In the last month of 2023, car companies are "crazy", and many car companies have announced year-end promotion policies, and the impulse war is about to start, including BYD, Changan Automobile, Changan Qiyuan, Zhiji Automobile, Leap, FAW Toyota, and Dongfeng Citroen Automobile. At the same time, major departments have also introduced pro-consumption policies to further drive the growth of auto market sales.
Undoubtedly, the involution of the car ** is good news for consumers who hold currency to buy, and they can get their favorite vehicles with a lower cost, but from the perspective of the automobile market, the price reduction ** reflects the helplessness of the market and car companies, and it is also a "dose of poison" for the car market.
What is the pressure behind the war?
Now the year-end impulse has become a common practice in the automotive market. At the end of the year, major car companies have launched price reduction campaigns, aiming to boost sales performance by attracting consumers. It is also one of the most active times of the year in the automotive market. As a result, it can be seen that both local departments and major car companies have launched corresponding policies to promote automobile consumption.
It is understood that Nanjing, Changsha, Suzhou and other places have launched a "policy package" to promote automobile consumption, and these places encourage automobile consumption by issuing consumption vouchers or giving replacement subsidies to stabilize and expand the automobile market. In terms of car companies, BYD officially announced a direct drop of 10,000 yuan for a number of cars, FAW Toyota for some models to enjoy a time-limited purchase tax of 5,000 yuan, and some models of Changan Automobile for a time-limited drop of 30,000 yuan, and even Tesla, known as the butcher, is also giving benefits. It can be said that the forces of all parties have pushed the price reduction frenzy of the auto market to a new height.
Behind the price reduction and profit concession of car companies is the huge pressure in many aspects, not only to boost the vitality of automobile consumption, but also to clear inventory. You must know that during the epidemic in the early years, domestic consumers' confidence in income growth declined. Although the society has entered a normal state of operation in 2023 and the income of domestic consumers has increased, the desire to buy a car is still far less than before the epidemic.
The dealer inventory index is a manifestation of this. According to the statistics of the China Automobile Dealers Association, the inventory warning index of China's auto dealers in November was 604%, up 18 percentage points, the inventory warning index is above the boom and wither line, and the automobile circulation industry is in a recession range. In this case, major car companies have to exchange price for volume to stimulate automobile consumption in order to better complete the production and sales plan formulated at the beginning of the year.
On the other hand, the background of the wave of price reductions is also due to the gradual saturation of the automobile market. The domestic auto market has changed from an incremental market to a stock market. With the rapid development of China's economy, automobiles have changed from a luxury to a means of travel for every household, and are in a state of oversupply. However, the saturation of the market also means that competition is intensifying, and major car companies have to improve their competitiveness by cutting prices in order to attract consumers.
It can be seen that this year's car companies are more complicated than in previous years, in addition to increasing sales, there is also pressure from inventory, survival, etc., and so on, which can be attributed to the fact that the car market environment is too sluggish, and the need for price reduction and profit concessions to boost car consumption, and the amount of this booster is more than before.
Why is price reduction also a "poison"?
As a consumer, what I like most is to see today's scene, the more fierce the battle of car companies, the greater the price reduction of new cars, then consumers can buy more advanced models with less cost, so from the perspective of car purchase, the war at the end of the year is more beneficial than disadvantageous.
However, from the perspective of the entire market, Brother Yu believes that the pros and cons of the ** war are very obvious. Let's talk about the positive side first, the more obvious point, as mentioned above, can allow car companies to sell new cars and boost the consumption of the auto market. However, this kind of consumption also has a disadvantage, will overdraft the market consumption power in advance, then when the price reduction of the car narrows, the car market sales will still stagnate, and even appear serious, the previous fuel vehicle purchase tax exemption is a good proof.
For car companies, the war has also seriously reduced the profits of models, and even if there are more new car sales, they will not be able to bring considerable benefits to the company. However, for any business, only profit *** has the conditions to bring better products and services to consumers. Otherwise, car companies can only reduce costs by cutting costs, reducing manpower, replacing raw materials, and not paying attention to quality inspection, which will lose market competitiveness in the long run.
Seeing this, it is estimated that careful people have found the word "manpower reduction". Yes, the longer the war lasts, the more people will lose their jobs. Because the profits of car companies cannot be guaranteed, and they are unable to withstand the suppression of opponents, in the end, weak car companies will be eliminated by the market. At the same time, the automakers' parts and service stores will be affected, which also means that the employees working in the corresponding enterprises will face the risk of losing their jobs.
Of course, the impact of the car company war on the second-hand car industry can not be ignored, the model after a large price reduction, then the landing price of the new car is cheaper than the second-hand car, in this case, how to sell the second-hand car?
Therefore, the first war is a double-edged sword, it can promote the sales of car companies, but it will also be counterattacked by the first war, and the car companies that have the ability to take over will obtain considerable results, and the enterprises that cannot resist the impact will be kicked out in the cruel reshuffle of the market. It can be seen from the brands that this price cut that most of the traditional car companies are involved, and there are few new car companies, because most of the new forces have not yet entered the profit stage, and their models not only have no room for price reduction, but even sell them at a loss.
Behind the overall price reduction of automobiles, it is the excessive pressure on the automobile market that needs to be boosted urgently, and the inventory index is rising, and car companies have to compete for customers at low prices to stimulate the desire for automobile consumption. After this round of price cuts, car companies and related chains will be reshuffled, and companies that cannot resist the tide of price reductions will be eliminated, and only strong companies can stand firm in the market.
Moreover, this round of ** war also has the help of local subsidies, according to past experience, the pull effect of ** subsidies on the car market is often direct and effective, although it will overdraft market demand, but will drive the development of the entire automobile industry chain.