BYD "killed" into the 70,000 yuan range, and some car companies quickly cut prices to follow suit
The “price war” in the auto market escalates after the Spring Festival
During the Spring Festival, car stores have become popular gathering places in major supermarkets. Taking advantage of the customer flow in shopping malls, some dealers have launched preferential activities to seize incremental opportunities. With the end of the Spring Festival holiday, the new energy vehicle price war has reignited again. Affected by BYD's launch of new cars with prices starting at 79,800 yuan, some car companies announced price cuts. As the "price war" continues to escalate, where will China's auto market go in 2024?
Automobile stores and supermarkets are very popular during the Spring Festival
During the Spring Festival, the advantages of automobile dealers and supermarket stores emerged. Compared with paying high transportation and time costs to go to a 4S store, it is very convenient for consumers to view cars while shopping. For this reason, many car companies and dealers arrange sales personnel on duty, hoping to tap more potential customers.
Mr. Wang, who was testing a car at a NIO store, told reporters, "I had originally planned to buy a new energy vehicle, and I also paid attention to related models. Sometimes I would pass by a supermarket to get information, and sometimes I would make an appointment for a test drive. It felt like not bad."
"During the Spring Festival, we are open every day," said a salesperson at a Xpeng Automobile supermarket store in Guangzhou. "There are some discounts during the period. Most of the people who buy cars are interested customers. They may have received year-end bonuses. Come here when the money is available." Pick up a car. There are also many consumers who only enter the store with the mentality of taking a look, rarely ask for relevant car model information, and have no clear intention to purchase a car."
Next to the entrance of Sam's Supermarket, a Mercedes-Benz was displayed in the open space in front of the court. The display board "Mercedes-Benz smart starting from 179,000 with no down payment" attracted many people to stop and watch. A staff member of the car store said, "The prices of cars are relatively fixed, and there are no particularly big discounts during the Spring Festival. Especially new energy vehicles, which are mainly produced according to orders, and can be bought when needed. There is no particularly big peak or off-season."
According to past rules, the auto market during the Spring Festival will enter the off-season. Some consumers said in interviews that they would buy a car before the Spring Festival. On the one hand, the discounts are relatively strong, and on the other hand, it is more convenient to use the car at home and travel freely.
However, after the price war over the past year, many people have already regarded price cuts as the norm. "When you are not in a hurry to use a car, you tend to wait, hoping for more discounts in terms of price, configuration, service, etc." said a car owner who already has a gas car and plans to buy another new energy car.
During the visit, the reporter found that more and more car brands have entered large supermarkets. Some industry analysts believe that although 4S stores have better services in terms of car types and sales systems, customers generally only experience them when they plan to buy a certain brand or model. For some less well-known new energy vehicles, selling cars in shopping malls can increase brand exposure, attract customers to enter the store for experience, and create more opportunities to promote and sell products. In addition, supermarkets have large traffic and can save a lot of advertising costs. This is one of the reasons why many new car-making companies choose supermarkets.
Price war continues to escalate
Just after the Lunar New Year holiday, the term "BYD price cuts" became a hot search topic.
On February 19, BYD announced the launch of Qin PLUS Honor Edition and Destroyer 05 Honor Edition, priced into the 70,000 yuan range, and bluntly stated that "BYD's price of 79,800 yuan makes fuel vehicles panic." In response to this, BYD's official customer service responded to the media that the official guide price of the Qin PLUS DM-i Honor Edition is indeed 79,800 yuan to 125,800 yuan, and the entire series is 20,000 yuan cheaper than the championship version. Previously, BYD revealed that the core goal of the launch of Qin PLUS Honor Edition and Destroyer 05 Honor Edition is to bring plug-in hybrid models into the "7" era and further accelerate the "gasoline-electric substitution" effect of plug-in hybrid models.
Regarding BYD's aggressive price war, industry insiders analyzed that BYD's ability to further lower product prices is mainly due to its scale effect, which allows it to have better cost control capabilities. At the same time, BYD's mastery of core technologies, coupled with its strong vertical integration capabilities and advantages in the entire industry chain layout, also give it more proactive pricing power in industrial competition.
As BYD starts a price war, some car companies have announced price cuts. "Wuling follows up on BYD's price war" became a hot search topic on the same day. SAIC-GM-Wuling Motors officially announced that the price of the 150km advanced version of its Wuling Starlight plug-in hybrid model has been adjusted from 105,800 yuan to 99,800 yuan, a price reduction of 6,000 yuan.
Changan Qiyuan immediately followed up on BYD's price war. Changan Qiyuan officially launched the A05 model, saying that "electricity is lower than oil". It is available for a limited time starting from 78,900 yuan, with new plug-in hybrid supplies. It is a new attack on electric power. You can get on the car immediately and enjoy multiple gifts.
Price cuts by new energy vehicle companies have undoubtedly intensified market competition. An Qingheng, director of the China Automotive Industry Advisory Committee, said in a previous interview that China's new energy vehicles are developing rapidly and on a large scale, but the entire industry is facing the problem of profitability. From a global perspective, with the exception of Tesla, BYD, Lideal and Aian, the vast majority of new energy vehicle companies are losing money, and Lideal and Aian will only start to achieve profitability in 2023.
Some people are scrambling for prices, while others are sounding the alarm. On February 18, He Xiaopeng, chairman of Xpeng Motors, issued an internal letter. He said that the auto market will usher in more intense competition in 2024. "This is the first year for Chinese auto brands to enter the 'bloody sea' competition, which is also the first year of the knockout rounds." He Xiaopeng mentioned that 2024 is the year for Xiaopeng In the tenth year, performance must more than double, the organization must make up for all shortcomings, and operations must take the first step towards high quality. At the same time, it will invest more manpower (recruiting about 4,000 people) and invest more than 40% of the research and development budget year-on-year. In terms of internationalization, he said that he will lay out core markets in Europe, ASEAN, the Middle East, Latin America, Oceania and other regions, deepen the intelligent advantages of products, and strengthen the local adaptation of products (including left-hand and right-hand drive). From products, Intelligent driving and brand comprehensively create a new path to globalization.
Geely Automobile Group also mentioned in its New Year message that 2024 will be another "most exciting" year. Volume prices, volume products, volume traffic...it's time for everything to "see the truth". Competition in the domestic market is fierce, and export sales have become a breakthrough direction for many car companies. Geely Auto also said, "No matter how difficult it is to open up the international market, we firmly believe that 'internationalization' is inevitable for Chinese car companies."
Yangcheng Evening News reporter Zhan Shuzhen