China's Auto Industry Profit Margin Slumps to 3.8% as Carmakers Shift to Value-Driven Strategies

In the first half of 2024, China's automotive industry generated revenue of RMB 5.19 trillion, up 1.8% year-on-year, while total profits amounted to RMB 195.4 billion, down 20% year-on-year. The industry’s average profit margin stood at 3.8%, significantly lower than the 6.5% average for downstream manufacturing sectors. Several major automakers, including Seres and GAC Group, have already issued preliminary loss warnings. Against this backdrop, Chery Automobile announced that its cumulative global sales have surpassed 20 million units and stated it would no longer engage in low-price competition, shifting its focus instead to brand enhancement, technological innovation, and customer satisfaction. Meanwhile, Zeekr launched the five-seat version of its 009X model on July 28 without holding an offline launch event. The brand delivered 178,400 vehicles in the first half of the year, a 97% year-on-year increase, with its 009X model topping SUV sales in the segment priced above RMB 500,000 for seven consecutive months and achieving an average transaction price exceeding RMB 530,000. Additionally, Xiaomi Corporation announced it will unveil its second vehicle series, “Pengcheng,” at 7 p.m. on July 30, simultaneously launching two SUV models—the N70 and N90—targeting the RMB 200,000–400,000 family SUV market. Its debut model, the SU7, has performed well in the market. Current industry trends indicate that some companies are transitioning from price-based competition to a value-driven model centered on product strength and brand equity.