The ＂price reduction tide＂ has revived, and the auto market has accelerated the reshuffle.
Text/Figure Huasheng Online All-Media Reporter Hu Rui
A wave of interest has not stopped, and another wave has started, and the domestic auto market is surging. When many car companies were still stuck in last year’s "price reduction tide", a more fierce "price war" began in the spring of this year. Last month, He Xiaopeng, chairman of Xpeng Motors, issued an internal letter saying that the automobile market will usher in more intense competition in 2024; Geely Automobile Group also pointed out in the message of the Spring Festival that 2024 will be another "most voluminous" year.
In the fierce competition, the industry has accelerated the reshuffle, and independent brands have taken advantage of the wind of new energy vehicles. In 2023, the sales of independent passenger car brands accounted for more than half of the domestic market.
Since last year, many car companies have joined the price war, attracting many consumers to come and see the cars. )
[market]
The frequent occurrence of "price wars" has set off a "dispute between oil and electricity"
"I have seen the car for a while and want to wait and place an order." On March 15, Ms. Liu, who planned to buy a car in the near future, said that she wanted to buy it early and enjoy it early, but she hesitated after seeing the price reduction of cars one after another.
Indeed, after the Spring Festival holiday, the domestic auto market ushered in another wave of "price reduction tide". On February 19th, BYD announced that its new car, Qin PLUS, and the destroyer were on sale for RMB 0.5798 million. This means that the starting price of Qin PLUS Glory Edition and Destroyer 05 Glory Edition decreased by 20,000 yuan and 22,000 yuan respectively compared with the champion version in 2023. If the price of Dongfeng Citroen C6 dropped by 90,000 yuan last year, it was the first shot that the oil car started the "price war" in the automobile market, then this year’s listing of BYD’s glory version model was the "table-lifting" mode of the tram to the whole automobile market.
Then, Wuling Automobile announced that the glory price of the advanced version of Wuling Xingguang PHEV 150 was 99,800 yuan, which was 6,000 yuan lower than the manufacturer’s guide price of 105,800 yuan. After that, the starting price of Changan Qiyuan A05 was lowered to 78,900 yuan, which was 11,000 yuan lower than the guide price. Nezha announced the price reduction of several main models, including the highest straight drop of 22,000 yuan in Nezha X.
In addition to new energy vehicle brands, mainstream joint venture brands and fuel vehicles are also participating in the price reduction tide. Among them, Beijing Hyundai announced that the brand’s A-class sedan Elantra has reduced its price, starting from 75,800 yuan and reducing its price by 24,000 yuan. Buick, a subsidiary of SAIC-GM, announced price reduction subsidies for five models, namely, Micro Blue 6, GL8, LaCrosse, Weilang Pro and Angkor Plus. Among them, the LaCrosse offers a discount of 35,000 yuan. On the evening of February 29th, Geely Automobile also issued a document saying that it launched a limited-time subsidy of 2 billion yuan in March, with the lowest promotional price of 29,900 yuan.
Many people in the industry said that the "price war" will continue in 2024, especially the price reduction tide led by new energy vehicles will not stop to a large extent.
Talking about the reasons for the recent price war in the passenger car market, Cui Dongshu, secretary-general of the National Passenger Car Market Information Association, believes that it stems from the process that new technologies replace old technologies and new energy vehicles replace fuel vehicles. Cui Dongshu said that in the process of establishing a new market order, the competition between new and old manufacturers is fierce, and it is expected that this process will last for several years until a new pattern is formed.
Yin Tongyue, chairman of Chery Holding Group, believes that the price reduction tide can boost the automobile consumption in the short term. However, if it continues to evolve into a vicious price war, the side effects will be even greater, which is not conducive to the long-term development of the new energy automobile industry. The automobile market should still return to normal order.
[observation]
A number of new forces have fallen, and the survival of the fittest has accelerated.
The reporter observed that when the "price war" broke out one after another in the auto market, the industry was also accelerating the reshuffle. Some car companies have "stopped", some are in jeopardy, but there are also many new entrants.
According to media reports, on February 18th, the first day of returning to work during the Spring Festival in the Year of the Loong, Gaohe Automobile held an internal meeting and announced that it would stop production for six months from now. In the cruel market competition environment, the so-called "ceiling of luxury pure electric vehicles" is also deeply mired. Ding Lei, the founder, said that the window period for Gaohe Automobile to turn over is only three months at most, and he will actively strive for acquisitions or seek investment opportunities.
On the evening of February 22, Gaohe Automobile published a "Announcement on Recent Service Operation Guarantee" on the official APP, saying that in the face of internal and external pressures and challenges, the company’s daily operations have been greatly adjusted since February 19, and it is now fully taking various relief measures. Regarding whether it can provide services to customers normally, Gaohe Automobile said that in a special period, the company is actively coordinating resources and striving to ensure the after-sales service of Gaohe vehicles and the maintenance of related functions of vehicle networking. The vehicle control function and community section of Gaohe HiHiHiApp can be used normally. However, the service of Gaohe charging station, charging pile installation and App charging function (including free charging service) will be temporarily suspended, and the distribution of App Hi points and Gaohe Choice Mall will also be temporarily suspended.
This year, Weimar Automobile, a new car-making force that was once as famous as Wei Xiaoli, also announced that it had been accepted by the court for bankruptcy and reorganization.
Looking back around 2014, the new car-making forces were in the ascendant, but with the intensification of competition in recent years, the capital market tends to be rational, and a large number of new car-making forces have fallen. For example, Aichi Automobile, Skyline Automobile, Baiteng Automobile, Singularity, and many other once-popular brands of new forces have long since faded out of public view. According to incomplete statistics, 27 of the 48 new brands have faded out of public view.
According to Zhu Huarong, Chairman of Changan Automobile, the Matthew effect of the industry is prominent, the survival of the fittest is accelerated, and the industrial concentration is enhanced. It is estimated that the TOP10 car companies will occupy nearly 85% of the market share in 2024, and 80% of the brands will be shut down in the next few years.
The "Development Pattern and Prospect of Global New Energy Vehicle Industry" jointly issued by China Electric Vehicle committee of 100 and McKinsey shows that with the maturity of China’s automobile industry, there will be more mergers and acquisitions and deep cooperation in China’s automobile market in the next three to five years.
sb/sth attracting attention
The rise of independent brands accounts for more than half of sales.
Under the "price war" and "oil-electricity melee" in the domestic automobile market, independent brands have taken advantage of the wind. According to the data of the Passenger Car Association, in 2023, there were 25.53 million passenger cars wholesale and 21.699 million retail in China. Among them, the annual market share of independent brands reached 52%, surpassing joint venture brands for the first time.
"Consumers are no longer obsessed with joint venture brands, and they will take the initiative to choose their own brands when choosing a car." A person in charge of a car dealer in Changsha told reporters that more and more consumers, especially young people, are turning their attention to more cost-effective and personalized self-owned brand cars. "Especially in the field of new energy vehicles, self-owned brands often have more competitive advantages."
Take SAIC as an example, we can get a glimpse of the development of our own brands last year. In 2023, SAIC sold 5.02 million vehicles, ranking first in China for 18 consecutive years. However, compared with the previous year, the sales volume decreased by 5.3% year-on-year, which was far from the target of 6 million vehicles set at the beginning of the year. The reason is that its main joint venture brand is impacted by new energy and independent brands, and its sales volume is gradually eroded.
The data shows that in 2023, the sales of three important joint ventures, SAIC Volkswagen, SAIC GM and SAIC-GM-Wuling, all decreased to varying degrees year-on-year. Among them, SAIC-GM decreased by 14.45% year-on-year.
Compared with the decline in the sales volume of the joint venture sector, the sales volume of SAIC’s own brands showed an increasing trend. In 2023, the sales volume of independent brands of SAIC reached 2.775 million vehicles, accounting for more than 55% of the total sales volume, an increase of 2.5 percentage points over the previous year.
At the same time, the sales of independent car companies such as BYD, Guangzhou Automobile Group, Great Wall Motor and Chery all increased in 2023. Especially in the new energy vehicle market and export market, independent brands have achieved significant growth. Among them, BYD sold more than 3 million vehicles in 2023, a year-on-year increase of 61.86%.
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