The earlier Huawei Zunjie incident has already exposed a harsh reality:
Manufacturing complete vehicles in China is not a good business.
Take a look at how profits were distributed among domestic automakers in the first half of this year.
It was basically a fifty-fifty split. And even among the profitable companies, their profit margins were really not that high given their scale.
The domestic auto industry is locked in a brutal race to the bottom.
On the cost side, companies have to contend with enormous uncertainty upstream, including lithium mines and batteries.
On the consumer side, people are tightening their purse strings, and comparing prices has become commonplace.
The only way to expand profits is to go overseas. But things abroad are not looking good either.
So here’s a word of advice for investors:
Stay away from automaker stocks! Stay away from automaker stocks! Stay away from automaker stocks!
Some things bear repeating three times! #宁德时代 #比亚迪
Manufacturing complete vehicles in China is not a good business.
Take a look at how profits were distributed among domestic automakers in the first half of this year.
It was basically a fifty-fifty split. And even among the profitable companies, their profit margins were really not that high given their scale.
The domestic auto industry is locked in a brutal race to the bottom.
On the cost side, companies have to contend with enormous uncertainty upstream, including lithium mines and batteries.
On the consumer side, people are tightening their purse strings, and comparing prices has become commonplace.
The only way to expand profits is to go overseas. But things abroad are not looking good either.
So here’s a word of advice for investors:
Stay away from automaker stocks! Stay away from automaker stocks! Stay away from automaker stocks!
Some things bear repeating three times! #宁德时代 #比亚迪
