In January of this year, Tesla took the lead in "leading the war" and set off a wave of price cuts in China's new energy vehicle market through "massive bloodletting".
Turning around in March, the French gentleman Citroen directly "turned the table" and sacrificed the C6 of 120,000 yuan and the C3-XR of 50,000 yuan. This time the market and consumers are boiling, and even the car companies are crazy They have come up with subsidies of 100 million yuan, 10 billion yuan and other discounts, proving that they have participated in the war with practical actions.
Up to now, more than 40 car companies and nearly 100 models have participated in the "big sale", ranging from a few thousand yuan to more than a hundred thousand yuan.
All car companies cut prices together, and some people "buy one get one free"
The wave of price cuts came unexpectedly. At the same time, the magnitude of price cuts and the wide range of brands involved are basically unprecedented.
The specific reason is that in early March, in order to stimulate the local economy, Hubei Province jointly launched a new round of price reduction promotions with many car companies in the jurisdiction. In this event, Dongfeng Motor Group, which is located at the home court in Wuhan, naturally responded most positively, so The "broken fracture" C6 and C3-XR models were launched, which made the 4S stores that were previously sparsely populated all of a sudden become popular, and the stock cars were sold out in an instant.
Some netizens ridiculed that the 210,000 Citroen C6 is full of problems, and the 120,000 C6 is flawless, even if there are problems, it is their own problem.
Affected by Hubei Province and Dongfeng's "smash the market" promotion, various auto brands have also taken action.
On March 8, China FAW launched the "Flag Benefit Jilin - 100 million yuan time-limited subsidy for the people" campaign for consumers in Jilin Province.
The scope of this subsidy covers all self-owned and joint venture brand passenger cars and light trucks under China FAW, with a total subsidy of 150 million yuan and a maximum of 37,000 yuan per vehicle.
Immediately afterwards, group car companies such as Changan Automobile Group, SAIC Motor, and Chery Automobile Group, as well as individual brands such as Wenjie and Beijing Hyundai also followed up.
Among them, Chang'an Automobile released the "Ten Billion Huimin Car Purchase Season" policy. Anyone who picks up a car (purchasing any model of Changan's passenger car series) between March 1 and March 31 can enjoy an additional thousand yuan Auto coupons; at the same time, Changan Automobile will give cash subsidies to users in accordance with the corresponding policy standards for related auto consumption subsidies introduced before April 30.
SAIC Motor not only launched special discounts covering Roewe, MG, Buick, Cadillac and other brands in Hubei Province, but also launched a nationwide subsidy campaign for all Chevrolet series. Consumers can enjoy a subsidy of up to 70,000 yuan.
Chery Automobile Group also released the "Ten Billion Huimin Car Purchase Season" campaign, involving brands including Chery, Jietu, Chery New Energy, etc., with a maximum subsidy of 42,888 yuan.
In addition to self-owned brands, joint venture brands, and some second-tier luxury brands, BBA is also somewhat "unable to sit still".
According to Chinanews.com, the discounts for Mercedes-Benz C-class and E-class models are about 60,000-70,000 yuan; BMW 3-series and 5-series are about 10 "points"; Audi A4, A6, Q5L and other models are also discounted. Between 60,000 and 70,000 yuan.
What's more, in order to attract the attention of consumers, some 4S stores have launched a "buy one get one free" promotion, including buying Loulan and getting Sylphy, buying Haoying hybrid version and getting Fit, buying bZ4X and getting free Vios etc.
It can be said that the entire Chinese auto market has gone "crazy", and the era of "tens of billions of subsidies" belonging to the Chinese auto market has also arrived.
What are the "suicide" price cuts of car companies?
However, behind the "suicide" price cuts of many car companies, we have also seen some helplessness and industry worries belonging to them.
According to the sales data of the Passenger Federation, from January to February this year, the retail sales of passenger cars in my country were only 2.678 million, a year-on-year decrease of 19.8%. Among them, January fell to a historical "new freezing point", a year-on-year decrease of 37.9% respectively. and 40.4%.
Under such a background, it is really difficult for car companies to survive.
On the channel side, dealers are also under great pressure.
According to the "China Automobile Dealers Inventory Early Warning Index Survey" by the China Automobile Dealers Association, the inventory early warning index of my country's auto dealers in January 2023 was 61.8%, a year-on-year increase of 3.5 percentage points and a month-on-month increase of 3.6 percentage points; the inventory early warning index in February was 61.8%. 58.1%, a year-on-year increase of 2.0 percentage points, and a month-on-month decrease of 3.7 percentage points, both above the boom-bust line, which shows that the auto dealership industry is in a recession.
But if the car cannot be sold, the dealer's funds will not be returned, and it will be difficult to complete the sales task set by the manufacturer to get rebates, so the pressure will only increase.
At the same time, the National VI B emission standard, which will be implemented on July 1, is also considered by many people as a "straw" that overwhelms the brand, which directly led to the "dumping".
According to news on the Internet, my country currently has about 6 million fuel vehicles in stock. Once the National VI B emission standards are implemented, these stock cars will not be able to be licensed.
However, it is understood that after the implementation of the National VI B emission standards, the news that the National VI A models will not be listed has not been confirmed by the authoritative department.
At the same time, some people in the industry said that the implementation of China VI B emission standards actually has no impact on most car companies, because the costs of China VI A and China VI B are similar, and most auto companies are also developing China VI B in one step. product.
Furthermore, the more and more popular new energy vehicles in recent years, especially the rise of plug-in hybrid, hybrid and range-extending power models, are generally considered by the outside world to be the "catalyst" for this price reduction, because the fuel vehicle market It is shrinking year by year, and car companies are facing the transition to new energy tracks, so it is a matter of course to destock fuel vehicles.
Of course, it is definitely difficult to complete this task with the help of major car companies, mainly because subsidies cannot afford it. Therefore, local governments also take this opportunity to stimulate the local economy and achieve a win-win effect for "consumers, car companies, and localities". .
Liu Tao, Director of the Automotive Business Department of Beiqing Media, said: "This price reduction subsidy is actually a means mainly funded by the local government to stimulate consumption in disguise and stimulate the economy, because most of the car companies have state-owned backgrounds behind them. The amount of the subsidy is not large.”
It is not yet known whether the "heating" of the auto market is good or bad
However, opinions in the industry are polarized as to whether the "heating" of the auto market is good or bad, whether it is stimulating the market or overdrafting the market.
Among them, Cui Dongshu, secretary-general of the Federation of Passengers and Passengers, believes that the unprecedented preferential car purchase subsidy policy of enterprises and the government demonstrates the policy determination of major auto provinces to stabilize and promote auto consumption.
The above-mentioned subsidy policies are exemplary, and other provinces are likely to follow suit.
Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, the representative of the opposing party, said: "Adopting a simple price competition strategy is not a long-term solution. Carry out healthy market competition, and work harder on product technology, quality, service, brand power, etc.”
In addition, many industry veterans also said: "Although such a sharp price cut has brought about a surge in sales, in the long run, it will do no harm to the car companies themselves, brands, markets, and second-hand cars."
In fact, the harm of this "price war" has gradually emerged. On the one hand, the price balance between second-hand cars and new cars has been broken, and a large number of second-hand car dealers want to cry without tears. On the one hand, consumers who bought cars before are also dissatisfied, and they have great opinions on the brand.
In addition, the "sequelae" of the price cut have also been transmitted to the stock market, causing a huge shock in auto stocks.
It is understood that on March 10, auto stocks in the A-share and H-share markets fell sharply, and many stocks fell by more than 5% within a day.
Some netizens described it this way, the subsidies enjoyed by the auto market are paid by stockholders.
In addition, for new car manufacturers that are not yet profitable, if this wave of price cuts continues after March, their price system will also be affected to a certain extent, and tomorrow will be even more difficult.
In the short term, the "Double Eleven" in the auto market will undoubtedly have a great effect on stimulating consumption, boosting the local economy, and relieving the pressure on manufacturers and dealers.
But in the long run, endless "price wars" are definitely not a long-term solution, because car companies cannot survive without making money or paying back money, and they cannot continue to invest funds in research and development. In this way, the final damage may still be consumer.
Therefore, what we expect to see is a car market with healthy competition, not a car market that "self-mutilates" and cuts prices at every turn.