Core Insights - Autohome Inc. is experiencing a fourth consecutive quarter of revenue decline, primarily due to a significant drop in gross margin and challenges in the overheated Chinese car market [2][12][15] Revenue Performance - The company's revenue fell by approximately 6% in the second quarter, amounting to 1.76 billion yuan ($245 million), down from 1.87 billion yuan a year earlier [12] - Advertising services revenue plummeted by 36% year-on-year, as major customers reduced marketing budgets amid ongoing price wars [3][8] - The online marketplace segment was the only area to report revenue growth, increasing by 21% to 746 million yuan, while leads generation services revenue declined by 11% to 733 million yuan [4][12] Gross Margin and Profitability - Autohome's gross margin decreased by over 10 percentage points to 71.4% compared to 81.5% a year earlier, attributed to higher transaction costs in lower-tier cities [13] - The company reported a 22% drop in profit, falling to 399 million yuan from 510 million yuan a year prior [14] Market Conditions and Future Outlook - The Chinese car market is facing significant challenges, with new car sales rising over 10% in the first half of the year, but average selling prices likely declining due to price wars [6][7] - Autohome has launched an international version of its website to tap into the global market, featuring over 1,900 vehicle models from 52 Chinese brands [10][11] - Executives expressed cautious optimism about potential improvements in the second half of the year, contingent on the stabilization of the economy and an end to price wars [15]