Cui Dongshu: Auto industry profits fell to a four-year low under the double impact of rising costs and weak demand
The Zhitong Finance App learned that Cui Dongshu, Secretary General of the Passenger Transport Association, published an article saying that the automobile industry is facing the double pressure of rising costs and weak demand, and profit performance is poor. From January to September 2026, automobile production was 23.37 million units, down 4% year on year, revenue of 8043.5 billion yuan increased 2.6%, cost of 7162.7 billion yuan increased 3.8%, profit of 267.5 billion yuan decreased 23%, and sales margin 3.3%; of these, automobile production in September was 3.06 million units, sales revenue of 1037.4 billion yuan increased 0.6%, cost of 9257 billion yuan increased 2.5%, profit of 14.2 billion yuan decreased 68%, and sales margin 1.4%, which is at a low level in the past 4 years.
Cui Dongshu pointed out that in 2026, various regions will vigorously promote the implementation of the “two new” policies to gradually and effectively release the vitality of domestic demand, but the improvement in efficiency in the automobile industry clearly lags behind other consumer goods. As the country's anti-domestic countervailing efforts continue to advance, the automobile industry is being severely squeezed upstream. The price problem is serious. Oil prices have skyrocketed, profits from non-ferrous metals and semiconductors have skyrocketed, end users have a serious wait-and-see mentality when buying cars, the operating pressure on car companies continues to increase, and high-quality development has been greatly impacted upstream.
Judging from sales margin trends over the years, the profit performance of the automobile industry has weakened in 2024. The sales margin was only 4.3%, a sharp drop from the historical normal level; in 2025, the industry's sales margin fell to 4.1%. The industry's sales margin fell further to 3.3% from January to September 2026, and 1.4% in September, lower than the lowest monthly performance of 1.8% in December 2025. September of previous years was generally a time when profit margins were low. Fuel vehicle production and sales pressure was high in September of this year. Coupled with the Mid-Autumn Festival factor, profit pressure is still huge.
In January-September, overall industrial enterprise unit costs were under high pressure. Memory has skyrocketed, the price of lithium carbonate has doubled, commodity prices are running high, and the pressure on raw material costs in the middle and downstream industries has increased. From January to September, the overall bicycle revenue of the automobile industry chain increased by 5.8% to 344,000 yuan (with repeated calculation of the industry chain), bicycle costs increased by 306,000 yuan, 7%, bicycle taxes and fees of 26,000 yuan increased by 7.2%, and the gross bicycle profit of the industrial chain of 11,000 yuan decreased by 21%.
From January to September, the revenue of industrial enterprises above scale was 106.21 trillion yuan, up 6.6% year on year. The industry showed a differentiation trend of “strong new momentum and pressure on traditional industries”: the revenue of computer communication electronic equipment exceeded 14.9 trillion yuan, a year-on-year increase of 19%, contributing the largest year-on-year increase. It is an absolute growth engine. Electrical machinery, non-ferrous metal smelting, and automobile manufacturing also grew steadily, forming an important support; while negative smelting of ferrous metals and agricultural and sideline food processing grew steadily, forming an important support; while negative ferrous metal smelting and agricultural and sideline food processing grew year on year, and traditional year-on-year growth was significant and marginal. High energy consumption and some consumer goods The industry's revenue is under pressure. The overall high-tech manufacturing industry is driving revenue expansion but the recovery is uneven. We need to pay attention to the downward pressure on traditional industries.
Combined with the background and profit table, industry profits from January to September showed a differentiated pattern of “leading electronics, driven by consumption and energy, and pressured by traditional manufacturing”: computer communication electronic equipment profit of 985.2 billion yuan, a year-on-year increase of 100%, contributing to the biggest increase. Refined tea, alcoholic beverages, refined tea (+205% year-on-year increase in the same month), coal mining, non-ferrous metal smelting, etc. also increased dramatically, driving overall profit improvement; while electricity and heat production (-17%), electrical machinery (-7%), and automobile manufacturing (-23%) profit declined markedly. High energy consumption and some equipment, Profits in the automotive industry are under pressure, and overall profit growth depends on a few booming industries.
Specific analysis
1. Revenue and profit structure of various economies
The cumulative revenue of the industry in 2017-2025 remained in the range of 105 trillion yuan to 139 trillion yuan for a long time. The manufacturing industry has always been an absolute pillar, accounting for about 90% of the revenue volume for a long time. In terms of ownership, the revenue scale of joint-stock enterprises led the way; the revenue scale of private enterprises rose steadily, and the volume of foreign companies, Hong Kong, Macao and Taiwan shrank slightly; from January to September 2026, the total volume was 106 trillion yuan, and the revenue of all industries and forms of ownership shrunk in half. Overall revenue rebounded to 7% year-on-year. The manufacturing industry also maintained a 7% revenue growth rate, and recovery efforts were strong.
On the profit and efficiency side, the overall efficiency of the industry fluctuated between 6.2-8.7 trillion yuan from 2018 to 2025, and fell back to 6 trillion yuan in January-September 2026, but the efficiency growth rate rebounded sharply to 16%. Among them, the mining industry increased 38%, and the manufacturing efficiency growth rate reached 17%, becoming the core of profit restoration. By sector, the efficiency growth rate of the mining industry was as high as 38%, and the electricity, heat, and water supply industry turned slightly negative; in terms of ownership, the profit growth rate of joint-stock enterprises led the way by 21%. Profits of state-owned enterprises and private enterprises picked up at the same time. The growth rate of foreign-invested enterprises was only 1%, and the profit recovery efforts of different entities were clearly divided.
Revenue growth in the overall industrial sector has been steady this year, and profit performance has also been relatively divided. Among them, the revenue and profits of state-owned enterprises have fluctuated greatly in recent years. Upstream profits are squeezing downstream, mining companies are performing well, and profit growth is very strong.
2. Changes in revenue and profit structure
At present, state-owned enterprises are performing very well. The share of revenue and profit continues to grow, and the share of profit has reached 32%, an increase of 4 points. The share of profits of private enterprises fell by 6 points to 25%, and the operating profit margin of 4.1% was lower. The decline in profits of private enterprises was quite obvious compared to last year.
K-type differentiation of profit margin indicators for operating income is mainly due to the high index values of the mining industry and state-owned enterprises such as coal, hydropower, etc. The profit margin of private enterprises is very poor. The profit margin of the manufacturing industry accounts for 76%. Excluding semiconductors, there has been a marked decline recently.
Specific industry analysis
1. Profit differentiation in the mining industry
With a high base and rising prices from January to September 2026, mining profits increased by 38%, and there are still very good profits. The profit margin of the mining industry in January-September was also very good at 21.2%.
From January to September 2026, the profit margin of the non-ferrous industry soared to 40.2%, and the profit margin of the petroleum industry to 31.4%. Recently, the profit margin of the petroleum industry has increased astonishingly. Overall mining industry profits remain high. The impact on the downstream is huge.
2. The profit of the water and electricity industry remains high
The profit margin in 2026 is 6%. Electric heating and water is a highly profitable service industry. Among them, the profit margin of the electric power industry is 6.3%, which is high in history. In 2026, the profit of the electricity industry fell by 18%, the profit of the water treatment industry fell by 3%, and the profit of the gas industry increased by 14%.
3. Upstream profit improvement
In 2026, the upstream industry experienced high sales revenue and profit growth, and in particular, the profit margin fell to 3.8%. Among them, sales margins, represented by non-ferrous metals, etc., have gradually reached a high level, and the steel industry's profit margin of 0.4% this year is still poor. The profits of industries such as chemical raw materials and non-ferrous metal smelting are quite good.
4. The midstream profit performance is relatively good
Sales revenue and profit growth in the midstream industry was good from January to September 2026. The sales margin of the midstream industry fell from 6% in 2018 to 4.3% in 2026, and has stabilized recently. Sales margins in major midstream industries have also declined in 2026. The benefits of shipbuilding and railways are good, and profits in the use of waste materials and non-metallic mineral products have increased significantly due to scrapping and renewal subsidies.
5. Gradual improvement of downstream profits
From January to September 2026, the overall profit of the downstream industry increased by 22%, and the profit of the computer communications industry showed an unusually good growth trend of 104%. However, the automobile industry's profit fell 23%, and the sales profit margin was 3.3% (9% in 2014), which is still lower than the overall downstream profit level of 6.7%, and also significantly lower than other downstream companies such as tobacco, alcohol, and pharmaceuticals.
Currently, the main high-profit industries are the tobacco, alcohol, and pharmaceutical industries, and the profits of the alcohol industry are much higher than those of other industries. Profits in the food industry are not strong, but there is also a significant year-on-year increase.