Although 16 car companies have signed the "Letter of Commitment", under the pressure of the existential crisis, these car companies seem to have no regard for the promises they once made. In the last quarter of 2023, China's auto market has set off an unprecedented wave of price cuts. Both the magnitude of the price reduction and the range of companies involved have reached the peak of this year. The author visited the major car sales stores in Beijing Blue Harbor and found that both domestic brands such as Huawei and NIO, as well as German brands such as BMW, are launching the most aggressive discount strategies this year. Huawei's strategy is mainly to give away options, which can be seen as an indirect price reduction. Take the coupe Zhijie S7 cooperated by Huawei and Chery as an example, the model was just launched last month, although the price of the car was not directly reduced, but it was given away 550,000 yuan of optional package. The SUV M7 cooperated by Huawei and Cialis, if it is a Beijing brand, it will reduce 10,000 yuan in cash and give 2An optional package of 70,000 yuan (non-Beijing brand will not reduce cash). Salespeople say that the best discount is now greater than at any time this year. "It's the same for the entire automotive industry. The salesperson said, "We're all selling stock cars now." He explained that if he orders now, it will likely be the 2023 model produced between August and October this year. The 2023 model year is no longer in production in November-December, and production is now in reserve for next year's 2024 model. Therefore, the 2023 model year must be sold out by the end of this year, otherwise "the New Year's Eve will become the old model". BMW's price reduction strategy is the most direct and aggressive - at least 100,000 yuan per model, and as much as 250,000 yuan for SUV models. Taking the BMW i4 displayed at the scene as an example, the original price includes the optional about 470,000 yuan, and the discount is about 360,000 yuan; The original price of the BMW i3 is about 350,000 yuan, and the discount is about 210,000 yuan - each model is at least 100,000 yuan cheaper. The price reduction of SUV models is even stronger, with a direct reduction of about 250,000 yuan. This is a semi-directly operated store of BMW, and the on-site personnel said that there was no discount on imported cars in the first half of this year, but the price suddenly began to drop in July and August. The reason is straightforward - "to sell more." He said that on the one hand, it is because imported cars will have to pay purchase tax next year; On the other hand, the iix, i4, and i7 cars sold well in Europe and the United States, but their sales in China were extremely unsatisfactory, and the OEMs issued sales tasks in the middle of the year. "In order to complete the task, it must be sold at a reduced price. ”
NIO has the smallest price reduction, with a discount of 8,000 yuan for the current car. "At the end of the year, the discount is relatively large. An on-site salesman said. According to incomplete statistics, since November 2023, at least 15-20 car companies have participated in a new round of ** war. Their price reduction methods are different, some are official adjustment of the leading price, and some through **, to give consumers a variety of replacement subsidies, licensing subsidies or financial subsidies. Compared with the first half of this year, the causes, characteristics and intensity of the year-end war are significantly different. The more ferocious, but more silent ** war "At the end of the year, the ** war was more intense than in the first half of the year. Chen Qiang, co-founder of the car vertical **, said after the car has a car. After having a car, there is a car sales business, and he is very keen on the best of various car companies. According to his observations, the first thing about this battle is that the players involved have changed. "The price reductions in the first half of the year are mainly those that can't be carried earlier, such as traditional joint venture brands (Dongfeng Citroen, SAIC-GM). Chen Qiang said that at the end of the year, this time there is a big difference, even the ideal car that is considered to have strong sales has joined the first battle, and the price reduction is not low (the maximum discount of the actual transaction price of the terminal is close to 30,000 yuan). "The market is even more volatile, and no one is immune. He said. Zhang Junyi, managing partner of Oliver Wyman and head of the Asia-Pacific automotive and industrial products practice, said that the "price cut" is not only driven by small enterprises, but also by many large enterprises, such as BYD. "Because it wants to rush the goods, it will exceed the annual sales target of 3 million units by the end of the year. There will be more pressure next year. In his view, large enterprises have more confidence in cutting prices. "On the contrary, some start-ups have sales pressure, but because they can't afford to lose, they don't move so much on the **. "This means that if you want to reduce prices and sell more cars, you need to have the support of the operating chassis - not if you want to reduce it. Zhang Junyi further said that another pressure on car companies is that some regions may introduce new policies on license management next year, which will cause the market to be the first, so car companies hope to ship as soon as possible. "In areas like Shanghai, the capacity and bearing of traffic roads are limited, and perhaps in the future, a person may only have one license, whether it is a green or blue card, and this kind of possible policy adjustment will put pressure on the sales side. Therefore, everyone will take advantage of the end of this year and the beginning of next year to clear the goods. The latest news shows that on the evening of December 15, the "Implementation Measures for Encouraging the Purchase and Use of New Energy Vehicles in Shanghai" was released, and the new energy license plate continued to be issued free of charge, but the application threshold was raised - requiring individuals to have "neither new energy vehicles nor fuel vehicles (except for vehicles in the Shanghai C section)". This means that Shanghai's new energy vehicle license plate policy has been tightened. Chen Qiang said that in fact, it is customary for car companies to cut prices at the end of the year, and it is almost the same rhythm in previous years. First, after the golden nine and silver ten, it will enter the peak season of automobile sales, which is the time of consumer enthusiasm; Second, all companies should rush the sales task at the end of the year. However, this year is very special. "Everybody's feeling very different. "In the past few years, due to the epidemic and liquidity restrictions, car companies have tended to be rational when setting annual sales targets, so the first war cannot be fought; At the beginning of the year, everyone's expectations were **, so the goal was set aggressively; However, by October, many OEMs found that their sales did not meet expectations, and they had to increase price reductions in order to complete the target, which led to "the real war in the first sense". According to his observation, the first half of the year was a wave of price reductions led by OEMs, in order to clear the backlog of inventory; At the end of the year, this round of ** war started from the dealer network, "dealers fell in all kinds of ways", and then even quietly spread to the main engine factory, resulting in some main engine factories or direct stores directly surrendered. He described the first half of the year as more like a "sport-style price cut": "Suddenly someone shoots, and you suffer if you don't take a stand." The end of the year seems to be less intense and quieter than the beginning of the year, but the actual magnitude is greater - this price reduction is more like contagion, starting from individual dealers, until the infection of the entire market is ** down. "At the end of the year, the task is under great pressure, and the sales boss will not shoot all the bullets now, and if he waits, the position will be replaced by someone else. A person who is particularly experienced in sales and marketing in the mobility industry said. Compared with the previous price reduction, which was aimed at clearing the tail goods, this price reduction wave involves many new models. Geely and the joint venture production of Jiyue Automobile, just two months after the launch of the announcement of a drop of 30,000 yuan for the whole system. "In the first half of the year, the price was reduced, and everyone still had confidence in the market, and the price reduction was relatively limited and conservative, mainly dealing with unsalable models; And the price reduction in the second half of the year, whether it is unsalable or not, even if the new models have started - many companies have not completed the sales plan at the beginning of the year. Zhang Junyi said. It is worth mentioning that the opponents who are about to be put on the table and the opponents who are going to play their cards, and the stronger competitive pressure that can be expected, are also one of the roots of this round of price reduction. From December this year to January next year, a large number of new cars, including Xiaomi Auto and Ideal MEGA, will be launched. "Before these cars come out, if you're a competitor to it, you're going to cut the price first. A person who deals with a number of OEMs analyzed, "They want to snatch the hesitant and hesitant consumers." Strike first, grab people first. Won't wait for someone else to make a move. "Otherwise, on the battlefield, you will fall into passivity. This also transmits pressure to new models to be launched, such as Xiaomi Auto. They need to be more cautious in pricing and develop a sales strategy, "not overconfident". In the face of annual results, policy tightening, stronger enemies and even existential crises, price reduction has once again become a common choice for many OEMs. "The magnitude and magnitude of the price reductions are unprecedented. Zhang Junyi said. The ineffective mediation war is one of the biggest topics for Chinese automakers in 2023. As early as the beginning of this year, Tesla's price cut indirectly triggered a round of large-scale ** war for Chinese automobiles. Although Tesla has an exemplary role, the root cause is not Tesla's price cut. McKinsey Global Managing Partner Fang Yinliang said that one of the root causes is the mismatch between the expansion of supply by automakers and the real demand of consumers. At the beginning, car companies had high expectations for the start of 2023; At the same time, in recent years, car companies have increased their investment in R&D and other aspects of intelligence and electrification, so they are more eager to expect short-term sales to boost their operating performance. However, China's total auto sales remained at 23 million to 25 million units, with a steady growth rate of about 3-4% per year, and the total volume did not increase significantly. As a result, there is a mismatch between the expectations of car companies and consumer demand. What's more worrying is that the continuous price reduction signals of the industry have not positively stimulated the recovery of consumer confidence, but made consumers take a step back and hold a wait-and-see attitude. In a sense, this is a tug-of-war between car companies and consumer psychology. Chen Qiang observed that at the beginning, car companies had particularly high expectations and formulated aggressive sales strategies. "Everybody was gearing up, and it turned out that something wasn't quite right. He said, "First Tesla took a shot, and then Citroen directly stomped ** on the ground, which caused a round of panic, and everyone started a stampede price reduction." "It is undeniable that there is an internal motivation behind this wave of price cuts. "These car companies also wanted to drop, Tesla, Citroen just represent two types, car companies have found an example and benchmark, so follow the price reduction. But in the end, everyone pessimistically found that "it can't be sold if it drops, and it will be in vain if it drops." To make matters worse, the balance of consumers' psychological expectations has been broken, and more consumers are holding on to their coins. At this time, the market urgently needs a "middleman" to mediate, so that the price reduction turmoil can be phased out, and then ended. The China Association then stood up. In July this year, at the 2023 China Automotive Forum hosted by the China Association of Automobile Manufacturers, 16 car companies jointly signed the "Commitment to Maintain Fair Competition Market Order in the Automotive Industry". The signatories include FAW, Dongfeng, SAIC, Changan, BAIC, GAC, SINOTRUK, Chery, JAC, Geely, Great Wall, BYD, NIO, Li Motor, Xpeng and Tesla. 
At the 2023 China Auto Forum, 16 car companies jointly signed the "Letter of Commitment", which is regarded as led by the China Association of Automobile Manufacturers, prompting car companies to negotiate together to avoid vicious price cuts - the "Letter of Commitment" seems to mark the temporary end of the first half of the first half of the war. However, the recovery of consumer confidence did not last long, and the smell of gunpowder was rekindled. Especially in the fourth quarter of this year, the heads of various car companies began to worry about how to achieve annual results. Soon, the mediation was declared invalid, and a new round of price reductions began again. An automotive industry veteran said: "This doesn't work. This is a corporate behavior, and if an enterprise wants to survive, it will not be able to do it without occupying market share. He pointed out that if the market is not good next year, everyone will continue to hold on. Everyone is grabbing for share and survival opportunities. If you have a large amount, you can also obtain financing resources; If there is no quantity, there is no chance of survival at all. The war in the automobile industry is so fierce that it has its industrial particularity - first of all, the industrial chain of the automobile industry is long enough;Secondly, the automobile industry is a competitive industry, non-monopoly, and the war is market-orientedMore importantly, the automobile industry has a wide reach, and various localities, banks, capital and investors are acting as the driving force and ammunition depot behind car companies. The above-mentioned person in the automobile industry said: "The failure of car sales may lead to various local financial and employment crises. "This caused everyone to be desperately throwing ammunition into it. Liu Jie, vice president of Li Auto, once said at the Guangzhou Auto Show that the penetration rate of the new energy market of more than 200,000 next year will be close to 55%, with a total of about 4 million vehicles. This means that 2024 will be an important inflection point for the automotive market, from the early Volkswagen to the late Volkswagen stage. He believes that the big challenge of this stage of transition is whether it is the head brand is crucial. If it's not a top brand, consumers won't consider you. Moreover, this will not only be a comparison between the head brand of new energy and fuel vehicles, for the late Volkswagen, it will put all the brands in the same ** range together to judge who or which ones are the first choice. Liu Jie said that the three years from 2023 to 2025 will be the most critical knockout competition for the entire industry, and even the trend of knockout is still advancing. In the past, the industry generally believed that the penetration of electrification and intelligence would be two rounds of elimination, but now it seems that they will be combined into one. The penetration of electrification involves physical and chemical elements, while the penetration of intelligence is software, which may be faster than battery technology and electric technology. In these three years of elimination, no company can sit back and relax, and no company is absolutely ahead and safe. He pointed out that by the end of next year, we may be able to see which companies will end up at the table. Zhang Junyi's market expectation for 2024 is to see if the market stabilizes in January and February next year, and if the market does not stabilize, there will be a big promotion before and after the Spring Festival to the auto show. What is disturbing is that although car companies have been declining one after another this year, they have not brought about a sharp increase in sales. Chen Qiang said that next year's battle may be more intense. Next year, the auto market will enter a more intense period of knockout rounds, which is a critical moment to decide life and death. Whether it's businesses looking to disrupt the game or those looking to further establish themselves, they've all reached a critical juncture in a bloody battle. No one can guarantee a ticket, and no one dares to let up. Imminent enemies, aggressive annual targets, contingent policy changes, pressure to liquidate goods, and even the sales boss's ass, as well as threats of life and death, have all made this wave of price cuts unprecedented in magnitude and breadth. However, just when all the best blood was selling cars, Tesla reversed the operation and recently announced a price increase. Industry insiders believe that this is in line with Tesla's style - they pay more attention to their own production capacity and rhythm than to pay attention to the dynamics of competitors. It is foreseeable that, like any historical territorial dispute, after a melee of princes, several major princes will eventually be formed, "you can't kill me, I can't kill you", and the market will enter a steady state. Chen Qiang said, "The best is yet to come. ”