The price war in the domestic automobile market is still going on, and it is still showing a growing trend.
According to the relevant information compiled by the Global Automotive Research Institute, as of April this year, nearly 40 car brands and more than 130 models have participated in the price war in the domestic automobile market.
BYD, the leading brand in the new energy market, has opened a new era of “electricity is lower than oil” in the domestic automobile market by launching a series of glorious models.
Idealism, Xiaopeng and Mengjie in the new power brands have also joined the force of price reduction.
The mainstream joint venture brands, which have gradually been in a weak position in the market, are being held back and have to restructure the price system, showing a market “sincerity” that they have not had in previous decades.
Xiaopeng Automobile, the price war has swept the entire car market has become unstoppable, but in this process, we have to think about a question: in the increasingly “volatile” market environment, who is the ultimate beneficiary? Do consumers really benefit? Who will benefit from the reduction in car prices? Many people will certainly say that this is an obvious thing, and it will certainly be beneficial to consumers.
They can buy more advanced models at lower prices, and consumers have absolutely nothing to lose.
This is the most direct causal inference.
There are more and more cost-effective products, and technology equality can also bring more and more low-cost intelligent configuration to enhance consumers’ car experience.
From this point of view, the more fierce the price war in the car market, the longer the duration, the happier consumers should be.
But the actual situation that Gaishi knows is not so simple.
“I had a plan to buy a car last year, but I haven’t done it until now,” Wang Wei (a pseudonym) told Galaxy.
“it’s fussy.
There are too many new cars, and I always feel that if I place an order later, it will be cheaper.
” There are not a few consumers who share the same views as Wang Wei.
Analysts at the Global Automotive Research Institute believe that the increase in the number of new products and the accelerated speed of iteration will, to a certain extent, make it difficult for consumers to make car purchase decisions.
At the same time, frequent price wars will increase consumers’ wait-and-see mood, and the decision-making time for car purchase will be extended accordingly.
How to choose the most favorable price at the right time, for many consumers, will be a difficult thing to choose, to a certain extent, will affect consumers’ car purchase experience.
In addition, there are friends who are going to buy cars, who have expressed another concern about the protection of their rights and interests.
They do not believe that there will be free lunches, and a price reduction means a cost reduction, and will the reduced costs eventually be reflected in the quality of products and services? In this regard, we have also interviewed insiders in the industry, and the general view is that car companies will not “operate” on the quality of products and services in a short period of time, especially mainstream brands, are certainly not willing to trade brand reputation for short-term market performance.
On the contrary, for many brands, in the new environment of price war, in order to recruit customers, services may be further optimized.
If the price war mainly increases the difficulty of car purchase decisions for money holders, and the impact is mainly reflected in the car purchase experience, then for the old car owners, the impact is more substantial, and the loss is real money and silver.
Zhang Mo (pseudonym) and his wife, both chauffeured taxi drivers, bought an Accord more than a year ago to attract customers.
Zhang Mo told Galaxy that in order to increase their income, the couple were working day and night sports cars, but the hard money they earned over the past year or so basically erased the price that Accord had reduced since he bought the car.
“this year is for nothing,” said Zhang Mo.
“before, who could believe that Accord terminals could offer a discount of 40,000 to 50,000?” Zhang Mo is more and more unable to understand the current situation in the domestic automobile market.
And those consumers who previously placed orders for Japanese cars because of their belief in the value preservation rate of Japanese cars now have to withstand the second wave of “critical strike”.
The so-called myth of the preservation rate of Japanese cars is also shaky under the impact of the price war in the car market.
The price system of new cars has collapsed, and we are still talking about the preservation rate of used cars.
Of course, there is not only a Japanese system in which the residual value of used cars crashes, but other cars may collapse even earlier.
Those who are really stabbed in the back are old car owners and second-hand car dealers.
What did the manufacturer get? For the auto market price war, passively participating consumers have a contradictory side, what have we gained from the auto companies that actively launched this “war” and the supply chain enterprises in the upper reaches of the supply chain that have made the price war into the current situation? What have you lost? In the current domestic automobile market, various brands can be said to be on the stage after you sing, escalating the intensity of the price war again and again.
From luxury cars to economical cars, from fuel-fueled cars to new energy vehicles, they all begin to “roll” prices.
From 2023 to now, the price war has developed from a transitional means to deal with relevant policy adjustments (nationwide implementation of the “National 6B” emission standards) to a conventional promotion measure after the increasing pressure of market competition.
price reduction has become the main tone of competition in the car market.
According to the financial report data of 18 auto companies sorted out by Gaishi Automobile in 2023, it was found that the operating conditions of automobile companies had undergone a fundamental change under the influence of factors such as price war and the continuous expansion of the scale of new energy.
Among the 18 enterprises we counted, more than half of the car companies are suffering from a slowdown or even a decline in profit growth.
At this stage, there are only two Chinese new energy brands with large-scale advantages and excellent profitability, BYD and ideal.
The profitability of most car companies is facing a severe test, but in order to maintain market share, they have to continue to adopt the strategy of price reduction in the Chinese market.
Galaxy believes that car companies with advantages of scale and extreme cost control may be able to cope, but for those car companies that are already at an obvious disadvantage in the competition at this stage, the days to come may be even more difficult.
The profitability of Chinese car companies will be further divided.
The increasingly fierce price war in the vehicle market will inevitably transmit pressure to the upstream supply chain.
The reason is very simple.
If the mainframe factory is forced by the market, the supplier will be forced by the mainframe factory.
Xu Daquan, president of Bosch China, has previously revealed that many customers have asked Bosch for a price reduction, and some customers may even say “no price reduction or no payment”.
Under the pressure of cost reduction, Bosch can only keep negotiating.
In terms of price reduction, Bosch has its own “red line” and will not trade losses for market share.
Bosch gives the mainframe factory more price reduction space mainly through the price reduction of its own suppliers, the improvement of production efficiency, the reduction of cost and so on.
“if the customer asks for a price reduction too much, orSomeone can supply the goods at a lower price, and maybe we have to lose some of our quantity.
” This is what Xu Daquan said.
“We are also under great cost pressure, and we don’t have much room for price reduction,” another Tier1 company, a leading company in the field of intelligent network connection in China, also told Galaxy.
“We can only achieve cost reduction through continuous technological innovation, such as higher software integration and higher software architecture efficiency.
” Gaishi Automotive Research Institute believes that the pursuit of cost reduction and efficiency under the pressure of competition and profit is bound to be transmitted to the upstream supply chain enterprises.
Supply chain enterprises are facing pressure from many aspects, such as technological innovation, material design innovation, procurement channel optimization, production efficiency improvement and so on.
What does it mean for the industry? Last year, the average car price in China fell by about 15%.
” “in February this year, a new price war started again, with some models cutting costs by about 20% to 30%,” Xu pointed out.
” In this context, there is a need to discuss, what is the reason why the price war can not stop? At this stage, there are still too many car brands in the domestic market.
In the mature markets of Europe and the United States, there will never be a situation in which dozens of car companies compete with each other, but in China, there is a big market scuffle between dozens of car companies.
According to the relevant data of Galaxy Automotive arrangement, a total of 77 car companies, 129 passenger car brands and 820 models on sale will be produced and sold in the Chinese market in 2023.
Until the competition stabilizes, the pressure to cut prices will always be there, and everyone will keep rolling.
” This is Xu Daquan’s basic judgment on the follow-up trend of the domestic automobile market.
With the continued upgrading of terminal concessions, the coverage of the price war is getting wider and wider, and the reshaping of the market competition pattern and even the process of survival of the fittest may be speeded up in an all-round way.
At present, the impact of the price war on the industry is already very obvious in many places.
First of all, when the price becomes the main competitive factor in the car market, the product homogenization becomes more and more serious, which becomes the inevitable result.
Secondly, the price war is the root cause of the price chaos in the current domestic automobile market.
The collapse of the original price system and the leading new energy vehicle companies began to dominate the pricing power of the auto market price system, which is also a significant change in the industry.
Moreover, Geshi believes that the price war has also led to the continuous deterioration of the competitive environment of car companies.
It is mainly reflected in the following aspects, the intensive release of new cars, the accelerated iterative speed of product updates, and the continuous improvement of intelligent, diversified and personalized demand, all of which are accelerating the reshaping of the competitive pattern of the automobile market.
The profit space of car companies is constantly being squeezed, and the marginal enterprises with weak profitability intensify the risk of shutting down and merging.
In terms of market structure, there are also some significant changes, mainly reflected in the increasingly obvious competition between new energy vehicles and fuel vehicles.
The price of new energy products continues to decline, especially the A-level and B-level market segments, new energy penetration will be accelerated.
At the same time, the price of the B-tier market will go down further, and the characteristics of equal rights in science and technology will be more obvious.
The price of B-class cars is expected to fall into the current price range of A-class cars, while the B-class market is likely to usher in more advanced configurations, and there will be more and more low-cost and high-equipped models.
In particular, those configurations with strong economies of scale in terms of cost will accelerate their popularity, such as high-end autopilot, air suspension, advanced car-engine systems, and so on.
This round of price war in the car market has been played on and off for more than a year, and there is no sign of an end.
On the positive side, the price war has indeed accelerated the process of the knockout stage of the car market, and in this process, it will show a competitive situation of “good money driving out bad money”.
However, the long-term continuation of the price war is also really hitting the whole industry, if the whole industry falls into the trap of price competition instead of making efforts on higher comprehensive product strength, in fact, it will not be a good thing for upstream and downstream enterprises, consumers, and the development of the industry.
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