The double slump in China's auto market has impacted the component supply chain of Taiwan's stock market. Many manufacturers have suffered losses. Yili Electronics has bucked the trend and grown by relying on overseas markets.
Quick Look
- China's automobile retail sales fell by 18.5% in the first eight months of this year, facing a decline in both sales and prices.
- The Taiwanese components supply chain is highly dependent on the Chinese market.
- Companies such as Yingli-KY, Guanghua-KY, Tongdian Electronics, and Precision have experienced profit declines or fallen into deficits due to large losses in their Chinese subsidiaries.
AI-generated summary
Why It Matters
China is the world's largest automobile market, and many Taiwanese component manufacturers are highly dependent on orders from China. In recent years, China's new energy vehicles have grown rapidly, but this has also triggered a fierce price war. Automakers have passed on the pressure to suppliers, resulting in the compression of component gross profit margins.
[Reporter Gao Jiahe/Taipei Report] China's automobile retail sales fell by 18.5% year-on-year in the first eight months of this year, falling into a "double decline" in sales volume and price. Taiwanese component supply chains that are highly dependent on the Chinese auto market, including Yingli-KY, Guanghua-KY, Tongzhi and Precision, have either experienced declining profits or deep losses. Yili Electronics has been successful in actively expanding the Southeast Asian market, offsetting the risk of relying on a single market. Huangtian has relied on the support of European, American and global export orders to withstand the cold winter in the Chinese market.
According to the consolidated financial report for the first half of 2026, Yingli-KY, which produces metal and non-metal parts for automobile body structures, suffered a substantial loss of 356 million yuan in its core Chinese subsidiary "Changchun Yingli Automobile Industry", and "Foshan Yingli Automotive Parts" also suffered a loss of 157 million yuan. Under the price war in the Chinese auto market, car manufacturers will pass on the pressure of price reductions to upstream suppliers, and Yingli-KY is under considerable pressure.
Guanghua-KY, which specializes in automotive interior parts, saw its main Chinese subsidiary "Dongguan Guangze Automotive Trim Parts" lose 226 million yuan in the first half of the year, and "Dongguan Mono Automotive Trim Co., Ltd." also suffered a loss of 10.15 million yuan. Due to the rise of local Chinese suppliers, the substitution of interior parts has increased, and it is facing the problem of order loss and price destruction.
Tongdian Electronics, a well-known supplier of reversing radar and advanced driver assistance systems (ADAS), was extremely "involved" in the intelligent equipment of China's new energy vehicles. The price of related systems was slashed, and the overall profit turned from profit to loss in the first half of the year. The after-tax net loss reached 149 million yuan; the main subsidiary "Tongyuan Electronic Technology (Xiamen)" recognized a loss of 162 million yuan in the first half of the year; although "Tongyuan Electronic Technology (Kunshan)" still had a slight profit of 19.06 million yuan, it was still unable to make up for it.
Accurate has entered the new energy vehicle battery box market in recent years and was originally expected by the market. However, the overall after-tax net profit in the first half of the year was only 8.99 million yuan, a significant decrease from the 133 million yuan in the same period last year. Most subsidiaries in China have fallen into losses, such as "Dongtai Jingjiuwang Cemented Carbide" with a loss of 40.71 million yuan, "Hubei Precision New Energy" with a loss of 21.73 million yuan, and "Guangzhou Precision New Energy" with a loss of 16.89 million yuan.
Yili Electronics, which produces head-up displays (HUD) and car audio-visual navigation hosts, has a net profit after tax of 202 million yuan in the first half of 2026, a significant increase from 72.93 million yuan in the same period last year. Although the Chinese subsidiary "Yili Electronic Technology (Jiangsu)" suffered a loss of 36.37 million yuan due to the impact of market involution, Yili Electric's "Thai Yili" made a huge profit of 237 million yuan in the first half of the year, which not only completely made up for the losses in the Chinese market, but also drove the group's profits to a new high.
Huangtian, one of the world's top three automotive roller shutter manufacturers, has a very high market share and economies of scale for its products in the world. It still has good bargaining power when faced with price reduction pressure from Chinese car manufacturers. In the first half of 2026, Huangtian's overall net profit after tax was 184 million yuan, which was better than the 157 million yuan in the same period last year. Its important subsidiary "Kunshan Huangtian Auto Parts" still contributed steadily to a net profit of 40.76 million yuan in the first half of the year, mainly due to stable support from European, American and global export orders.
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What to Watch
AI outlook — possibilities, not facts
Yili Electric will continue to increase investment in Southeast Asia to consolidate its growth momentum in overseas markets
Likely · Within months
Huangtian will continue to rely on European, American and global export orders instead of increasing its presence in the Chinese market
Likely · Within months
Open Questions
- When will China’s car price war ease?
- How will Taiwanese component manufacturers adjust their production capacity layout to reduce their dependence on the Chinese market?
- Can the Southeast Asian market become the second growth engine of Taiwanese manufacturers in the long term?
