On December 17, Geely Automobile Holdings Co., Ltd. (hereinafter referred to as Geely Automobile) announced on the Hong Kong Stock Exchange that it expects its annual net profit to fall by about 50% as of December 31 this year. Geely Automobile explained part of the reason for the decline in profits as “unrealized foreign exchange exchange losses included in the company’s business in Russiaâ€. The analysis believes that the recent sharp depreciation of the Russian currency ruble is the main reason for Geely Automobile to issue a profit warning at this time.
In recent years, the Russian market has been one of the overseas markets where Chinese car companies are focusing. According to the "Daily Economic News" reporter, Geely, Great Wall, Chery and Lifan are all entering the Russian market. This year, the number of Chinese car dealers in Russia has increased by 161, with a total of 668, accounting for about 16% of the total number of Russian car dealers.
Gasgoo.com reported that about 53% of Russian vehicles are older models with a car age of more than 10 years. A large number of vehicles are urgently needed to be renewed, which means that Russia still has a huge market space.
The industry believes that although the current export trade to Russia is affected, in the long run, the Russian market will be an important overseas market for independent brands, and independent auto companies need to strengthen risk control over overseas markets, except for exchange rate hedging. , layout localized production is also an important path.
Car companies adjust prices or switch to US dollars /
"The devaluation of the ruble has caused Geely to lose 800 million yuan in accounts receivable." An unnamed securities company Hong Kong stock analyst told the Daily Economic News that Geely’s business in Russia mainly uses rubles. In the middle of the settlement, and in the middle of the dealer's sale of the car, the exchange rate of the ruble fell sharply and the profit was damaged.
"The profits of autonomous car companies are generally not high, and the exchange rate decline will directly lead to losses." The above analysts said that in addition to Geely, the decline of the ruble will have a negative impact on domestic car companies' export business to Russia.
“A lot of car companies are beginning to take countermeasures.†Roland, a car analyst who has long been concerned about the Russian auto market, said, “Jianghuai Automobile has now started selling at US dollars.â€
It is understood that due to the devaluation of the ruble, Chinese car companies began to use price increases or buy cars with dollars to avoid exchange risk, which directly led to soaring car prices, greatly reduced market competitiveness, and adversely affected sales.
The expansion of China's own-brand auto dealerships in Russia is very strong. At present, there are more than a dozen brands in Geely, Great Wall, Chery, Lifan and BYD selling their cars in Russia. Among them, Geely, Lifan, Great Wall and Chery are close to annual sales. The "first echelon" of 20,000 vehicles. "It can be said that Russia has become one of the largest overseas markets for Chinese car companies." Roland said.
Most car companies use US dollars to settle in their trade with Russia. "Dongfeng is a complete vehicle export to Russia, and it is settled in US dollars." A person from Dongfeng Motor Corporation's overseas business department told the "Daily Economic News" that the current book loss caused by the devaluation of the ruble is not too big, but in the future Sales may be "very difficult."
Speed ​​up localization or way out /
According to an industry insider who is engaged in export business, car companies must face unknown risks from exchange rates when conducting business in overseas markets. "There are two main ways for independent auto companies to avoid exchange rate risks," Roland told reporters. "One is hedging, and the other is full-scale localized production."
“The Great Wall has already established a factory in Russia with an annual output of more than 100,000 units.†Roland told reporters that many independent brands have begun to lay out localized production. “Now the devaluation of the ruble is an opportunity for independent auto companies to accelerate localized investment. Russia The factory can radiate most of the countries of the Commonwealth of Independent States. According to the China Auto News, in January next year, Lifan Motors will also invest in Russia and is expected to start production in 2017.
The above-mentioned Hong Kong stocks securities analysts believe that Geely and other car companies did not hedge their exchange rate risk when using the ruble for settlement. This is an important reason for Geely's impact on this round. "The ruble is relatively a weak currency," he told the Daily Economic News reporter. "Therefore, the risk of exchange rate has not received enough attention."
According to the "Daily Economic News" reporter, because the ruble is not the mainstream currency in international trade, and because the cost of hedging is relatively high, the profit rate of self-owned brand products in overseas markets is generally low, and can not afford The added cost of the period value.
Therefore, localized production has become an investment plan for Chinese car companies interested in exploring this market. However, localized production places high demands on the sales volume of models.
According to industry analysts, taking the annual sales volume of Great Wall Motor in Russia with less than 20,000 vehicles as an example, there is still no small challenge to fully utilize the capacity planning of 100,000 vehicles. Therefore, the impact of the ruble depreciation will continue for a longer period of time. It is up to the car companies to pay close attention. (Intern reporter, poetry Yang)
Related links Zhejiang exports to Russia fell 6.8% in November
Geely's export trade situation is just a microcosm of Zhejiang, a traditional economic province. According to data provided by Hangzhou Customs to the "Daily Economic News" reporter, in October this year, Zhejiang exported 4.11 billion yuan to Russia, a year-on-year increase of 3%; a decrease of 20.8% from the previous month; but in November, exports to Russia reached 3.83 billion yuan, a year-on-year decline. 9.1%, a decrease of 6.8% from the previous month.
Zhang Handong, dean of the Zhejiang Business Research Institute, told the Daily Economic News that Russia’s economic instability and the devaluation of the ruble brought certain risks to Zhejiang’s import and export trade, including trade contract defaults, the other party’s refusal to pick up the goods in time, and not paying on time. The price of the goods and the temporary request for price reduction.
Wenzhou footwear industry or "being ravaged"
Wenzhou shoes with a wide range of styles are the “main products†of Zhejiang's trade with Russia.
The relevant person in charge of Wenzhou Shoe Industry Association told the Daily Economic News that Russia is the third largest traditional export market after Wenzhou footwear exports after the EU and the US. In 2013, the export value of footwear exceeded 800 million yuan. It is expected that the export value will drop significantly this year. The sharp depreciation of the ruble will affect the actual consumption of Russia, which will further affect the export of Wenzhou footwear.
"Exporting companies that have received orders from Russia in the past year are basically losing money. In particular, Wenzhou shoe factories may die. Some high-quality enterprises must pay the other dollars when they receive orders, and pay in advance, otherwise they will not accept orders. "Wenzhou, a corporate person who did not want to be named, said that recently, many financial institutions have stopped the letter of credit for Russian foreign trade.
Zhou Dewen, deputy director of the Central Committee of the Economic Development Committee of the Democratic Progressive Committee and chairman of the Wenzhou Small and Medium Enterprises Development Promotion Association, told reporters that according to his understanding from the Russian and Zhejiang business offices, with the depreciation of the ruble, consumption decreased, these professional market orders decreased by 30% to 40%. %.
In addition to the footwear industry, Zhejiang's main exports to Russia include mechanical and electrical products, clothing, textiles, small commodities and consumer goods. As an additional town in which Zhejiang exports to Russia, Yiwu has been affected.
Jin Jianfeng, the boss of Yiwu Aojie Import and Export Co., Ltd., said that the company began trading with Russia more than ten years ago, and its exports accounted for 20% to 30% of the company's total. As of December, at least a few million dollars in goods did not have to come back. Some buyers have requested to suspend shipments, some directly cancel orders, and some have already arrived in Russia and the goods are thrown at the port without extraction. This month, his company had just two small cabinets (including shoes, toys, etc.), transferred from Ningbo Port to Russia, and no one was interested.
China News Network quoted Yiwu Customs as saying that there are many problems in the current export of Yiwu to Russia. The first thing to bear is the accelerated depreciation of the Russian ruble to increase Sino-Russian trade risks.
After future trade disputes may increase sanctions imposed on Russia from Europe and the United States, Russia will turn its attention to China, and fruits and vegetables and aquatic products in Zhejiang will expand exports.
However, Shen Yuejun, general manager of Hangzhou Xiaoshan Yueteng Aquaculture Co., Ltd. told the media that due to the sharp depreciation of the ruble, the consumption power of local residents has declined, and many imported goods cannot be afforded. Therefore, the sales of the company's white shrimp are reduced by half compared with last year. Nearly 20 million yuan.
Zhou Dewen believes that in addition to the reduction in orders, the depreciation of the ruble may cause new trade conflicts and disputes. When the economic situation is not good, some Russian buyers have defaulted on payment or demanded price cuts. The profit return of Russian and Zheshang merchants has dropped significantly, with the highest drop of 50%.
The reporter noted that at present, with the trade dispute brought about by the devaluation of the ruble brought by the Russian economy, some foreign trade companies have found export credit insurance companies to try to claim insurance compensation to reduce trade losses.
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