The auto market battle in 2024 will come earlier than in 2023.
On February 19, the phrase "electricity is lower than oil" made BYD fire the first shot of the 2024 auto market battle. The launch of the BYD Qin PLUS Honor Edition and the Destroyer 05 Glory Edition has reduced the starting price of these two models to 7 simultaneously980,000 yuan.
One word, with! ”
In the face of BYD's "declaration of war", the attitude of Zhou Yu, deputy general manager of SAIC-GM-Wuling brand division, has also been very clear, Wuling Starlight 150 km advanced version ** from 10580,000 yuan dropped to 9980,000 yuan.
On February 19, Nezha Automobile announced that its Nezha X series would cut prices by 220,000 yuan, and the starting price of Nezha X has also come to 9980,000 yuan. Changan Qiyuan Q05 and Qiyuan A05 also followed up with price reductions, and the starting price was reduced to 7390,000 yuan, and even shouted "Electricity is lower than oil!" Low! Low! slogan.
BYD's gunshot rang out, and its own brands quickly followed up, focusing on new energy prices, and the target was collectively aimed at fuel vehicles.
Compared with 2023, the first battle in 2024 not only comes earlier, but also has a clearer direction, that is, to further erode the market share of fuel vehicles. As BYD said in response to investors: the company hopes to further accelerate the trend of oil to electricity in the automotive industry and accelerate the transformation of the entire new energy vehicle.
According to data from the China Association, in 2023, the penetration rate of new energy passenger vehicles in China has reached 347%, but Wang Chuanfu expects that the monthly penetration rate of new energy vehicles will exceed 50% in 2024.
For joint venture car companies whose profits are still in the fuel vehicle, if the overall share of the fuel vehicle market is further compressed, it will further affect the cash flow of these companies, and then hit their strategic advancement. Especially considering that the major joint venture car companies are promoting the transformation of new energy, it is a time to burn a lot of money. Wang Chuanfu started the first battle at this time, which may also be a kind of conspiracy to crack down on joint venture car companies.
Take advantage of your illness to kill you.
Unlike in 2024, the first battle that will detonate the auto market in 2023 will be fought by joint venture car companies first.
In March last year, Dongfeng Citroen announced a significant price cut of 90,000 yuan for the C6. Suddenly, "200,000 C6 is old-fashioned, and 120,000 C6 is calm and atmospheric" has become the talk of netizens across the country. Subsequently, the major joint venture car companies with fuel vehicles as the main force have come down, and the first war has spread from Hubei to the national auto market.
But this year's situation is obviously different, the company that detonated the car market has been replaced by BYD, which has the highest sales volume in China's auto market last year, and the fist product with a price cut is no longer the Citroen C6, which has a very low sales base, but the BYD Qin PLUS DM-i, which is the third best-selling sedan last year.
In fact, BYD will launch an offensive with the Qin Plus DM-i Champion Edition model in 2023, with a starting price of less than 100,000 yuan, making the Qin Plus DM-i sales exceed 300,000 units in 2023, second only to Nissan Sylphy and Volkswagen Lavida. At that time, BYD's slogan "oil and electricity at the same price" can also be seen as a precedent for "electricity is lower than oil" this year.
At present, the offensive and defensive trend between joint venture car companies and independent brands has been completely reversed, and BYD, which dominates the new energy vehicle market, has enough bullets to shoot at the old joint venture car companies.
Raw materials** are also more beneficial to independent brands. Compared with the peak of 600,000 tons of lithium carbonate, the recent ** has fallen below 100,000 yuan, which gives new energy vehicles more room for price reduction. At the same time, after BYD's annual sales have exceeded 3 million vehicles, the huge scale advantage allows the company to further reduce costs.
On the contrary, if the joint venture car companies in 2023 still have the ability to fight against the new energy impact of their own brands with the first battle, in the face of a new round of the first battle in 2024, few joint venture car companies dare to follow up.
Can't keep up. "An insider of a joint venture car company told Yiou Automobile that the first-class war in 2023 has seriously affected the profitability of the company, and if it continues to reduce prices to meet the challenges, it is definitely not a long-term business plan for the company.
In fact, last year's first-class war has made many joint ventures realize a problem, that is, in the face of the impact of new energy, whether the joint venture car companies with fuel vehicles as the main business will ensure operating profits or sales? "Now it seems that neither of them can be saved. ”
At present, the joint venture automakers are still hesitating in the transition to electrification, except for the Volkswagen IDIn addition to the series relying on price reductions in 2023, the Japanese two fields and one production, the American GM and Ford have not made significant breakthroughs in the new energy market. Due to the long-term sluggish sales of the Mustang Mach-E, Ford China will cancel the original independent and direct sales system in 2023 and hand over the operation of the Mustang Mach-E to Changan Ford.
Just when the joint venture car company is in a dilemma, Wang Chuanfu has asked BYD to aim at the second half of new energy.
At the Dream Day event held on January 16 this year, BYD officially released products such as the intelligent architecture Xuanji and the "Eye of the Gods" L2+ high-end intelligent driving assistance. Wang Chuanfu said that this year, BYD will launch more than 10 high-end intelligent driving models, and provide high-end intelligent driving options for more than 200,000 models, and more than 300,000 car bodies are equipped with high-end intelligent driving, "In the future, the company will invest more than 100 billion in vehicle intelligence." ”
How long will China's auto market be rolled?
Every business wants a bigger share, and it's still an uncertain market. Zhu Jiangming, founder, chairman and CEO of Leapmotor, once said that "volume" is a good thing, and only "volume" can roll out the competitive advantages of new energy vehicles, and it is possible to get share from the fuel vehicle market at the fastest speed.
Not only Wang Chuanfu's BYD, but also Zhu Jiangming and Leapmotor have also seen the only way to break through, that is, to roll out the share, revenue, and profit from the fuel vehicle market.
In the face of the strong rise of independent brands, joint venture car companies have not been restrained. Because in their view, gasoline vehicles will not be introduced to the market quickly, which gives them time to transform.
A person from a joint venture car company once told Yiou Automobile that from the current situation, fuel vehicles still have at least two generations of vitality, which can provide enterprises with at least 8 years to deal with the impact.
On the other hand, as the parent companies of joint ventures, major multinational car companies can still make huge profits by virtue of their dominant position in the global market. At present, General Motors, Hyundai Motors, Renault Cars and Stellantis have all released their 2023 financial data, except for General Motors, which has a small profit increase, and the other three car companies have set records in a number of profit indicators. With sufficient financial backing, it is difficult to say that the joint venture will not make a comeback.
Perhaps because of this, Chinese auto talents represented by Wang Chuanfu and Zhu Jiangming will spare no effort to accelerate the roll of the Chinese market, in order not to leave a respite for joint venture car companies.
But it can also be seen from Zhu Jiangming's words that the current Chinese auto market is far from reaching a stable state, so the "volume" and ** war are inevitable.
In the process, the profitability of some Chinese automakers will also be challenged. Taking Great Wall Motors as an example, its 2023 performance express report shows that the company's net profit is 700.8 billion yuan, down 1522%。
In 2023, the sales volume of China's auto market will historically exceed 30 million units, and the total revenue of the industry will also historically exceed the 10 trillion yuan mark. However, the first-class war and crazy involution have reduced the profit of the whole industry to 508.6 billion yuan, returning to the level of 2019. In 2019, the annual sales volume and industry-wide revenue of China's auto market were only 25.76 million units and 8 trillion yuan, respectively, which is a significant gap compared with 2023.
In a reshuffled market, it is indeed difficult for companies to achieve good earnings. However, for China's auto market, only after the elimination of smart electric vehicles can the market be expected to return to a stable structure, and that is the harvest season for Chinese car companies.