China’s overheated car market is leading Autohome Inc. (ATHM.US; 2518.HK) to look outside for relief, as the country’s largest car-trading services provider tries to jumpstart its growth that began stalling in the second half of last year. Autohome revealed it launched an international version of its website in June, as it reported a fourth consecutive quarter of contracting revenues for the latest three-month period through June.
The company’s advertising services took the biggest hit during the quarter, plunging 36% year-on-year in revenue terms, as carmakers and dealers that are Autohome’s biggest customers slashed their marketing budgets amid a bloody price war that has dragged on for more than a year. Company executives noted the government has taken steps this year to try to ease the price war, optimistically predicting the situation could improve in the second half of the year.
Autohome’s online marketplace was also a small bright spot as the only one of its three main business segments to report revenue growth in the latest quarter. That growth, combined with an 11% slump for the company’s leads generation services, allowed the former to overtake the latter to become Autohome’s biggest breadwinner for the quarter.