"Evergrande in the automobile industry has appeared, but it has not exploded yet." Recently, a big boss of a car company made the remarks of Evergrande in the automobile industry, which made the entire car circle come to a thrilling moment, and the stock prices of listed car companies fell sharply.
In the industry's view, the so-called "Evergrande in the automotive industry" is a metaphor for some auto companies to expand by relying on high debt and facing the risk of bursting, which is similar to the path of Evergrande's "collapse". In fact, as long as you carefully review the financial reports of mainstream domestic and foreign auto companies, you can know that compared with leading overseas auto companies, the financial situation of domestic auto companies is healthier and it is even less likely that "Evergrande in the automotive industry" exists.
Just as Li Yunfei, general manager of BYD Brand and Public Relations, also responded positively to the negative remarks recently: the assets and liabilities of China's mainstream car companies are better than those of foreign car companies, and there is no so-called "Evergrande in the car circle" in China's mainstream car companies at all, and any remarks that criticize China's new energy vehicles are not advisable. At the same time, BYD has reported and reported relevant evidence and clues to relevant national departments for many alarmist remarks and various rhythms on the Internet. The relevant parties who maliciously lead the rhythm will be held legally responsible!
"Evergrande in the automobile industry has appeared, but it has not exploded yet." Recently, a big boss of a car company made the remarks of Evergrande in the automobile industry, which made the entire car circle come to a thrilling moment, and the stock prices of listed car companies fell sharply.
In the industry's view, the so-called "Evergrande in the automotive industry" is a metaphor for some auto companies to expand by relying on high debt and facing the risk of bursting, which is similar to the path of Evergrande's "collapse". In fact, as long as you carefully review the financial reports of mainstream domestic and foreign auto companies, you can know that compared with leading overseas auto companies, the financial situation of domestic auto companies is healthier and it is even less likely that "Evergrande in the automotive industry" exists.
Just as Li Yunfei, general manager of BYD Brand and Public Relations, also responded positively to the negative remarks recently: the assets and liabilities of China's mainstream car companies are better than those of foreign car companies, and there is no so-called "Evergrande in the car circle" in China's mainstream car companies at all, and any remarks that criticize China's new energy vehicles are not advisable. At the same time, BYD has reported and reported relevant evidence and clues to relevant national departments for many alarmist remarks and various rhythms on the Internet. The relevant parties who maliciously lead the rhythm will be held legally responsible!
Chinese automakers show financial resilience
Through analyzing the financial reports of mainstream car companies at home and abroad, it is not difficult to find that a high debt ratio is a common feature that is common in the global automotive industry. In the first quarter of this year, Ford's debt ratio was 84.3%, General Motors' 76.5%, and Volkswagen's 68.5%. In contrast, the overall debt ratio of Chinese auto companies is lower, with BYD at 70.7% and Geely at 68.1%.
A phenomenon worth noting is that the debt ratio of Chinese auto companies decreased significantly in the first quarter of this year, which is also different from that of overseas auto companies.
There may be three main reasons for the high debt ratio in the automotive industry. First, automobile companies need to pursue economies of scale to reduce bicycle costs, so they need to use huge funds when building super-large factories and purchasing machinery and equipment; second, the cycle from parts procurement to vehicle delivery is relatively long, and a large amount of unexpired suppliers will be formed in the middle, pushing up interest-free liabilities; third, if automobile finance business is carried out through bond financing, it will also form a large amount of interest-bearing liabilities, pushing up the debt ratio.
Judging from the separation of the debt structure, the interest-bearing liabilities of Chinese auto companies are significantly lower than those of overseas auto companies. Among them, BYD has only interest-bearing liabilities of 28.6 billion, Geely has 86 billion, and SAIC has 94.5 billion. In contrast, overseas car companies often start at hundreds of billions of dollars, of which Toyota has interest-bearing liabilities of 1.8 trillion yuan, Ford has 1.1 trillion yuan, and Volkswagen has 1.07 trillion yuan.
Most of the interest-free liabilities are accounts payable and notes payable. As shown in the above table, the proportion of accounts payable and notes payable by China's mainstream car companies is between 31% and 52% of revenue. When the revenue scale of the auto companies is larger, the corresponding accounts payable will also be larger. This is a normal phenomenon in the automotive industry. Like BYD, its revenue in 2024 was 777.1 billion yuan, and its accounts payable were 244 billion yuan, which is equivalent to a revenue ratio of 31%. The average payment cycle to suppliers is 127 days, which is the shortest among mainstream car companies.
It is not difficult to see from the comparison of financial reports that the proportion of interest-bearing debt of Chinese auto companies is extremely low, which is exactly the opposite of overseas auto companies. This shows that the financial situation of China's mainstream auto companies is more stable and has stronger risk resistance.
Why is "Evergrande in the Automobile Industry" misread?
Compared with the "Evergrande in the Car Circle", it has caused wrong guidance to the public and played a countercurrent role in the development of the industry. What the outside world should pay more attention to is that in recent years, Chinese auto companies have continued to increase their R&D investment, driving their competitiveness to continue to leap forward and their competitiveness in the global automobile industry has been continuously improved.
The latest data from the China Passenger Car Association shows that from January to April this year, China's new energy vehicle sales surged by 45% year-on-year, accounting for nearly 80% of the global incremental contribution. Under the new market competition, European and American brands have shown signs of fatigue.
It is not difficult to see from the first quarter reports of mainstream domestic automakers that the higher the R&D investment, the stronger the sales growth, and those who "focus on marketing and neglect technology" face sales pressure. Among them, BYD's R&D expenses increased by 34%, and high investment drove technological innovation, helping to significantly increase sales, revenue and profits; Geely's R&D expenses increased by 12%, providing support for the improvement of product competitiveness and driving sales growth by 31%; Great Wall Motor's R&D expenses fell by 3%, but sales expenses rose by 61%, and sales volume, revenue and profits declined significantly during the same period.
How important does BYD attach to technology research and development? According to the financial report, BYD's cumulative R&D investment has exceeded 190 billion yuan. Among them, BYD's R&D expenses in the first quarter of this year were approximately 14.223 billion yuan, exceeding the net profit of nearly 5.1 billion yuan in the same period. Li Yunfei responded to netizens' questions on Weibo that BYD still continues to invest in R&D, reinnovate in technology, and focus on doing its own things well. When asked how he viewed the pressure on Great Wall's performance, he generously expressed his willingness to continue to cheer and send his blessings.
The facts cannot be argued. The "high debt" of Chinese auto companies will not trigger Evergrande's collapse. Chinese automobiles do not need alarmist remarks, but need for vision and resilience to work side by side.
