This week CBIA (China Bearing Industry Association) released the results of the bearing industry in China in the first half of 2012. These data show that, due to falling demand growth slowing corporate profits, and inventory levels increased significantly.
In the 1st half of this year, China’s bearing industry, analysts say, hesitated at the bottom. Largest bearing company reported a decline in sales and income. For example, a large manufacturer of bearings Xiangyang automobile bearing Co., Ltd (brand ZXY) reported a net loss of 700 million yuan for the first two quarters, while Zhejiang Tianma Bearing Co., Ltd. (trademark TMB), many financial indicators collapsed by up to 50%
According to the CBIA, in the first half of this year, total gross profit national manufacturers of bearings has reached 1.45 billion yuan, a decrease compared with the same period last year to 41.87%, while inventories increased from 4.7 billion yuan to 5.23 billion yuan or 11.30%. The main reasons for this situation are called industrial decline and negative trends at the micro and macro level.
We asked to comment on the situation in the domestic market in China bearing Ms. Li *, a representative of one of the Chinese OEM-bearing manufacturers. Here is what she said:
“The country has seen the poor economic situation. Tax cuts, which the government claims it does not help. To get rid of stocks of the companies have already slashed prices. But lower prices with no end we can not, because in the future the money can not produce high-quality bearings and maintain high-quality staff. Large orders are there, but are difficult to load the production lines, leading to increased costs and the cost of all products. We can produce high precision bearings, then repeat what the government agencies, but the demand is zero. Everyone needs – a low price! “
* The real name and the information of the company is not identified upon request of Ms. Li.