European debt crisis, the current global expansion of auto companies face dilemma

A week of observations In June of this year, dealer Yongda Automobile stopped listing plans that had been exercised for a year at the last moment of listing. The reason is that it is expected that as the impact of the European debt crisis increases, it will affect the global investors. confidence.

This is a direct and significant impact that we have found on this dialing of economic tornadoes to the domestic auto industry following statistical data showing that the European debt crisis had severely impacted the European auto market one week ago. Prior to this, we faced the adverse effects of the European debt crisis on the Chinese market only on the decline of export trade, the forced appreciation of the renminbi, etc., which are more macroscopic and ethereal and seem to be far from the auto industry.

Vice Chairman of the Board of Directors of Yongda Motors stated that he has not given up long-term plans for listing in Hong Kong. However, when the market is not good, the issuer’s and buyer’s recognition of the price may be biased. The Hong Kong market is particularly noticeable. After a long period of time after the financial crisis in 2008, no company was willing to go public because according to the relevant regulations of the Hong Kong stock market, 90% of new shares must be issued by international placement and 10% retail sales. The so-called international placement sells stocks to international institutions. However, investors in international institutions react very sensitively to the capital market. If there is any sign of trouble in the international capital market, it will affect the investment behavior of international investors.

In fact, in addition to the direct impact of the capital market, the European debt crisis has already directly affected the local market conditions: the summer was originally a peak season for car sales, but European automakers’ sales in the European Union market decreased in May this year. 8.7% has dropped for the eighth consecutive month. This year, the French auto market has shrunk by 17%, Italy by 19%, and Greece by 40%, while the relatively stable German market has also shrunk by 5% in May. It is expected that the entire European automotive market will be reduced by 8% to 10% throughout 2012, which is even more pessimistic than expected at the beginning of the year. (Source: Southern Metropolis Daily South Network)

Like the short-term impact of natural disasters such as earthquakes and floods on the Japanese auto industry, the decline in the regional market has impacted the development of the European auto industry and weakened its competitiveness relative to the automobile counterparts in the United States, Japan, and South Korea. Unlike the short-lived natural disasters, the economic recovery often requires a cycle of “years”. From the initial Greece to Spain to Italy, the whirlpool of the European debt crisis will involve more and more European countries. Among them, no country, institution or individual can accurately predict the time of its termination and the eventual impact.

On the other hand, representatives of the European automotive industry, represented by the Volkswagen Group, Fiat, etc., have formulated mid- to long-term investment plans aimed at "contending for hegemony" in the past few years. However, they are booming in the emerging markets and the stable transition of the global economy. . In fact, for a company that is trying to achieve greater development goals in three to five years, if it is faced with a market where revenues gradually shrink each year, R&D and marketing costs that it invests in the market each year, it is very likely that it will not be able to achieve compliance on time. . Forcing aggressively may bring risks and pressure to the business operations.

Listing is still not listed, this is a problem; expanding investment is still a tightening of the front, which is even more of a problem. As a matter of fact, behind the cancer crisis that is continuously spreading and deteriorating in the European debt crisis, it will be a dilemma for the large auto groups.