Dealers Dealt Blow in Depressed Auto Market
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CHINA DAILY | HONG KONG EDITION Monday, May 6, 2019 MOTORING | 19 Foton’s commercial Short Torque Tesla’s tariff relief request rejected focus steers brand Trade officials from the United States rejected Tesla Inc’s bid for relief from President Donald toward success Trump’s 25 percent tariffs on the Chinese-made Autopilot “brain” of its Model 3 and other electric By LI FUSHENG vehicles, one of more than 1,000 [email protected] product denials linked to China’s industrial development plans. Foton Motor Group’s strategy Our strategy is According to documents filed by of focusing more on commercial clear. We improve the US Trade Representative’s vehicles is producing promising office and reviewed by Reuters, results, with its business revenue products and exclusion requests from Tesla in the first quarter of this year operation, and and others for Chinese-made growing 50 percent year-on-year products from aircraft parts to over 14 billion yuan ($2.07 bil- meanwhile increase to biotechnology instruments lion). investment to were denied because they The strategy has driven its prof- were deemed “strategically its in the three months to grow by sharpen our important” to the “Made in more than 80 million yuan com- competitive edge.’’ China 2025” program. pared with the same period last Cars await sale at a dealership in Shenyang, Liaoning province. PROVIDED TO CHINA DAILY president of year, according to statistics the Gong Yueqiong, Foton Volvo’s global car Chinese automaker released in orders up in April late April. The results came three months Volvo Cars global sales grew by after it sold a majority stake in 7.4 percent in April, compared Borgward, a passenger car brand 2.8 Dealers dealt blow in with the same period last year, it purchased in 2014 but failed billion yuan according to a company news to make a success in the Chinese release on Friday. Total sales market. investment in R&D facilities by Foton in over five years in April reached 56,535 cars “The results, especially selling depressed auto market within all regions of China, off the passenger car business, the United States and Europe, marked the preliminary achieve- reporting growth in volumes ment in our strategy,” said Foton It is offering electric, hybrid and compared with the same President Gong Yueqiong. “We fuel cell vehicles, covering light Business models come under scrutiny to maximize revenue month last year. Meanwhile, will focus all our resources on our trucks, vans and pickups, and has sales in the January-April commercial vehicles, which will received licenses to test autono- period stood at 217,855 cars, be key to our future strategy as mous driving on public roads. By CAO YINGYING Under such circumstances, car up 8.9 percent compared with well.” Yang Guotao, a vice-president at [email protected] manufacturers are making efforts the same period last year. The Gong said the good business Foton, said the carmaker expects to help dealers lift their businesses. volume growth in April was led performance is thanks to Foton’s its sales of new energy vehicles to With 2018 being the first year Dealers can consider One of those ways is assisting deal- by continued strong demand efforts in upgrading its commercial reach 100,000 in 2025, which is in almost three decades that nega- the new energy ers in providing more versatile and for Volvo’s award-winning vehicles ranging from light to heavy believed to be a turning point for tive growth has been recorded in diversified services for consumers. SUV range led by the XC60, trucks over the years, and in cutting their growth. China’s auto industry, the country’s vehicle and pickup This year, SAIC GM upgraded its and followed by the XC40 and costs in sales and management. Foton is planning to strengthen car dealers are facing increased truck market in some traditional 4S stores to 7S stores, XC90. Volvo’s latest models, A total of 131,000 vehicles were its overseas presence as well. In pressure to adjust their current adding used car servicing, shar- regions. Mergers the V60 estate and the US-built sold from January to March, up the first quarter, it exported 13,000 business models, according to a top ing services and financial support. S60 sedan, also contributed 11.8 percent year-on-year, lifting vehicles, topping the list of Chinese industry association. and acquisitions of SAIC Volkswagen has added smart to the increased volumes, the the group’s market share by 1.3 per- commercial carmakers. A report released by the China services, sharing and social service company said. centage points to 11.5 percent. Zhang Xiyong, Foton chairman, Auto Dealers Chamber of Com- dealers in the same at their 7S stores. “Our strategy is clear. We said the company’s overseas sales merce last month showed that region can also assist China Yongda Automobiles Ser- Shares soar despite improve products and operation, will reach 100,000 vehicles in 2020, a total of 53.5 percent of dealers vice Holdings, which specializes in and meanwhile increase invest- accounting for 15 percent of its total reported losses last year, with 27.1 in saving costs and automobile sales services, financ- sales dip for Fiat ment to sharpen our competitive deliveries. percent of them recording consecu- ing and rentals made great prog- increasing customer Fiat Chrysler reported falling edge,” said Gong. Foton has established a number tive yearly losses from 2016-18. ress in used car sector last year. profits on Friday, but its share He said Foton’s investment in of plants overseas. Late last month, According to the report, 85 per- retention.’’ The enterprise sold 42,300 price soared after its CEO research and development in the it inked a deal with Charoen Pok- cent of dealers had not met car- Mei Songlin, an industry analyst used vehicles, with a year-on-year indicated that the Italian-US first quarter went up 27 percent phand Group to set up a new makers’ sales targets last year. Only increase of more than 20 percent. group would play an “active year-on-year, adding that similar joint venture to produce vehicles dealers for Mercedes-Benz, GAC The gross profit of the financial and constructive role” in expenditure last year doubled from in Thailand for sales across the Toyota, BMW, Lexus, Chevrolet and insurance business of the com- consolidating the automotive 2017. ASEAN region. Cadillac achieved their sales tar- pany increased 23.4 percent to 1.35 53.5 sector. The world’s seventh- The company will invest 2.8 bil- The new company will make gets set by the car manufacturers. billion yuan ($200 million). largest carmaker reported that lion yuan over five years in R&D a broad range of vehicles, with The Vehicle Inventory Alert percent Auto dealer Zhongsheng Group its first-quarter net earnings facilities. Foton providing the technology. Index released by the of China expanded its revenue by 2.4 billion of dealers reported losses last were chopped nearly in half in Foton is one of the first commer- Foton said it is confident in Automobile Dealers Association yuan in 2018 by providing insur- year, according to a report the first three months of 2019 cial vehicle makers to develop new future growth prospects in South- showed that Chinese car invento- ance, financing and used car sales, released by the China Auto as sales slid, but maintained energy vehicles and autonomous east Asia, targeting a top three ries have hovered above the “alert going against the greater trend for Dealers Chamber of Commerce it would still meet its annual driving. position in Thailand. level” for 15 months in a row, which dealers in the auto industry. target of a stable operating means the depressed market has However, some industry insid- profit. The group’s share price not shown an upward turn. ers offering discounts in China’s ers are not optimistic about these briefly fell before surging by According to statistics from the vast rural areas, passenger vehicle new business directions. more than 5 percent to 14.26 China Association of Automobile prices keep falling, which lowers Taking the sharing vehicle busi- euros ($16.10). Manufacturers, vehicle sales have dealer profit margins. ness as an example, dealers have fallen for nine months in a row It is also reflected by the China to invest lots of money on equip- since last July. Passenger Vehicle Market Price ment and human resources, which German registrations In March, sales were 2.52 million Index released in March by CAAM, cannot create profits in the short falter on new EU tests units, falling 5.18 percent on the which showed a downward turn term. same period year-on-year. Vehicle in vehicle prices last year and in Mei was quoted by the Econom- New car registrations in sales in first quarter stood at 6.37 January this year. ic Observer as saying: “Dealers can Germany fell back in April, million units with a decrease of Dealers of Chinese independent consider the new energy vehicle official data showed on Friday, 11.32 percent compared with last brands are under greater pressure. and pickup truck market in some in a sign the vital industry is year. Mei Songlin, an industry ana- regions. Mergers and acquisitions still grappling with tougher In spite of the declining auto lyst, was quoted by the Economic of dealers in the same region can emissions tests and a broader sales, the number of authorized Observer that most Chinese brands also assist in saving costs and economic slowdown.