In the past two years, the price war has been challenging the nerves of car companies all the time, and under the intrusion of the price war, car companies have also shown signs of life.
some car companies have been beaten defenseless by the price war, and some have barely maintained it.
some car companies are alive and well.
Under the price war, the joys and sorrows of each family are different.
As a result, the car circle bosses who gathered in the mountain city of Chongqing had a heated discussion on the inner volume mainly brought about by the price war.
Zeng Qinghong, Wang Chuanfu, Li Shufu, Zhu Huarong and other auto company bosses express their own views.
Some think that the inner volume can build a world-class brand, some feel that the inner volume leads to disorderly competition that is not in accordance with the regulations, and some propose to rationalize the internal volume.
Also in the face of internal volume, why are the attitudes of these bosses so different? Car bosses are tit-for-tat, this is a forum limited to auto people, but when discussing the topic of internal volume, the tit-for-tat words of car bosses have become the most interesting part of the forum, and even successfully come out of the circle.
At the 2024 China Automobile Chongqing Forum, GAC, Changan, BYD, Geely and many other auto executives talked about the hottest topic at the moment-volume.
GAC GROUP Chairman Zeng Qinghong was the first to speak, saying that “it is not a way to roll up like this.
Without money or benefit, it is impossible for an enterprise to survive.
We should have overall vision and a view of the overall situation, instead of just focusing on the immediate ‘volume’.
” He also pointed out that automobile companies fight a price war to make profits possible but not desirable.
Photo: China Automobile Chongqing Forum, Wang Chuanfu, chairman and president of BYD, is a loyal fan of the volume.
He said: in fact, volume is a kind of competition, the essence of market economy, and the core of market economy is competition.
“Market economy is a surplus economy, only excess competition, competition can produce prosperity”, “volume, is a kind of competition.
” In the face of the market volume, entrepreneurs should not be anxious, but should face it positively.
“I believe that all entrepreneurs should embrace and participate in the competition, develop in the competition, contribute to the country, prop up Chinese brands and build world-class brands.
” In response to some car companies’ complaints that BYD started a price war, Li Yunfei, general manager of BYD Brand and Public Relations, asked directly that because of the rise in the price of raw materials used to make batteries in 2022, everyone said that the price of cars should go up.
So BYD has also gone up twice, but now that the price of raw materials has plummeted, why only BYD is cutting prices while other car companies keep the original price unchanged? Zhu Huarong, chairman of Changan Automobile, who signed the cooperation agreement with GAC that day, also believes that the inner volume brings more good things.
“Volume is the normal process of good money driving out bad money, and it is the best way for the industry to quickly return to healthy competition.
” “the ‘volume’ itself means the pursuit of excellence, and this competition will enhance the height of Chinese brands, maximize the interests of users, and really create value for users,” he said.
I believe that in the next 10 years, more Chinese brands will become world-class brands through this competition.
” Li Shufu, chairman of Geely Holdings, proposed to look at the volume dialectically.
He believes that only healthy competition can achieve high-quality development.
He said that the phenomenon of internal volume is both a good thing and a bad thing.
If the level of marketization is high, the law is sound, the law is strict, and there is transparent and fair competition, this is a good thing.
on the contrary, it is a bad thing, endless internal volume, simple and rough price war, the result is Jerry-building, fake sales, non-compliant disorderly competition.
In contrast to the tit-for-tat confrontation of the bosses of traditional car companies, Weilai, as a new power, has maintained a neutral attitude towards the inner volume.
Li Bin stressed that the volume is very normal and is the inevitable result of market competition, but don’t forget to cooperate.
Is the inner volume good or bad? The truth becomes clearer as it is debated, and the truth becomes clearer and clearer.
” The same is true of the inner roll of the car circle.
From the views of the above-mentioned automobile company leaders and executives on the volume, the volume is both good and bad, more still need to be viewed from a dialectical point of view.
First of all, let’s talk about the benefits of inner volume.
First of all, the volume in the past two years has promoted the development of new energy vehicles.
More than ten years ago, the state made great efforts to develop new energy vehicles by means of financial subsidies and preferential policies, but its development has been limited for a long time.
And at that time, scandals such as cheating and compensation by car companies were exposed from time to time.
In 2020, the development of new energy has been accelerated under the continuous promotion of Tesla and new power car companies.
At the same time, traditional car companies such as BYD and Geely also began to increase the size of the new energy market.
At that time, the market even compared 2020 to the first year of new energy.
In order to further develop new energy, the government has also drawn up a schedule.
According to the New Energy vehicle Industry Development Plan (2021-2035), by 2025, the sales volume of new energy vehicles will reach about 20% of the total vehicle sales.
by 2035, the core technology of China’s new energy vehicles will reach the international advanced level, and pure electric vehicles will become the mainstream of new sales vehicles, accounting for more than 50%.
And the price cut allows this goal to be achieved ahead of time.
In 2023, the price war first started by Tesla added a fire to the new energy, which swept the whole car market in a short time.
In particular, the big price reduction of Dongfeng Citroen has made the price reduction deeply rooted in the hearts of the people.
With the price war, new energy vehicles are developing rapidly.
According to the China Automobile Association, in 2023, the production and sales of new energy vehicles completed 9.
587 million and 9.
495 million respectively, an increase of 35.
8% and 37.
9% over the same period last year, with a market share of 31.6%. In the global sales of new energy vehicles, China’s new energy vehicles account for nearly 65%.
In 2024, BYD fired the first shot in the price war and launched the slogan “electricity is lower than oil”.
Thanks to this, data from the ride association show that in the first four months of this year, sales of new energy passenger vehicles were 2.
448 million, an increase of 32.
9% over the same period last year, with a market share of 38.1%. In the first half of April, the penetration rate of new energy passenger vehicles exceeded 50% for the first time.
If it goes on like this, it may reach 50% by 2025, substantially ahead of the national goal.
” Zeng Qinghong said so.
It can be said that, with the help of the price war, the car companies have overfulfilled the task.
The second is the survival of the fittest, the volume can accelerate the exit of inferior enterprises.
In recent years, countless enterprises have closed down or withdrew from China.
Including Baoneng, Cheetah, Bowo and other independent traditional car companies, Sailin, Weima, Gaohe, Hengchi and other new power car companies, Guangzhou Auto Acura, Dongfeng Renault, Changan Suzuki and other joint ventures.
Not only that, but in the view of auto executives, more car companies will be eliminated in the future.
Zhu Huarong has said that in the next three years, there may be70% of brands are facing “shutdown and merger”, and only five major car companies may stay in the Chinese market in the future, just like playing mahjong.
Zeng Qinghong, Yin Tongyue, chairman of Chery Automobile, and Yu Chengdong, chairman of Huawei Smart car solution BU, share basically the same view.
Finally, the inner volume allows the rise of independent brands.
Wang Chuanfu said, “at present, the new energy industry has entered the knockout stage, and the accelerated launch of new energy products by Chinese car companies will erode the joint venture brand market.
In the next 3-5 years, the share of joint venture brands will fall from 40% to 10%, of which 30% is the space for Chinese brands to grow in the future.
” Photo source: BYD, however, the downside of the inner volume to the auto market is also worthy of vigilance.
The internal volume will hurt the interests of the car companies.
According to statistics, 15 listed auto companies, including SAIC, BYD, Geely and Great Wall, have achieved revenue growth in 2023, but as many as 9 of them are facing the situation of increasing income without increasing profits.
In the face of the general damage to the profits of the industry, industry insiders pointed out that vigilance against internal volume leads to the deterioration of car companies in order to control the cost.
Li Shufu pointed out at this forum that the healthy development of any industry must be shown in the realization of better economic benefits in the input-output ratio, endless internal volumes, and a simple and brutal price war.
the result is Jerry-building, counterfeiting, and irregular disorderly competition.
Zhu Huarong also warned that the industry should adhere to the user-centered, adhere to seeking truth from facts, promote brands and products, and avoid overdraft society and users’ trust in the industry.
Well, who can’t bear the inner roll? Although the inner volume has its own advantages and disadvantages to the car market, after reading the remarks made by the executives of the above auto companies, we can still find that there are still subtle differences in their attitude towards the inner volume, either in favor of or against it.
Oh, why is that? In fact, a horizontal comparison of the performance of various car companies can tell one or two.
GAC, for its part, sold 156500 vehicles in May, down 25.
33% from a year earlier to 699500 vehicles from January to May, down 24.
51% from a year earlier.
Of these, sales of new energy vehicles in May were 37500, down 25.
51% from a year earlier, down 25.
51% from January to May to 131600, down 28.
38% from a year earlier.
And GAC’s two joint ventures, GAC Honda and GAC Toyota, are also having a hard time.
Guangzhou Auto Honda sold 31900 vehicles in May, down 41.
31 per cent from a year earlier.
Guangzhou Auto Toyota sold 61000 vehicles in May, down 17.
00% from a year earlier.
Changan Automobile, as one of the “national team”, has a good momentum of development in terms of new energy and independence.
Changan Automobile sold 206800 vehicles in May, up 3.
92% from the same period last year, of which 55000 were sold by its own brand new energy, up 87.
76% from the same period last year.
From January to May, Changan Automobile sold a total of 1.
109 million vehicles, an increase of 12.
03 percent over the same period last year, of which independent sales were 932400, up 11.
64 percent, accounting for more than 80 percent, and independent brand new energy sales were 235500, up 72.
74 percent over the same period last year.
For Geely, Geely Holdings sold 256600 vehicles in May, up 22.
2% from a year earlier, and new energy sales of 110700 vehicles, up 59% from a year earlier.
From January to May, cumulative sales were 1.
2302 million vehicles, up 27.
9 percent from the same period last year, and new energy sales were 468200 vehicles, up 48.
8 percent from the same period last year.
For BYD, in May, BYD’s sales exceeded 330000 for the first time, reaching 331800, an increase of 38.
13% over the same period last year.
From January to May this year, cumulative sales reached 1.
2716 million, an increase of 26.
80% over the same period last year.
In addition to sales volume, in the first quarter of this year, there were also significant differences in the gross margins of three car companies (Geely did not report), which were GAC 7.
14%, Changan 14.
41% and BYD 21.88%. Source: BYD, judging from the sales of these four companies in the first five months of this year, GAC suffered a serious setback, and its overall sales and new energy sales were greatly affected by the volume.
Changan Automobile relies on Changan Qiyuan, Deep Blue, Avita and other new energy series and brands, independent brand new energy is growing rapidly.
Geely and BYD as representatives of private car companies, the overall sales and new energy sales of the former have achieved positive year-on-year growth, while the latter BYD’s new energy sales are “far ahead”.
It is not difficult to see that GAC is most deeply affected by the internal volume, while Changan and Geely have slightly less pressure under the internal volume, while BYD is the biggest beneficiary of the internal volume, so it is no wonder that BYD agrees so much with the internal volume in this forum.
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