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Haima Automobile The death knell has sounded for traditional small and medium-sized automobile companies!

By BONO

Listed companies in Hainan are generally not doing well.

Last time we talked about Hainan Haiyao, this time we look at a car company, Haima.

This company has been working in the industry for 30 years, unexpectedly, the industry peaked in 2017, and lost more than 2 billion dollars in two years, almost losing the company's accumulated profits in the first 30 years.

Hard work for decades, overnight back to the liberation front. This ability to lose money, catching up with those burning money Internet companies.

Is it an inside job, like Haiyao? Or is it something else?

Inherent weaknesses There is no birth certificate at birth

On April 13, 1988, the State Council abolished the Hainan Administrative Region of Guangdong Province and set up Hainan Province and the Hainan Special Economic Zone, which had just been established, and the Hainan government wanted to develop its own automotive manufacturing industry.

At that time, the political turmoil in the Philippines, Hainan Automotive Stamping Plant from the hands of the former President of the Philippines purchased the former President Marcos personal automobile factory, in order to restore the construction of the way the whole relocated to Haikou Jinyuan Industrial Park, stamping plant renamed Hainan Automotive Manufacturing Plant.

Coincidentally, in 1990, Mazda was in the midst of a crisis and was eager to find new profit margins. At that time, the president of Mazda was in Hainan to participate in activities, was arranged to go to Hainan Automobile stamping plant visit.

From 1969 onwards, Mazda and Ford to carry out cooperation, Mazda's president recognized that Haikou used Ford's production line. Loved ones to see each other, because of coincidence, because of complementary, the two sides quickly reached *** knowledge, 1992 *** with the formation of Hainan Mazda Automobile Company, in which Mazda took out the full set of molds, fixtures HMC6470 station wagon as a capital contribution to the Japanese side accounted for 25% of the shares.

In 1993, Hainan Auto began assembling and producing the HMC6440, which originated from Mazda's first-generation mpv, and in 1994, began production of the old 323.

The production was produced, and in just a few years, a number of models were put into production.

Unfortunately, congenital deficiencies, the mother did not treat. Haiqi did not have a "birth certificate" - did not obtain a state-issued car production license, the production of cars can only be in the province of Hainan Province.

The joint venture did not run for long, was ordered to suspend, because the plan was to set up a joint venture in the south of the commercial vehicle-based joint venture, hope that the joint venture object first Chrysler, and then Mercedes-Benz.

However, Mercedes-Benz first put forward, Mazda can not be joint venture with Hainan Automotive Stamping Plant conditions, and later on a number of calculations, that the commercial vehicle market is limited, and the joint venture investment or up to tens of billions of dollars, so ultimately chose to give up. Mazda was counted by the peers, by the policy stuck in the neck.

At that time, the population of Hainan province is not enough to catch up with the city of Guangzhou, the demand for cars is insufficient to increase production, high costs. 1997, the sea automobile on the verge of bankruptcy.

Everything, in order to get a license.

In order to obtain the qualification of the production of cars and the necessary funds, the Hainan Provincial Government agreed that the factory is attached to the name of a large state-owned automobile enterprises. November 1997, **** and the country's eldest son of FAW came. The two sides to state-owned assets gratuitous transfer of the way to achieve asset reorganization, the establishment of FAW Group 100% holding FAW Hainan Automobile Company Limited, the company as an important production base of FAW Group in South China, formally incorporated into the FAW Group, was incorporated into a unified plate.

Black households, finally have a household.

Both sides have their own interests, Changchun and Hainan have their own interests. 2001, FAW Hainan listed small MPV Mazda Prima, FAW wants to bring this product to Changchun production, Hainan did not promise.

In July 2002, Haiqi Group began production of Mazda 323-based Formica, FAW also hope that a car dual-use, still failed.

In order to comfort FAW, Mazda gave FAW Mazda6 national property rights. in April 2003, Ma6 officially launched in China, which is China's first synchronized with the international market launch of the B-class car, and later, there is the FAW Pentium sedan on the same platform as the Mazda6.

Mazda also has an agenda for FAW, which is a huge sales network.

FAW Hainan and FAW Sedan, although both hung with the "FAW" prefix, essentially two companies, one is the eldest son of a huge sales channels, networks, production capacity, Mazda wants to merge the network, the use of FAW Sedan's network to achieve the maximization of production and sales.

In 2004, FAW, Haika and Hainan government reorganization structure, the formation of "FAW Haima Automobile Company Limited", FAW, Haika and the Hainan Provincial Government shareholding ratio of 49%, 49%, 2% respectively. It was agreed that within two years of the establishment of FAW Haima, FAW and HASCO would repurchase the 2% held by the Hainan Provincial Government.

Soon, Mazda asked FAW Haima and FAW car sales rights, unified and merged into the FAW Mazda Automobile Sales Company, FAW Haima only accounted for a small portion of the stake in which the FAW Haima asked to give up the right to purchase, the right to localization.

Haiqi angry, the two sides a two-shot. 2006 the end of the two sides of the expiration of the cooperation, FAW Haima no longer have the right to use the Mazda brand.

Two models of hot sales to Mazda has a greater ambition, Mazda threw the olive branch to the strength of the more powerful FAW and Changan, high-level models Mazda6 in the FAW sedan production, the replacement model of the Formosa put in Chongqing and the same platform of the Focus **** line production.

Haima, once again encountered no new car bottleneck.

It can be said that this is a company that is inherently weak and full of ups and downs.

Too weak to grow independently after being abandoned

In 2006, without Mazda's thigh, the company opened the road to independence.

That's when it realized that there was nothing to want. Because since its inception in 88 years, the company has been using the approach of fetishism, factories and models are other people's, only manufacturing capacity, no R & D capability, Hainan, the lack of local technical personnel to support the lack of industrial base.

This drawback is evident in the company's future development, the good times, the main model monthly sales can be more than 10,000, but the appearance has always been highly similar to Mazda, suffered accusations. And none of the company's independently designed models have been recognized by the market.

After the independent development, the company did not get rid of the psychological dependence on Mazda, has been eating the old capital, that Haima is a copycat low Mazda, is not too much.

The company's decision-making level is not resolute, in the automotive industry's great development period, missed the golden three years.

In February 2007, Haima Investment Group Co., Ltd. wholly acquired Zhengzhou Light Automobile Manufacturing Plant located in Zhongmou County, Henan Province through asset reorganization.

Haima, which is located in a remote area, decided to establish a larger production base in the hinterland of the Central Plains, with a design capacity of 300,000 vehicles, much higher than the Haikou plant.

With a big appetite and little digestive capacity, the company moved so slowly that the new base went into production three years later.Today in 2019, Tesla went from acquiring land in Shanghai to a new car coming off the production line in just one year.

It is important to realize that after 2007, China's auto industry entered an explosive period, and in each of those golden three years, rivals grew rapidly.

Chengcheng Automobile prospectus disclosure, from 2008 to 2010, the company's SUV sales were about 44,000, 58,000, 137,000, a compound growth rate of 76.5%. 2010, the company's SUV market share of 11.3%, to re-emerge as the country's first SUV sales.

In 2008, 2009, and 2010, Great Wall Automobile's sales were about 120,000, 210,000, and 360,000 respectively, with a compound growth rate of about 74%, which basically stabilized its position in the market.

360,000 volume, significant! This is almost the full year sales of a second-tier joint venture brand. This volume is enough to support a national sales network. As long as Great Wall Auto is steady and stable, the probability of going out is very small.

The automotive industry has its own peculiarities, heavy technology, heavy assets, and high sunk costs of R&D.

First of all, the automotive industry has its own peculiarities, heavy technology, and heavy assets.

First of all, R&D costs. The automotive industry's research and development costs are very high, the Haima 3, for example, spent 42 months, invested 495 million, listed in 2013 so far sold a total of 180,000 units, the average car R & D costs 2777 yuan.

The Great Wall Harvard H6, listed in 2013, has sold more than 2 million units since then, assuming the same R&D costs, the H6 single-vehicle share of the R&D costs of roughly only 200 yuan.

Haima Automobile in recent years, the profit of a single car has been about 1,000 yuan, the Great Wall Automobile is 5,000 yuan. The difference is 4,000 yuan. And joint venture brands can reach 8,000 yuan in profit per car.

Suppose, the same level of products, the Great Wall car choose to reduce the price of 1,000 yuan, Haima car follow up to reduce the price of 1,000 yuan, so that the Great Wall car profit to 4,000, Haima profit is zero.

In front of heavy capital, small = weak = perish.

From 2007 to 2017, the automotive industry is developing greatly, and it is rare to see loss-making car companies. But after the industry peaked in 2017, within a year, small car companies all died overnight, none of them were spared.1,000 yuan of single-car profit means that the net interest rate on sales is less than 2%.

When the industry sales slowed down, the joint venture car companies launched low-priced models sinking style to compete for the market, Geely, Great Wall, such as the independent leader of the two sides of the attack, below 80,000 models to grab, the middle and high end also want to grab, the Link and Wei launched one after another.

Sales, more than just the cost, but also the dealer network.

Almost all of China's automotive industry to take the 4S store approach, generally a single store can only operate a brand. Models to be more, sales to reach a certain scale, dealers are willing to invest money for you to build stores. Construction of a 4S store, the initial investment of at least a few million, a few small models, it is unlikely that a dealer is willing to take over.

Why do domestic auto companies want to launch high-end brands? It's about survival.

We have also seen that the average profit and joint venture brand profit difference of nearly half, if the industry did not warm up from the winter, by the time the car profit did not improve, the next batch of dead is the Great Wall and Geely.

Take a look at the inventory data of the automotive industry in recent years.

The two highest spikes in the graph are the point at which the auto industry's incentives were withdrawn.

In 2017, the purchase tax incentives completely withdrawn, the inventory coefficient ratio of independent brands and joint venture brands is close to 1.8, and then quickly fell to 0.8, this is a process of independent brand inventory backlog and price cuts and dumping, during which the small car enterprises all fell during this time.

In 2017, Haima Automobile made its first huge loss, a year in which the national car sales declined only slightly year-on-year. It shows that Haima Auto is not competitive among domestic brands, either.

Companies know best about their own operations, and I believe that in 2016, when the industry had not yet seen the top, the company had already foreseen how much pressure the company would face after the purchase tax incentives were withdrawn. This year, there are dealers in the loss, Haima promised rebates delayed realization, to 2017, a large number of dealers can not carry the first withdrawn.

So far, the Haima automobile crisis is completely unresolved.

After two years of huge losses, in 2019, Haima Automobile fell to the extent of selling houses to protect the shell, most of the houses sold are staff quarters. Recently, the company has set up a transformation office, the market rumors that the company is ready to exit the automotive industry.

Why two years can lose 30 years of profit? Live and let live

In 2017, the company contracted.

The annual report of that year pointed out that in 2017, the company took "contraction focusing on breakaway, segmentation of the top three" as the purpose, with the category strategy as the core, to realize the transformation and upgrading. Traditional fuel cars focus on 80,000 strong power SUV and 7-seat multifunctional coupe, new energy vehicles focus on long range and intelligent network. During the reporting period, although the company's operating results showed a substantial loss, it still made great progress in other aspects.

After saying this, the company's revenue in 2018 was again cut, and the loss further expanded.

At this juncture, it's still talking pretty, so don't expect listed companies to tell you when to run away, make sure you do your own research.

In 2016, the company's book of undistributed profits of 1.9 billion, to the third quarter of 2019, it is already -880 million, after the loss of thirty years of profits, but also to pour 900 million.

The automotive industry loss up extraordinarily tragic.

The main reason is that the discontinuation of the model will bring a huge amount of impairment. The company issued three announcements of impairment, respectively, 100 million, 540 million, 1.37 billion impairment.

Impairment announcement translated into human language is that the car can not be sold, can only stop production, related intangible assets, molds, fixtures, parts can now only be sold as scrap.

Let the people pain is, the first time to mention the impairment when the stock price is still five or six dollars,

After the announcement of the second trading day, the company's share price fell slightly 0.49%, closing 6.07 yuan.

It then rose as high as $6.80, but after the avalanche of results, it fell as low as a dollar or so.

Even when the second impairment charge, the stock price is still at more than 4 dollars, many investors hold still, has been waiting to fall to more than 1 fast.

As you can see, most investors simply do not know, what is behind the impairment of the automotive industry?

After the first impairment announcement, the company's stock price only fell slightly

Poor sales from the main models, decided to Haima Automobile's destruction. Automobile enterprises do not have explosive car car enterprises, doomed to failure.

The proportion of sunk costs in the R&D expenses of car companies is large. Testing costs, mold costs, all sunk. If a car is discontinued, the value of all these things will become zero. If several consecutive car sales are not good, can not recover the cost of research and development, the enterprise immediately in trouble.

The R&D cycle for a car is very long, and there's a lot of uncertainty about whether it will sell well after it goes into production. Small car companies do not have so many resources to develop too many models, if you bet on a main car, once the sales are bad, the risk will be uncontrollable. Large automakers rely on a sea of cars to spread the risk.

In recent years, the polarization of automotive enterprises is even more than real estate, the head of the rapid growth of enterprises, accelerated technological progress, the new car cycle from five or six years to two or three years, the industry barriers are getting higher and higher, the Haima such a small car enterprises, in fact, has lost the capital of competition.

More fatal is that after the implementation of the new energy double points policy, car companies must take into account the fuel car front at the same time, research and development of electric vehicles. All of this has accelerated the process of industry reshuffling.

The tide of new energy vehicles has not yet come, the first reshuffle of the domestic automotive industry has been completed in a year.

By 2030, traditional fuel cars will have no chance in Hainan. According to the plan, by 2030, the province of Hainan accumulated construction of 940,000 charging piles, the promotion and application of electric vehicles 1 million, to achieve the whole area of automotive clean energy.

If you want to invest in a company, you must figure out the pattern of the industry and the law of competition. Every industry has a scale advantage, but the automotive industry is so tough that if you can't sell more than 300,000 units per year, you can't afford to support a dealer network, and you're going to die.

The industry does not leave much time for car companies, from 2007 to 2017 is a ten-year golden period, if not in 2012 or so to stand firm, will be out of the game. By 2030, without realizing the transformation, will also be out of the game.

Haima Automobile half dead, from the time when the sales can not keep up with the industry, has been doomed to go out. The first impairment announcement is a signal to run for your life.

Many companies are "alive", but in fact already dead.

Many companies are "alive" but actually dead.

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