Reporter Wu Bofeng Text/Photo

Recently, due to the collective price reduction of many brands under Dongfeng Motor Group in Hubei Province, nearly 50 mainstream car companies in the market have followed suit, and nearly <> models have launched preferential promotions. In a short period of time, a long-lost car market price war quietly began. What profound impact will this unexpected "emergency" have on the auto consumer market? The reporter of "China Consumer News" conducted an in-depth investigation on this.

The price war is coming

"The Dongfeng Citroen C21, which is priced at 19,6 yuan in the market, is only 9,12 yuan after enjoying 19,<> yuan of comprehensive subsidies for government and enterprises." A few days ago, this information about car purchase discounts only in Hubei Province brushed the entire circle of friends and attracted the attention of the national automobile consumer market.

In fact, whether you have any plans to buy a car this year or not, it's hard not to be impressed by the magnitude of the offer.

In this context, Dongfeng Citroen C6 is no longer just a synonym for a model, but more like a "lone brave", refreshing people's cognitive boundaries of mid-level cars in an unprecedented way. Since then, in order to maintain market competitiveness, major car companies have set off an unprecedented scale of price reduction.

Specifically, whether it is a traditional car company that accelerates transformation and development or a new car brand that focuses on intelligent networking, they all choose to open a price war competition mode in Yangchun March.

The reporter did not completely comb and found that nearly 6 models have joined this price war, covering all passenger car segments. FAW Audi's A8L has a discount of about 4,3 yuan in multiple stores; The highest comprehensive subsidy for Changan Automobile's Deep Blue brand exceeded 27,9000 yuan; On March <>, Chery New Energy announced that from now on, Chery QQ Ice Cream, Chery Little Ant and Chery Unbounded Pro three new energy models will be reduced in price, with a maximum discount of <>,<> yuan.

How fierce is the current price war in the auto market? It can be seen from a model of Chery new energy vehicle QQ ice cream. It is reported that QQ ice cream is mainly for users within 5,120 yuan, and the biggest feature of its products is that the market price is low, covering more consumer groups. However, it is such a model with a low market price, in order to further strengthen the cost-effective advantage, it has to choose to adjust the price. Among them, QQ ice cream 3km milkshake, the original market price of 99,4000 yuan, after a discount of 3,59 yuan, the price is 10,<> yuan, the discount range is as high as <>%.

Cui Dongshu, secretary-general of the National Passenger Vehicle Market Information Association, revealed to the "China Consumer News" reporter that the 10% discount range is not easy for a model with a market price of less than 4,<> yuan, which also reflects the unusual nature of the car price reduction.

In the competition of automobile companies for vehicle prices, the focus of all parties in the automobile consumer market is no longer the comprehensive strength of products, nor is it an after-sales service policy closely related to the consumer market, but a close focus on the price of products. The reporter noticed that under the strong price offensive, the Dongfeng Citroen C6, which had a mediocre market reputation, has changed significantly in the consumer market reputation under the condition that the vehicle configuration remains unchanged, such as "cost-effective" and "full of sincerity".

At the moment, lower prices seem to be the only measure of a model's quality. In response to this situation, on March 3, the China Association of Automobile Manufacturers appealed: rational treatment of this round of automobile promotion, the market should return to normal development order as soon as possible, to ensure the healthy and stable development of the automobile market throughout the year.

The China Association of Automobile Manufacturers believes that local governments and enterprises have jointly launched a large-scale promotion policy, aiming to stimulate local automobile consumption. But in fact, most of the preferential models launched by this round of automobile companies are long-term inventory age, old models or slow-selling inventory models, and car companies deal with inventory through price reduction, and proper cost recovery is a normal business measure, but it cannot fall into a price war. Past experience shows that price wars do not last long, and value for money is the eternal law of the auto market.

"As a bulk consumer product, automobiles have an increasingly prominent role in driving the national economy. Because of this, price reductions in automotive products tend to attract more attention from the market. From the perspective of market development law, the competition in the automobile market should be participated by the main body, that is, the automobile enterprise. Wang Du, assistant president of the China Automobile Dealers Association, said in an exclusive interview with the reporter of China Consumer News that it is understandable that automobile companies choose to reduce prices according to their own capabilities, give part of the profits of their products to consumers, or government departments to promote automobile consumption, and give universal and non-discriminatory preferential treatment to automobile consumers across the country. But if a place subsidizes a company's products differently, it is debatable whether this approach is appropriate.

Spillover to used cars

"This year is the first year of the full implementation of China's second-hand car policies, as the second-hand car market recovers its due vitality, it is expected that this year's second-hand car trading volume is expected to hit 2000 million." At the beginning of this year, Luo Lei, deputy secretary-general of the China Automobile Dealers Association, expressed optimism about the development of the second-hand car market.

Considering factors such as the ownership of China's automobile market and the stage of second-hand cars, China's second-hand car market has great development potential. On this basis, coupled with positive factors such as the lifting of restrictions on relocation and the restriction on car dealers selling second-hand cars in their personal names, the industry is generally full of expectations for this year's second-hand car market. However, after only two months, the used car market, which has been significantly improved in the market environment, has encountered a major challenge in the development process.

As the main driver of the growth of the new car market, used cars play an increasingly important role in the automotive market. Unexpectedly, a fierce new car price war has also affected the used car market. As the gap between the market price of new cars and the price of used cars of the same model is narrowing after the preferential treatment of some models, some uncertainties are added to key aspects such as the source of second-hand cars and the number of consumers visiting stores. Wang Du revealed that due to the price changes in the new car market, second-hand car dealers are more cautious when collecting cars, and many consumers who originally planned to buy second-hand cars have also changed their minds.

A second-hand car practitioner who did not want to be named told the "China Consumer News" reporter that after many car companies adjusted prices, the second-hand car market price fluctuated greatly. "After the price of new car products is reduced, it means that the price of the same used car will also change, but many used car dealers buy vehicles before the price adjustment, that is, in the relatively high price range, and now even if it is transferred according to the original price, it is not advantageous." He was blunt.

The reporter learned from the China Automobile Dealers Association that from March 3 to 7, the average daily trading volume of the domestic second-hand car market was 14,5 units, down 91.4% from the previous month and 88.4% from the same period last month, and the average daily trading volume was less than 68,6 vehicles, indicating that the market prosperity has decreased.

The stability of the used car market price depends on when the price war in the new car market will end. How the auto market returns to normal as soon as possible deserves continued attention.

The wait-and-see mood is stronger

"I originally planned to buy a car in the second quarter of this year, but after seeing the sudden price reduction, I finally decided to give up the idea of buying a car for the time being, and continue to wait and see if the market price of the target model will drop again." After seeing the offers launched by automobile companies, Beijing consumer Qi Sheng changed his previous thinking.

In fact, Qi Sheng's ideas represent the voice of many consumers. As we all know, since 2018, as the domestic car market has entered a stage of high-quality development, how to stimulate the growth of the automobile consumer market has become a practical problem that has long plagued the healthy development of the automobile market.

In the face of the new market situation, the relevant departments have issued a series of favorable policies around the use end of the new car purchase end to the use end of the whole life cycle scenario, in order to create a good automobile consumer market environment and encourage consumers to buy new cars. In the past three years, a number of favorable policies, including new energy vehicles going to the countryside, 600 billion yuan of preferential policies for vehicle purchase tax reduction, and extension of new energy vehicle purchase tax, have been intensively introduced, which has promoted the domestic car market to achieve positive growth for two consecutive years. The fundamental purpose of spending so much effort is to increase the purchasing vitality of the automobile consumer market. However, after automobile companies enlarge the preferential range in order to attract attention, I am afraid that the hard-won recovery momentum will change.

Statistics from the China Association of Automobile Manufacturers show that in the first two months of this year, China's automobile sales reached 362.5 million units, down 15.2% year-on-year, and have not yet returned to positive growth.

The unfavorable start of the car market, coupled with a number of favorable policies to withdraw from the market, people can't help but wonder whether the sales of the auto market can achieve the growth target of about 3% this year. When more and more consumers hold the idea of "wait and see", it will undoubtedly have an adverse impact on the development of the car market this year, especially the performance of the car market in the first half of the year.

According to Cui Dongshu, the development of the automobile market is becoming more mature, but the profit margin of new car sales of automobile companies is not high. Among them, the revenue data of some new car brands shows that although the market sales have increased, they have not yet lost money. "Most new energy vehicles in the market are difficult to make profits, and many traditional car companies can only rely on fuel vehicles to support the development of new energy vehicles, so long-term excessive subsidies will aggravate the imbalance of car companies' revenue, which is not conducive to stabilizing the automobile consumer market." He said.

Statistics from the China Automobile Dealers Association show that from March 3 to 1, the domestic passenger car market retailed 12,41 units, down 4% year-on-year and 17% from the same period last month. Since the beginning of this year, the cumulative retail sales of passenger cars have reached 11.309 million units, down 4% year-on-year. In this regard, Wang Du explained that because the financial subsidies of individual provinces are only directed at locally produced car brands, the majority of consumers hold coins for purchase, and there is no promotional effect. After the implementation of such subsidies, automobile sales will not increase but decline, and if left to develop, it will cause great damage to the healthy development of the automobile consumer market.

A survey by the China Automobile Dealers Association found that in addition to Wuhan, the flow of 4S stores across the country increased significantly, but the actual transaction volume decreased significantly, and some consumers began to hold coins for purchase and wait for the price reduction subsidy policy to land. "In the case of relatively insufficient demand in the automobile market, government departments at all levels should actively introduce various measures to promote automobile consumption and stabilize economic growth." However, subsidies should not be selective or targeted, and inclusive automobile consumption subsidy policies should be introduced from the perspective of sustainable development of the automobile market, so as to truly yield benefits to consumers and create a good atmosphere for the stable development of the automobile consumer market. Wang Du said.