Increasing cost pressures, independent car companies brewing "price increase"

High manufacturing cost pressures have also spread to the auto market. In 2012, the auto market may be about to stage an annual reversal show – changing the year-round price cuts and turning into an upward trend in prices. According to a variety of investigations, several independent auto makers, including Changan Automobile, Great Wall Motors, GAC Gonow, and Haima Automobile, have begun to quietly raise their prices. With the increase in the cost of raw materials procurement, supply chain and other production costs as well as labor costs, car companies also need to raise prices to protect profits.

Rising prices "For rain coming"

JP Morgan Chase issued a news that the PMI index of all industries in the world rose to a nine-month high in December last year, reaching 53.0%, and the service industry PMI index rose to 53.2%. For China, in December 2011, the manufacturing PMI index (Purchasing Managers Index) reached 50.3%, an increase of 1.30% from the previous month and is still operating at a high level.

The PMI index reflects the health status of the manufacturing industry. As the internationally accepted macroeconomic monitoring leading indicator system, which is more than 50%, reflecting the overall economic expansion, Chinese companies are facing the two biggest challenges of rising costs and rising prices.

This week, we learned from 4S stores in Beijing, Guangdong, and Tianjin, and found that after the holiday season, some models are brewing prices.

The Great Wall may be the first company that cannot withstand the pressure of high costs. On December 20 last year, at the delivery ceremony of the 600,000 Haval SUVs, Wei Jianjun, chairman of Great Wall Motors, once stated that each Haval SUV will have a price increase of 1,000 yuan, and future products will continue to rise in price. However, when reporters asked about this issue again on Tuesday, a person from the Great Wall Public Relations Department stated: "This is not very clear. We should not raise prices. The company has strict regulations in this regard."

A purchasing manager of GAC GIO stated that the cost of raw materials procurement, supply chain and other production costs as well as labor costs are all increasing, and more and more companies have been unable to tolerate such pressure. GAC GIO recently issued a price increase notification to distributors throughout the country. The price increase is mainly aimed at microfabricated products. GAC GIO has achieved good momentum this year.

The reporter was informed that Chang’an Automobile, such as the Chang’an Star, also needs to increase prices for its products.

In the market, the price increase of some models has already been "excited". Dongfeng Nissan, a salesperson at a 4S shop in Guangzhou, said that the Tianyi model in the store did appear to be out of stock. As the sales volume is relatively good, the promotion efforts of the manufacturers are decreasing, and the dealership is expected to start reducing the discount rate. May appear in the near future."

And we also found in the auto market survey that the market price of hippocampus cars is also rising quietly, and the average increase in the number of cars such as Fukami and Premarin are all around several thousand yuan.

Increasing cost pressures

Analysis of the industry, resulting in this increase in the auto market price is mainly due to increasing cost pressures in all aspects, especially the capital and scale are relative to the joint venture manufacturers weaker independent brands. In addition, some brand dealers who had previously made significant price reductions have already completed the annual tasks of the depot in advance. Therefore, dealers began to pay attention to the improvement of profits.

"The auto market is a normal phenomenon of price rebound." Senior automotive analyst Zhong Shi believes, "After the end of 2011, a sales spurt, most dealers do not have to 'impulse' headaches, while manufacturers give promotional efforts It is also gradually decreasing, so it is inevitable that the overall price of the auto market will slowly rise. Therefore, it looks like a price increase."

Zhong Shi believes that the reason for the “price increase” caused by some car companies is that the pricing of new cars is low when they are listed on the market. “In order to occupy market share, the new car has taken a low strategy in pricing, which has caused the company’s profits to fail to keep up.” There are several car prices, I think it is very normal. But it cannot be said that it is a price increase, but it should be said to be 'rebound'."

Which of the raw materials and labor costs will have a greater impact on the rise in corporate costs? According to industry insiders, due to the increase in labor costs, some of the profits will be offset, causing some upward pressure on prices, but not much. As for raw materials, the prices of steel, including steel, are rising, but not so much. The impulse for car prices to rise is not big, and there may be some reactions later.