Tariff reduction is better than expected

Car tariffs were lowered and boots came down. A number of listed company executives and industry insiders interviewed the Securities Times reporters, and their attitude was positive and positive. In the sub-sectors of vehicle imports, auto parts and various industries, the Chinese auto industry has been fully prepared in both the expected mentality and the actual business level, and policy adjustments are conducive to the promotion of domestically-produced parts, strengthening the foundation, self-pressurization, improve quality.

Low import vehicle price sensitivity

The market had expected that the import tariffs on whole vehicles would drop from the current 25% to 10%-15%, and this time the number of boots fell to 15%.

Zhang Xin, director of the board of directors of Shenhua Holdings, told the Securities Times that the impact of this tariff cut was mainly reflected in the expected aspects, and had little impact on the actual sales of imported cars. He said: “Actually, the impact of this tariff cut on the price of car purchases is relatively small, and it is expected that the decline will be 10% of the CIF price, and the total price will also be reduced by about 5%. In fact, the import car user groups have a price of several tens of thousands of yuan. Change is not very sensitive."

Jiang Huihua’s director-general, Feng Liangsen, also believes that the impact of this tariff cut on the industry should be limited because the reduction in the tax burden of the entire imported vehicle accounts for a small proportion.

"A lot of imported car discounts have been higher than 6%, so the impact on the imported car retail market price will not be significant for the time being." Li Yanwei, member of the Expert Committee of the China Automobile Dealers Association, said that the import tariffs for cars are reduced by 10%, which is equivalent to the prices of imported cars. In the new car guidance price reduced by 6%-8%.

Pacific Securities believes that the reduction of vehicle tariffs will bring good for luxury car dealers. Specifically, the reduction in tariffs will have a more stimulating effect on the luxury and ultra-luxury imported car market of more than 300,000 yuan, and luxury car dealers such as Guanghui Automobile, Zhongsheng Holdings, and Yongda Automobile will benefit.

The Securities Times reporter interviewed a number of automotive distribution companies. A luxury car dealership group in Shanghai also pointed out that most new cars originally had different degrees of discount. Even if the factory guided prices are adjusted, the adjusted prices are basically higher than the actual market transaction prices. The company further pointed out that the impact of lower automobile tariffs on the industry will, in the long run, help rebuild the domestic new car price system, benefit the luxury car consumers, promote consumption upgrades and bring about an increase in sales, which will benefit the leading distributors; For dealers, they can use this opportunity to reduce tariffs, narrow the discount rate, and further increase profitability.

However, there are also car dealers responding that they will maintain close communication with various car brands in the short term and it is expected that major car brands will have further guidance on prices in the near future. Moreover, a corresponding subsidy policy may be issued for existing inventory vehicles. “This process will not last long and the sales business will still proceed normally.”

Another person in the auto dealership industry said that for the automobile dealership field, the tariff reduction means that the state’s efforts to protect the industry have been reduced. As far as market expectations are concerned, auto dealership companies may have more room for competition, and also have the right to speak with OEMs. Can be improved. However, he also said that the auto dealership market in the secondary market, the general market, "should not be continuous."

China Merchants Securities has suggested that after the implementation of the policy in July, the import car trade will resume, and the sales volume will gradually climb during the policy adaptation period, that is, the import dealers in the second quarter will have the pressure to digest inventory. Of course, after lowering tariffs, it will inevitably promote the increase in the scale of sales of imported cars over the long-term. Both import service providers and net sales will benefit in the long term.

Parts companies respond indifferently

The top five imported parts and components in China in 2017 were the transmission system, body and its accessories, parts, and engine parts, automotive electronics and engine complete engines. It is understood that most of the domestic auto parts imports are subject to a 10% tariff, which is reduced to 6% this time, and the margin is limited. A number of auto parts listed companies interviewed said that the impact was modest. Some companies also said that the tariff adjustment was beneficial to the development of the company.

Chen Min, a director of the Bank of Shanghai, told the Securities Times that the tariffs on parts and components have been reduced, which generally benefits the Silver Wheel shares. On the one hand, because foreign-invested suppliers have already built factories in the country to achieve local supply, the current domestic production costs are lower than imports, and lower import tariffs will not change the domestic competitive environment; on the other hand, lower tariffs will help reduce Import costs for parts of the heat exchanger.

An auto parts listed company in Jiangsu said that the tariff adjustment has little effect on the company, because the policy mainly affects the entire vehicle company, the sales of vehicle trade companies, and the parts and components mainly imported from abroad. Currently imported parts are mainly engines, gearboxes, etc. The internal and external ornaments are definitely localized. The imported parts and components are all core components. In general, there are no relevant technologies in China, or the requirements of high-end customers cannot be met.

West Pump shares said that the company has little effect. Although at present, it may be unfavorable for the export of parts and components in the short term, it will help improve the foundation, self-pressurization, and quality of domestically produced parts in the long term. There are a large number of companies that hold similar views. The decline in tariffs of these companies involves a relatively small percentage of total revenues.

Precision Forging Technology believes that there is no need to do excessive negative interpretation of tariff cuts. On the one hand, the tariffs on some products have not changed. On the other hand, even if there are changes, the competitive advantages of many domestic listed companies and many listed companies will not disappear due to a few percentage points of tariffs. The company has passed long-term market competition and long-term export. Has accumulated considerable technical advantages.