Trans-China Automotive Holdings Limited has reported total revenue of RMB1.09 billion ($226.8 million) for the 1QFY2022 ended March, down 15% y-o-y.
This is due to a number of factors such as an overall soft Chinese economy, Covid-19-related store closures in Shenzhen and supply disruptions to the overall business.
Within the company, revenue from automobile sales fell 17.4% y-o-y to RMB965.7 million, whereas revenue from aftersales services declined by 0.6% y-o-y to RMB124.3 million during the quarter.
In the 1QFY2022, the overall Chinese car market declined by 9.3% y-o-y to 4.9 million units and the premium car segment declined by 8.8% to 820,000 units in the first three months of 2022 compared with the same period during the year before.
During the quarter, unit sales of major premium car brands also declined. According to Thinkercar, an automotive consultancy, BMW and Mercedes unit sales each declined by approximately 11% while Audi’s declined by 18.3%.
According to Trans-China Automotive Holdings, the first quarter is traditionally the slowest quarter of the year due to the period after Chinese New Year.
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Sales are expected to pick up in the summer months, where it will increase progressively through the third and fourth quarter.
Currently, the outlook for the remainder of 2022 is unclear due to several factors facing Trans-China Automotive’s business. This is in light of China’s current Covid-19 “dynamic zero” control strategy that has affected sales significantly.
Furthermore, within the automotive sector, higher fuel prices and price increases for electric vehicles (EVs) are affecting consumer demand for both internal-combustion-engine (ICE) cars as well as EVs.
This is compounded by ongoing supply shortages of semiconductors affecting the production and supply of automobiles, making it more difficult to deliver cars to consumers in a timely manner.
Within the same statement, the company says, “we are fortunate that TCA is in a strong position to withstand the current headwinds. Being well-funded, the group will continue to seek out new growth opportunities in a disciplined manner, and our growth strategy remains fully intact as we weather the current turbulence.”
Shares in Trans-China Automotive Holdings closed flat at 21.5 cents on May 6.
Photo: Trans-China Automotive
