What is the prospect of automobile manufacturing?

Compared with the overall manufacturing capacity of China, the scale of listed automobile manufacturers in China is dwarfed at present. Most of them rely on foreign capital. This situation is slowly changing. Joint venture partners, including Nissan and Honda's Dongfeng Motor, plan to raise $590 million through the capital market next month. First Automotive Works, the largest automaker in China and a partner of German Volkswagen, is also considering listing, but its timetable is much more flexible.

The prospect of more car companies going public seems as unattractive as the traffic congestion in Shanghai. No matter domestic or foreign automobile manufacturers, the sales growth rate in China has dropped sharply this year. This has triggered a downward adjustment in prices, while the prices of raw materials are rising. In the first half of this year, the industry profit fell by 50%, and the net profit rate fell to only 5%.

But there are still some bright spots. The interim profit of Denway Motors, one of the earliest listed automakers, increased by 7%. Recently, Wei Jun Auto's friendly acquisition of the assets of its state-owned parent company has expanded its development space. Its parent company is a parts supplier, supplying local parts to Japanese companies. At the same time, it is reported that the China municipal government is planning to implement tax incentives for energy-saving cars.

However, the overall outlook for the industry remains bleak.