China Passenger Car Association: Profit Rate of Auto Industry Is Still Low

The auto industry is under enormous pressure to survive. From January to February 2023, the revenue of the automobile industry was 1,284.7 billion yuan, a year-on-year decrease of 6%; the cost was 1,126.4 billion yuan, a decrease of 5%; the profit was 41.4 billion yuan, a year-on-year decrease of 42%, and the profit rate was 3.2%. The profit rate of auto industry was still low as the auto production has dropped by 14% due to the Chinese New Year holiday and high inventory. In addition, the penetration rate of new energy vehicles has reached 28.7%, driving changes in the profit structure. In order to promote the demand for fuel vehicles, car companies continued to cut their prices, further eroding profits. In the future, with the gradual stabilisation of the market and the decline of world oil prices, the demand for fuel vehicles will gradually stabilise, and the profits of the auto industry will gradually improve.