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the list of china's top 500 companies in 2024 was officially released a few days ago. specifically in the automotive and related supply chain and sales fields, more than 26 companies made the list, includingautomakers such as saic, faw, byd, gac, geely, and chery, as well as related supply chain companies such as catl, wanxiang, and joyson electronics。

it can be seen that as new energy vehicles gradually become the mainstream of the market, new energy-related automobile companies and supply chain companies have developed rapidly this year. although the automobile companies entering the top 500 are still the same old faces, the specific situation has changed a lot.

facing byd's challenge, saic still ranks first

chery has the fastest growth due to exports

the top three automakers, saic, faw and byd, all achieved revenues exceeding 500 billion yuan.。

as the largest automaker in china,saic continues to rank 29th among the top 500 chinese companies in 2024 with a revenue of 744.7 billion yuan in 2023, the highest ranking among automakers.saic motor has been ranked first in terms of revenue and sales volume for 18 consecutive years despite facing severe market challenges. however, saic motor's ranking dropped by 3 places compared with last year, because its revenue in 2023 only increased by 0.09% year-on-year, which actually reveals saic motor's hidden worries.

although faw ranks second among automakers with a revenue of 633.5 billion yuan,the company most likely to challenge saic's position as the top chinese automaker is actually byd. byd's revenue in 2023 reached 602.3 billion yuan, and it quickly rose from 65th to 39th on the overall list.moreover, byd's growth potential is still very large because new energy continues to maintain a high growth trend.

since july this year, the sales of new energy vehicles have surpassed that of fuel vehicles, which has put saic, which relies on joint venture fuel vehicles, and byd, which focuses on new energy, in a very different market situation. we can get a glimpse of this from the financial reports released by the two companies in the first half of this year.

according to the financial report for the first half of 2024 released by saic, saic experienced a decline in both sales and revenue.the cumulative wholesale volume in the first half of the year was 1.827 million vehicles, a year-on-year decrease of 11.8%, and the total revenue was 284.69 billion yuan, a year-on-year decrease of 12.8%.

among saic's three major sales pillars, only saic volkswagen was relatively stable in the first half of 2024, with sales of 512,000 vehicles, a year-on-year increase of 1.75%. saic passenger car sales were 334,000 vehicles, a year-on-year decrease of 18.49%. saic gm suffered the worst, with sales of 225,000 vehicles, a decrease of 49.98% from the same period last year, and sales were halved.

saic is facing a more serious problem: a sharp drop in profits. in the first half of the year, saic's net profit was 6.63 billion yuan, which seemed to be only down 6.5% year-on-year, but after deducting non-recurring income, the profit was only 1.02 billion yuan, down 82% year-on-year. separating the first and second quarters, saic actually had a net profit of 2.12 billion yuan in the first quarter, but lost 1.1 billion yuan in the second quarter. in other words, as the penetration rate of new energy vehicles gradually increases, saic is facing an increasingly difficult situation.

according to the financial report released by byd, the revenue in the first half of the year reached 301.127 billion yuan, a year-on-year increase of 15.76%, of which the revenue from automobile-related business was 228.317 billion yuan, a year-on-year increase of 9.33%. according to the data from the china passenger car association, byd's wholesale volume in the first half of the year reached 1.607 million vehicles, a year-on-year increase of 28.8%.byd auto's revenue and sales have gradually approached saic, and it maintained a 30% growth rate in the first two months of the second half of this year. as one grows while the other shrinks, the challenges facing saic are becoming increasingly huge.

among the mainstream domestic automakers, chery has the fastest ranking increase, ranking 100th on the overall list, up 76 places from last year. chery also entered the fortune global 500 list for the first time this year, ranking 385th.

in 2023, chery's revenue reached 315.1 billion yuan, a year-on-year increase of 50.4%, and its automobile sales reached 1.881 million units, a year-on-year increase of 52.6%. among them, automobile exports doubled, surging 101.1% year-on-year, and the export volume reached 937,000 units, accounting for half of the group's sales.

and,chery has also grown rapidly this year, with revenue reaching 277.77 billion yuan in the first half of the year and sales reaching 1.1 million vehicles, up 48.4%, of which 532,000 were exported. in the first eight months of this year, chery's exports exceeded 1.8 million vehicles, doubling last year's full-year exports., can be regarded as a model student of the "external roll" of chinese auto companies. chery's revenue target this year is to reach 500 billion yuan.

huawei leads the pack in r&d investment, while byd is the only automaker in the top 10

from the changes in the rankings and revenues of the top 500 companies, we can see the impact of the rise of new energy vehicles on the automotive industry. in fact, the new energy boom is an equal opportunity for all automakers. why some automakers can seize the electrification and intelligentization needs brought about by the new energy wave can actually be seen from the r&d investment of automakers.

among the top 10 companies in terms of r&d investment released by the 2024 top 500 chinese enterprises, only huawei and byd are related to the automotive industry.

huawei is far ahead of other companies with its r&d investment of 164.7 billion yuan, and its r&d ratio of 23.3% of revenue is even more outstanding.in the automotive bu sector alone, huawei has invested a total of us$3 billion in r&d by 2022, and a total of rmb 30 billion by 2023. in other words, huawei's automotive bu r&d expenses in 2023 alone will be nearly rmb 10 billion., which is higher than the r&d expenses of many vehicle companies. it is not difficult to understand why huawei has been "far ahead" in cockpit and intelligent driving all day long as it has just entered the automotive supply chain.

byd is the only vehicle manufacturer on the list, with r&d expenses reaching 39.6 billion yuan.this year, the investment in research and development has increased significantly, reaching 20.2 billion yuan in the first half of the year, a year-on-year increase of 42%., exceeding the profit of 13.61 billion yuan in the same period. with nearly 110,000 r&d personnel, it is the company with the highest r&d investment among a-share listed companies.

the huge investment in research and development has also enabled byd to establish its current voice in the field of new energy vehicles. its mainstream products include the economical dm5.0 and blade batteries, its high-end products include yi sifang, yi sanfang, dmo, yunnian and other technologies, its smart cabin has dilink, and its intelligent driving dipilot "eye of god" is currently mediocre, but there is an intelligent driving r&d team of more than 4,000 people working hard to catch up, and i believe they will continue to work hard to catch up in the future.

the technological advantages are also reflected in sales. byd has continued to deliver high growth in the past two years. from january to august this year, the cumulative sales volume reached 2.318 million vehicles. as long as the current growth rate is maintained in the next four months, it is expected to achieve the annual sales target of 4 million vehicles set at the beginning of the year.

however, byd's growth was achieved to a certain extent by rapidly lowering product prices. byd's financial report shows that the average price of a single vehicle dropped from 166,000 yuan per vehicle to 142,000 yuan per vehicle in the first half of this year. although the "cabbage-like" market share reached 14.1% in the first half of the year, the highest among all automakers, for automakers, only by building a product matrix that is competitive in high, medium and low-end products can they be called mature automakers. byd's targets are volkswagen, toyota and hyundai.

of course, this is when we look at byd from an international perspective. in the domestic market, the average price of its vehicles has exceeded that of joint venture brands such as volkswagen and toyota.the gross profit margin of automobile-related businesses even increased by 3.2% to 23.9% in the first half of this year, even though the average price of each vehicle decreased, exceeding that of high-end brands such as ideal and tesla.。

the reason for byd's high profits is not only that high sales volume allows for fuller utilization of production capacity and more full play of economies of scale, but more importantly, byd, with huge r&d investment, has a vertical industrial chain system covering raw materials, parts production, and vehicle manufacturing. in particular, it has mastered the most critical new energy technologies such as batteries, electronic controls, and semiconductors, giving it a great cost advantage over other automakers.

in fact, except byd,another fast-growing automaker, chery, is also a beneficiary of high r&d, with its r&d investment reaching 20 billion yuan in 2023., and another 100 billion yuan will be invested in research and development within five years starting from 2023. in addition, we can also see that car companies with excellent performance in the new energy field, such as geely, zeekr, ideal, and weilai, have not been stingy in r&d expenses, and even higher than some of the top 500 car companies on the list. this may also be the key to their high growth.

final thoughts

new energy may have changed the demand of the automobile market, but it has not changed the underlying logic of the industry - that is, products speak for themselves. whoever can come up with products that meet the current market demand will have more opportunities.

in the past, the advantage of joint venture brands was that they could rely on mature foreign products and processes. as long as they were directly imported into domestic production, they could have an experience and quality that exceeded that of independently developed products. however, as the chinese market shifts toward electrification and intelligent demand, this model is difficult to succeed. so we can see that both luxury brands like bmw and mainstream brands like volkswagen have been strengthening their local r&d capabilities in china in recent years.

whether you are successful now is not determined by what you are doing now, but by what you were doing three or five years ago. the success of independent brands such as byd and chery is the best return on their long-term investment.