Abstract The French newspaper Le Figaro published an article entitled "China is the "printing Machine" of the world's auto giants" on April 3. It is compiled as follows: McKinsey & Company has just completed a research report. The company has researched major automakers...
On April 3, the French newspaper Le Figaro published an article entitled "China is the "printing machine" of the world's auto giants. It is compiled as follows: The McKinsey Consulting Company of the United States has just completed a research report. The company studied the global profitability of major automakers last year. Conclusion As the company’s head, Laurent Giye, said: “China has concentrated 40% of the auto industry’s profits, but it only accounts for 22% of auto sales.†The auto industry’s profits are increasingly concentrated in China because of 2013. China still accounts for only 35% of global profits. Jiye attributed this phenomenon to "the growth of the Chinese auto market and the Chinese consumers value Western brands." Chinese consumers value brands so that high-end cars generate higher profits: in 2014, global luxury car sales reached 9 million, accounting for 12% of total sales, but brought 38% of profits.
When the car companies only achieved an average profit margin of less than 7% on a global scale, they achieved a profit margin of 12% in the Chinese market. Geeer clearly pointed out: "From the perspective of mid-level cars, the worst-performing ordinary brand cars in the Chinese market are also more profitable than the best-performing cars in the European market."
China's vitality has helped the automotive industry as a whole to show excellent financial health. The operating income of major automakers in 2014 reached US$127 billion, reaching “the highest level in historyâ€. Between 2008 and 2009, global profits were close to zero.
China and North America have concentrated most of the profits of ordinary car manufacturers around the world. Instead, they have failed to make money in Russia, Latin America and India. They are reinvesting in eco-friendly models in Europe, but the profit margin is still only 1%.
Obviously, if you don't enter China or the United States, it will be difficult to achieve results. This logic explains Renault's investment in setting up in China. If French car companies want to significantly increase their profits, this is a must.
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