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Recently, the car market has blown a wind of price reduction, fuel vehicles and new energy vehicles are involved, and the number of participating car companies and price reduction models is more than before. However, experts pointed out that the auto industry is related to the local economy and regional stable development, and the "suicide" price war of car companies will not last. Now that the automotive market has entered an era of innovation-driven competition, car companies must not only study price strategies and brand strategies, but also rely on technological innovation to create their own product systems and competitive patterns.

From the beginning of Tesla's announcement of price reduction, to the recent opening of the "strongest" car purchase subsidy season in Hubei, up to now, nearly 100 models have joined the price war, fuel vehicles, new energy vehicles, independent, joint venture, sole proprietorship and other brands have participated, the price reduction range from several thousand yuan to hundreds of thousands of yuan. For a time, a wave of price cuts in the car market is sweeping the country.

What is the reason for this price reduction to be so strong and involve such a wide range of car companies? What is the impact of this price reduction tide on the car market? Recently, a reporter from the "Workers' Daily" conducted an investigation and interview.

The tide of price cuts in the car market is coming

At the beginning of this year, Tesla took the lead in kicking off the prelude to the price war, and then the Cialis AITO brand also followed up to reduce the price by about 3,1 yuan, and on January 17, Xpeng Motors officially announced an overall reduction of 2,3 yuan ~ 6,<> yuan. This spark from new energy vehicles has quickly transformed into today's general trend.

In March, Hubei provincial government departments and car companies launched the "strongest in history" government-enterprise joint subsidy Dongfeng brand. A Dongfeng Citroen C3 originally priced at 21,19 yuan, after the comprehensive subsidy of 6,9 yuan from government and enterprises, only needs 12,19 yuan; China FAW launched the "Qihui Jilin - 6 million yuan limited-time subsidy" activity for consumers in Jilin Province, and FAW Audi's A8L has discounts of up to 3,10 yuan in multiple stores, and all series have existing cars; On March 4, Changan Automobile's Changan Deep Blue maximum comprehensive subsidy reached 2,6800 yuan, a day ago, BYD launched an order deduction for the Song PLUS car series and seal, disguised as two popular models directly reduced the price by 8800,<> yuan and <>,<> yuan...

The reporter learned from a number of Dongfeng Citroen dealers in Chongqing that Chongqing is also reducing prices, of which C6 can be discounted by up to 5,3 yuan, and many stores have no existing cars. The price cuts of some regions and brands have triggered a chain reaction in the car market, and the price competition in the car market in March was extremely fierce. The reporter learned from a number of Mercedes-Benz stores in Chongqing that many models in the store have discounts of about 5,7 yuan, and the highest discount can reach 10,7 yuan. BMW stores said that the maximum reduction rate for new energy vehicles is <>,<> yuan, and the maximum reduction rate for fuel vehicles is <>,<> yuan.

Why have car companies reduced prices?

The reporter noted that the recent wave of price reductions in the automotive industry is different from the past, with fuel vehicles and new energy vehicles participating, and the number of participating car companies and price reduction models is more than before.

"Such a big effort is also because of government subsidies." A staff member of a Dongfeng Citroen 4S store in Chongqing said that Dongfeng is now experiencing transformation and sales difficulties, otherwise it would not use the radical promotion method of reducing prices across the series.

In addition, an industry insider pointed out the deep-seated reasons behind the price reduction of fuel vehicles. He said that the China VIB policy, known as the "world's strictest emission standard", will be implemented in the second half of this year, which ignited the final fuse for large-scale destocking of fuel vehicles. Once the new standards begin to be implemented nationwide, models that do not meet emission standards cannot be sold, registered and licensed, which means that some old models of fuel vehicles are facing elimination. For fuel vehicle companies, selling at a reduced price now is undoubtedly the best way to reduce losses.

Affected by the epidemic and the Spring Festival, the inventory of fuel vehicles in the early stage is already at a high level. According to statistics from the China Automobile Dealers Association, the inventory warning index of domestic auto dealers was 1.60% in January and 8.2% in February, both above the 58% boom and bust line. According to the statistics of the Passenger Vehicle Market Information Joint Committee, the domestic retail penetration rate of new energy vehicles in February this year was 1.50%, an increase of nearly 2 percentage points from the previous month, and the proportion of new energy vehicles continued to rise, making the sales of fuel vehicles worse.

Therefore, the above-mentioned industry insiders believe that in the withdrawal of the policy of halving the purchase tax of fuel vehicles, the imminent implementation of the National VI B emission standard, the continuous impact of new energy vehicles, and the overall sluggish car market, fuel vehicle companies can only "stay in the green mountains, not afraid of no firewood", through price reduction promotions to survive and eat more market share.

In terms of new energy vehicles, in this price war, Tesla and BYD are more of the dominant parties, and they have more control and initiative over price reductions. Taking Tesla Motors as an example, its gross profit margin was 28.5% last year, while the average profit margin of the entire industry was roughly in the range of 8% to 10%, Tesla's cost advantage is extremely large, and the room for price reduction is also the largest.

Tesla took the lead in sharply reducing prices, so that the new energy vehicle companies that had just looked forward to "returning to blood" had to turn around and reduce prices, resulting in the rapid transformation of the business strategy of new energy vehicle companies from "ensuring profits" to "maintaining share".

The person in charge of a new energy vehicle company said that price cuts may not necessarily increase sales, but they can hit opponents. "The demand side is under pressure, and many new energy vehicle companies seek to exchange price for volume. Unexpected price cuts will put other new energy vehicle brands under great pressure on their own pricing. Chen Xueqin, executive vice president of Chongqing Automobile Commerce Association, said.

What is the impact on the car market?

"I originally saw Chang'an Deep Blue, but now that the price has been reduced, I have begun to hesitate because there are more and more choices." At the Changan Automobile 4S store in Chongqing, Mr. Zhang, who was watching the car, told reporters, "Don't be in a hurry, wait and see." ”

The wait-and-see effect brought by the price reduction cannot be underestimated, originally a car of 10,5 yuan, a month to sell 9,4 vehicles, now the price war is so that consumers dare not buy, down to <>,<> yuan but may only sell <>,<> vehicles.

"In the current automotive industry, whether traditional or new, in the face of the industry competition of the 'red sea', 'difficult' has become the norm for everyone." Guo Gang, a professor at the School of Mechanical and Vehicle Engineering of Chongqing University, said that some traditional auto parts suppliers that mainly produce various structural parts have relatively low profit margins. Once the price of the whole vehicle falls, the profits of suppliers will be further compressed, and coupled with their own insufficient financing capacity, they may face a more difficult situation.

Chen Xueqin believes that extraordinary price cuts will break the stable business expectations established by the industry in the past, thereby affecting the normal operation of commercial links such as stocking, inventory and logistics.

In this regard, experts pointed out that the automobile industry is related to the local economy and regional stable development, and the "suicide" price war of car companies will not last. In the view of Cui Dongshu, secretary general of the Passenger Association of China, the unprecedented preferential car purchase subsidy policy of the enterprise and the government is only a temporary promotional activity like "Double Eleven".

Mo Yuanming, a professor at Chongqing Technology and Business University, believes that now that the automobile market has entered an era of innovation-driven competition, car companies should not only study price strategies and brand strategies, but also rely on technological innovation to create their own product systems and competitive patterns, which is a long-term solution.

Li Guo