase of 23.26% year-on-year, and a total profit and tax of 9.829 billion yuan, an increase of 17.32% year-on-year. Among them, the top 10 enterprises (groups) in fuel motorcycle sales are Dachangjiang, Loncin, Zongshen, New Continent Honda, Luoyang North, Wuyang-Honda, Guangdong Daye, Chongqing Yinxiang, Guangzhou Universiade, and Qingqi Suzuki.
Taking Loncin GM, which ranked second, as an example, according to its third quarter report in 2023, in the first three quarters of this year, the company achieved operating income of 9.364 billion yuan, a year-on-year decrease of 1.46%, and the decline was further narrowed. Among them, the sales revenue of the main business of "motorcycle + general machine" was 8.804 billion yuan, accounting for 94.02%, and the net profit attributable to the parent company was 791 million yuan, a year-on-year decrease of 0.41%.
Image source: Screenshot of the financial report
In this regard, a staff member of Loncin General Securities Department said that from the perspective of the industry as a whole, the production and sales of motorcycles are in a declining stage, but the export business still maintains a growth trend. At the company level, because the company's export share is large, and this year's large-displacement motorcycle "Wuji" has launched a lot of new products, contributing to the sales increase since the second quarter, making the company's performance better than the industry average.
According to the data of the China Motorcycle Chamber of Commerce, from January to October this year, the export volume of motorcycles in China was 6.8357 million, a year-on-year increase of 5.39%, and the export value was 4.537 billion US dollars, a year-on-year increase of 0.11%. In the first three quarters, Loncin GM's motorcycle business achieved operating income of 6.686 billion yuan, a year-on-year increase of 12.35%. Among them, the export of self-owned brand Wuji VOGE reached 485 million yuan, a year-on-year increase of 97.57%.
Li Bin said that since October this year, the sales of fuel motorcycles have returned to positive growth, and in terms of exports, affected by the low base in the same period last year, they have maintained significant year-on-year growth.
Future: Will the industry enter the era of low profits?
When will the motorcycle industry get out of the "cold winter"? There are those who are confused, and there are also those who are determined.
Lao Sun simply calculated the accounts, and he had already made all the profits of the previous two years this year. "I don't know how long I can hold on, maybe another year. I have been in this industry for so long, supported by hobbies and interests, but from the perspective of pure capital, in terms of profits from the motorcycle industry, it is not suitable for investment. ”
In fact, for large-displacement motorcycles, dealers represented by car dealers and repair shops have very small profits. According to Lao Sun, the price of most domestically produced cars is 20,000 yuan to 50,000 yuan, and the profit margin is about 7 percent, while the price of imported cars is more than 100,000 yuan to 300,000 yuan, but the profit margin is even lower, about 5 percent. On the contrary, the profit margin of small-displacement motorcycles is high, especially second-hand cars, which may be 3,000 yuan to eat and 5,000 yuan to sell.
Image source: Photo by reporter Tan Yuhan
There are also after-sales service links with higher profits, such as maintenance, parts replacement, etc. At the end of November, Li Liang (pseudonym), a motorcycle dealer also located in a new first-tier city, told reporters that he has two stores and is currently focusing on the shops that operate small-displacement motorcycles. "Due to the price adjustment of the whole motorcycle industry, the overall revenue this year has fallen by 20%-30%, and now daily maintenance is the source of income. ”
However, the reporter learned that the maintenance cost of the motorcycle is not much, and the cost of a maintenance fee ranges from tens of yuan to several hundred yuan, at most twice a year.
"Many motorcycles are sent for maintenance not because of wear and tear, but the shelf life of consumables such as engine oil has arrived, and some motorcycles may only drive 500 kilometers a year; Lao Sun said.
On the other hand, rent is the bulk of the cost, as most of the store is used for motorcycles. According to Lao Sun, his store has thousands of square meters and annual rent of millions of yuan, and due to the slump in business this year, he is recently negotiating with the landlord to reduce rent and reduce parking fees, "but the landlord refuses to reduce the rent."
"This year, your peers don't meet to ask you how much you've earned, but how much you've lost. Lao Sun believes that even if the future recovers, the motorcycle industry will enter an era of low profits.
In this regard, Li Bin said that the profits of motorcycle dealers are declining, but there are very few exits, and most of them are still persistent, this is because practitioners are confident in China's economic recovery. He expects the motorcycle market to return to growth by mid-2024 as the world economy recovers.
"Recently, domestic motorcycle manufacturers have developed many new products, and after they are introduced to the market next year, the price of motorcycles will slowly recover, but it will not return to the original before the price reduction. On the other hand, in the coming period, the total volume of motorcycles will continue to grow, but the share of imported motorcycles will gradually decline. Li Bin analyzed.
National Business Daily