HK Stock Market Move | Car dealers collectively turn off the engine. The industry's operating pressure continues to increase. Dealers urgently need to transform and break through.

The car dealers, which had surged for two consecutive trading days before, collectively fell today. As of the time of writing, ZHONGSHENG HLDG (00881) fell 10.45% to HK$16.96; MEIDONG AUTO (01268) fell 10.34% to HK$2.6; ZHENGTONGAUTO (01728) fell 5.84% to HK$0.129; YONGDA AUTO (03669) fell 4.19% to HK$1.83. On the news front, the China Automobile Dealers Association recently completed its election, with Xiao Zhengsan assuming the position of chairman. At the annual meeting of the association, Xiao Zhengsan pointed out that in the first half of this year, more than half of the domestic car dealers face losses, and operational pressure continues to increase. According to relevant statistics, the proportion of dealers incurring losses in the first half of this year reached 50.8%, while the proportion of profits was 35.4%. The losses have significantly expanded compared to the same period last year, and the average gross profit per store has been greatly reduced compared to 2023. Dealers facing pressure from price wars are facing severe losses in new car sales, with a contribution to new car profits of -26.5%. It is worth mentioning that increasing investment in the field of new energy vehicles has become one of the ways for many dealers to break through the current situation. ZHONGSHENG HLDG recently announced that the company has signed a preliminary agreement with Chongqing Sokon Industry Group Stock to further negotiate cooperation in distributing its new energy vehicles. According to data from the China Automobile Dealers Association, in 2023, the top 100 dealers collectively opened 555 stores, with new energy brands accounting for six tenths, and cooperation primarily with independent new energy brands such as BYD Company Limited and GAC AION.