Research On The Impact Of Government Subsidies On The Financial Performance Of JH Automobile

In recent years,the growth of China's automobile production and sales has slowed down gradually.According to the latest data released by the Ministry of Industry and Information Technology,in 2018,the national automobile production and sales decreased by 4.2%and 2.8%respectively compared with the same period last year,and the sales had its first decrease in nearly 28 years.In the overall downturn of the automobile market,however,the production and sales of new energy vehicles have maintained a sharp growth rate,and the development space and market potential are tremendous.For the purpose of promoting the development of China's local automobile industry and accelerating the strategic transformation of traditional automobile enterprises to new energy vehicles,the government has issued a series of subsidies and policies as support.As an independent automobile brand,JH Automobile's obtains a large amount of subsidies from the government every year.To a large extent,its achievement relies on the subsides.With the frequent occurrence of fraudulent new energy vehicle subsidy for automobile enterprises recently,people began to question the government's role in the development of automobile enterprises is positive or not.This paper consists of six parts.The first part puts forward the research background and significance,combs the research results·of domestic and foreign scholars on the effect and· causes of government subsidies,and points out the research ideas and innovative points.The second part elaborates the basic concepts of government subsidies,new energy vehicles and financial performance,and introduces the theoretical basis of The Market Failure Model,Spillover Effect and Government Intervention Theory.The third part introduces the subsidy situation of the automobile industry and the basic situation of JH automobile,and analyses the status quo of JH automobile's government subsidy and financial performance.In the fourth part,from three aspects of profit,cash flow and financial performance indicators,the relevant data of government subsidies from 2013 to 2017 are excluded to study the impact of government subsidies on JH automobile financial performance.The fifth part puts forward suggestions on how to improve the financial performance of JH automobile.The last part summarizes this paper and points out the shortcomings,and makes a prospect for the future research on the impact of government subsidies on the financial performance of the automobile enterprises.The innovative part of this paper is the author took new energy vehicle subsidy as a kind of government subsidy and analyzed it as a component of the company's sales of operation based on the updated government guidance.At the same time,by excluding the government subsidy from the selected financial performance indicators,the paper draws the conclusion that the government subsidy is conducive to improving the financial performance of JH automobile,and puts forward suggestions to improve the financial performance of JH automobile,which can provide reference for how to improve the financial performance of automobile enterprises,promote their own development and transformation under the huge subsidy.