Research On The Causes Of Bond Default Of Chinese Automobile Enterprises

As an important part of China’s capital market,bond market has achieved rapid development after 30 years of reform and opening up.Under the dual protection of rigid payment and implicit guarantee,China never defaulted on bonds in the early stage.Until the "11 Chaori Bonds" default event in 2014,bond default officially entered China’s capital market.With the rapid development of the bond market in recent years,the types of bonds are increasing and the issuance scale is increasing year by year,leading to frequent bond repayment crises and a significant increase in the occurrence frequency of material default.By 2020,although the number of newly defaulted issuers in China’s bond market and the number of matured defaulted bonds declined compared with the previous year,the amount of matured defaulted bonds was more than that of last year.Therefore,bond default is still a key concern in China’s capital market at this stage.At the same time,in view of the deep transformation of the automobile industry in recent years,and in 2020,a number of enterprises in the industry will appear bond default events.Therefore,this paper selects LF Company,a private listed company,as a case study,aiming to explore the causes of corporate bond defaults in the automobile industry and summarize the experience and inspiration in preventing default risks.This paper mainly uses literature analysis method,statistical analysis method,case analysis method and comparative analysis method,and selects LF Company,a listed private company in the automobile industry,as an example for case analysis,according to the characteristics of new default subjects in 2020.Firstly,literature review and theoretical basis of this paper are introduced by literature analysis method.Secondly,using statistical analysis method to sort out the development history of China’s bond market and statistics the default situation,summed up the default of the macro reasons;Then statistics the automobile industry in recent years occurred the situation of bond default and summed up the industry common factors;Then the case analysis method is used to describe the background and general situation of the case,and then the reasons for the default are analyzed in the following ways.First,the overall background of economic operation and the development of the bond market under the current system are analyzed from the macro level.Secondly,from the industry level,combining with the inherent financing risks and business characteristics of the auto industry,it summarizes the high default risk in the industry.The third is to analyze the characteristics of enterprises in strategy,governance,finance and internal control from the enterprise level.At the same time,the comparative analysis method is used to select the average value of listed companies in the same industry as the reference to find out the unique causes of corporate default.Finally,this paper puts forward corresponding preventive suggestions from the perspectives of supervision,rating,investors and issuing subjects.The research significance of this paper lies in the process of revealing the occurrence of corporate bond default risk,to help corporate managers to have a certain understanding of reducing the risk of bond default,so as to make the management strategy adjustment more scientific;It also aims to increase the attention of regulators,rating agencies and investors to bond default and risk prevention awareness.