The Chinese automotive supply chain is still in the process of adjusting its inventory. Nevertheless, the third quarter is the traditional peak season for the automotive industry, which raises concerns about the impact on related supply chain operators' performance. In response to this, Hiroca Holdings, a company that manufactures and sells automobile accessories in China, stated that the demand for Chinese domestic brands is still strong, and their performance in the third quarter has been supportive, with a positive outlook for future momentum.
Hiroca shared its observations on the current situation of new car sales in China. In September, a total of 12 car manufacturers delivered over ten thousand new energy vehicles (NEVs), and the trend of NEVs gradually gaining market share is becoming increasingly clear. Additionally, the government and various brand manufacturers have introduced a series of car purchase incentives, which present new challenges to the overall supply chain operation and planning of the automotive industry.
At the same time, according to Nikkei, Mitsubishi Motors is reported to be exiting the Chinese market by the end of September and stopping automobile production in the country. It is n the negotiation stage with its Chinese partner, GAC Group. The main reason behind this move is China's full-scale promotion of EV adoption and the increase in the attractiveness of local enterprise brands. Consequently, including Mitsubishi, Japanese car manufacturers have faced dwindling sales and are engaged in tough competition.
It's worth noting that several Chinese NEV manufacturers reported positive car deliveries and sales volumes in September. Among them, GAC Aion achieved sales of over 50,000 vehicles, and Li Auto's car deliveries surged by over 200%. Other so-called 'second-tier' car manufacturers like NIO, XPeng, and Zeekr also performed well.
While Hiroca's short-term performance has been affected by the changing environment, it has been strengthening its product development, optimizing production efficiency, flexibly adjusting production bases, and expanding its overall order execution capacity in recent years. This is expected to help create overall operational benefits. It anticipates a rise in demand from major customers and aim to show good growth momentum.
Furthermore, Hiroca has received new orders for self-developed Mini LED integrated with patented films for automotive lighting and aesthetic system development from clients such as Honda and BYD, which will contribute to its long-term business performance. Hiroca's future products will focus on production line upgrades, electronic integration, and automation to enhance production efficiency. Additionally, it has a positive outlook on the trend of future NEVs, which will help boost the penetration rate of its new products in customer new car models, providing a positive boost to operations.
Hiroca reported consolidated revenues of NT$502 million in September, NT$1.439 billion for the third quarter, and NT$ 4.109 billion for the period from January to September 2023. This represents a 26% decrease compared to the same period in 2022. The remainder of the year remains challenging in terms of operations, and it is striving to meet or exceed the level of business performance achieved in 2022.
