Zhongxin Net, 7 Jul (Zhongxin Financial Reporter Ge Cheng) The automobile "price war" that began at the beginning of this year may officially come to an end.

At the 7 China Automotive Forum on July 6, executives from 2023 mainstream automobile companies, including FAW, Dongfeng, Changan, GAC, BYD, and Tesla, jointly signed the "Commitment to Maintaining Fair Competition Market Order in the Automotive Industry" at the scene, promising not to fight "price wars" and "publicity wars".

Data map: 2023 Guangdong-Hong Kong-Macao Greater Bay Area Auto Show and New Energy Vehicle Expo Photo by Chen Wen, reporter of China News Agency

Will the "price war" end?

At the beginning of this year, Tesla's two domestic models fell to the lowest price in history, and more than a dozen brands such as NIO and Xpeng also announced preferential policies for their new energy models. Driven by new energy vehicles, fuel vehicles have also fully opened the preferential model, and the six-fold and eight-fold discounts on car purchases have quickly attracted consumers' attention.

However, this intensifying "war" may be over.

The 16 mainstream automobile companies that signed the "Letter of Commitment to Maintain Fair Competition Market Order in the Automotive Industry" this time are: China FAW Group Co., Ltd., Dongfeng Motor Group Co., Ltd., Chongqing Changan Automobile Co., Ltd., SAIC Motor Group Co., Ltd., Beijing Automotive Group Co., Ltd., Guangzhou Automobile Group Co., Ltd., China National Heavy Duty Truck Group Co., Ltd., Chery Automobile Co., Ltd., Anhui Jianghuai Automobile Group Co., Ltd., Zhejiang Geely Holding Group Co., Ltd., Great Wall Motor Co., Ltd., BYD Automobile Industry Co., Ltd., NIO Holdings Co., Ltd., Beijing Chehejia Information Technology Co., Ltd., Guangzhou Xpeng Automobile Technology Co., Ltd., Tesla Motors (Beijing) Co., Ltd.

The above-mentioned letter of commitment clearly states that we will adhere to industry rules and regulations, standardize marketing activities, maintain the order of fair competition, and not disrupt the order of fair competition in the market with abnormal prices; Pay attention to marketing and publicity methods and methods, do not exaggerate publicity, do not falsely advertise, do not mislead consumers in order to attract attention and increase customer acquisition, etc.

"At present, the automotive industry is facing the challenge of restructuring the market competition order, and the competition is becoming more and more fierce." Talking about the phenomenon of "price war" and "publicity war" in the industry, Wang Jun, president of Chongqing Changan Automobile Co., Ltd., said frankly that market factors and non-market factors are also penetrating into the atmosphere of market competition, making competition more complicated. There are also some unclear and unfair competition phenomena in the industry.

The industry believes that the "price war" has led to a decline in profits in the automobile manufacturing industry. According to data from the National Bureau of Statistics, in the first quarter of 2023, the profit margin of the automobile manufacturing industry was 3.8%, down 1.6% year-on-year; Total profit was RMB819.4 billion, down 24.2% year-on-year.

Since April this year, as the "war" between car companies has gradually subsided, the profits of the automotive industry have rebounded. In the first five months of 4, the profit margin of China's automobile manufacturing industry was 2023.4%, a year-on-year increase of 8.0%; Total profit was 1.1746 billion yuan, a year-on-year increase of 2.24%.

At the same time, the new energy automobile industry is more seriously troubled by the "price war". Relevant data show that in 2022, there will be more than 350 new energy models on sale, with an average monthly sales of only <>,<> vehicles, and among more than <> brands, there will be only a few profits in the new energy field. Wang Jun believes that the sustainable and high-quality development of new energy vehicles has been challenged by costs and benefits.

The cumulative growth rate of automobile manufacturing profits in 2023. Source: China Association of Automobile Manufacturers

In the future, the focus will be on strengthening internal skills

Industry insiders believe that a good and healthy market competition order is one of the important guarantees for the high-quality development of the automobile industry. The signing of the above-mentioned letter of commitment will play a positive role in maintaining a good order in the automobile market, jointly creating a harmonious consumption environment, and actively stabilizing and promoting automobile consumption.

"It is particularly important to maintain the market competition environment and promote the benign development of the market." Miao Changxing, a first-level inspector of the First Department of Equipment Industry of the Ministry of Industry and Information Technology, suggested that the majority of enterprises standardize their marketing activities, do not disrupt fair competition in the market with abnormal prices, and avoid chaos such as wanton price reductions and network trolls. At the same time, it is necessary to strengthen internal strength, strengthen institutional innovation, improve product quality, provide high-quality services, and work together to maintain a good market environment and make greater contributions to the high-quality development of the automotive industry.

According to Feng Xingya, general manager of Guangzhou Automobile Group Co., Ltd., in addition to avoiding "price wars" and "publicity wars", the automotive industry should also strengthen coordination and cooperation to strengthen shortcomings.

"Due to the tradition of self-reliance and going it alone, Chinese car companies need to coordinate to deal with challenges such as technology patent litigation, carbon emissions, anti-dumping, and trade protection in specific fields, and build an industrial ecology covering mainstream markets at home and abroad."

Infographic: People visit the car exhibition area. Photo by China News Agency reporter Luo Yunfei

Expert: It is expected that the peak of domestic demand consumption of automobiles will be around 4000 million

At present, China's automobile production and sales have ranked first in the world for 14 consecutive years, and the scale of the automobile market ranks first, although the industry competition has intensified, but there is still more room for growth in the future.

Fu Bingfeng, executive vice president and secretary general of the China Association of Automobile Manufacturers, said at the forum that in the long run, considering China's huge population base and resource endowment, China's automobile market still has a lot of room for growth.

"As of the end of 2022, China's 226,4000 people have <> vehicles, many families have not yet owned a car, young consumers' pursuit of new consumption trends is also increasing, combined with the history of global automobile developed countries, it is expected that China's automobile domestic consumption peak is about <> million."

Fu Bingfeng said that from the perspective of development structure, passenger cars will be the main growth point in the future, and with the gradual narrowing of China's economic regional differences, the incremental scale of the market will gradually shift to third- and fourth-tier cities and rural markets, and after more than ten years of industrial cultivation, the number of 400,<> people will reach <> vehicles. (End)