Chinese autos marketplace Bitauto (NYSE: BITA) was buffered by turbulence from a weak Chinese autos sector in Q2 2019, with total revenues up just 8.9%, to 2.79 billion RMB ($390 million U.S.)
CFO Ming Xu stated that the company expects to revenues to further slip in Q3, with estimates ranging from a 2.8% decrease to a 0.9% increase year-over-year in the coming quarter. According to the China Association of Automobile Manufacturers, China’s total sales of new passenger vehicles decreased by approximately 14.3% year-over-year in the second quarter of 2019.
According to CEO Andy Xuan Zhang, based on data from Questmobile, in July 2019, DAUs for Bitauto media app increased by over 200% compared with October 2018. Costs associated with acquiring new mobile users resulted in a 17% jump in cost of revenue however, putting a damper on the company’s bottom line, with profits up just 3% year-over-year.
The overhauled app now boasts high-definition AR and VR showrooms for more than a thousand models — something the company thinks will help it tap into younger users. To this end, more avenues for social interaction between users have been built in. “Posts and the comments will be a big battle in this field,” Zhang said back in March.
Bitauto surpassed 10 billion RMB ($1.5 billion U.S.) in annual revenue in FY 2018 — the first time that the company had reached this mark. Transactions services brought in 5.4 billion RMB — up 50 percent year-over-year.
Bitauto’s autos financing subsidiary Yixin reported total revenues of 1.5 billion RMB ($218.5 million U.S.) during the quarter. At quarter-end, Yixin’s accumulated total financed automobile transactions reached around,1.4 million and its accumulated aggregate auto financing amount exceeded 100 billion RMB.