Anyone who has fought the landlord knows that the "big card" is generally put at the end. However, BYD did not play cards according to the routine, and directly played the "king bomb" on the second day of resumption of work in the Year of the Dragon.
BYD officially announced the launch of the "Glory Edition" of the Qin PLUS and Destroyer 05 models, with a starting price of only 7980,000 yuan. In other words, compared with the previous champion version of the model, the ** model has been reduced by 20,000 yuan. In BYD's words, "electricity is lower than oil", which can be described as very arrogant. As a result, BYD also likes to mention a new nickname - "lower than oil".
What's more, the Honor Edition model has not been reduced because of the price reduction. The Glory version of the motor and endurance have not been weakened, and even in terms of intelligence, they have been further improved.
Such a sudden price reduction operation also made the original champion version owners dissatisfied. It was originally a champion version that I bought for cost performance, but I didn't expect that the result was less than 1 year, and there was a cheaper glory version. It's like **, I thought it was "**", but I didn't expect it to be copied to "halfway up the mountain".
As a result, I saw a lot of complaints about the "** change" of the new car on the Internet. However, what is interesting is that BYD did not officially announce the sincere compensation for this price reduction, and the old car owners did not take action to protect their rights, at most they just complained on the Internet. The reason may be because the cost performance of the champion version has been "in place" in the hearts of many users, they just didn't expect BYD to explode so much at the beginning of the year, and hit the ** to "798", leading new energy vehicles into a new era of "electricity is lower than oil".
BYD's ** butcher knife slashed at the lifeblood of the joint venture brand
Some people say that BYD's price cut this time, the most "painful" is the joint venture brand fuel vehicle.
I have to admit that although with the advantages of electrification transformation, independent brands have a higher and higher voice in various market segments. However, in the largest 100,000-level family car segment in the consumer market, joint venture brand fuel vehicles are still strong. For example, in the top 10 compact car sales in 2023, joint venture brands still occupy half of the country, among which Nissan Sylphy and Volkswagen Lavida and other joint venture fuel models are firmly in the top three.
However, this momentum will change dramatically as BYD holds the banner of "electricity is lower than oil". First of all, its "lower electricity than oil" advantage not only breaks through the moat of the joint venture brand, but also directly breaks through the user's "consumption mind" and reduces the user's wait-and-see mood in the joint venture brand fuel vehicle and independent new energy workshop.
In fact, this has been fully proven in last year's Qin Plus Champion Edition. At that time, the Qin plus Champion Edition relied on 9With a starting price of 980,000 yuan, it has entered the market hinterland of the joint venture brand under the banner of "the same price of oil and electricity". At that time, the Qin PLUS Champion Edition quickly formed a strong competitive advantage over joint venture competitors such as Sylphy and Lavida by virtue of its larger space, better configuration and hybrid advantages. As a result, we see that in 2023, the cumulative sales of the entire Qin PLUS series models (including EVs) will reach 382145, surpassing Sylphy in one fell swoop and becoming a new generation of "family sedan king".
Just imagine, the power of "oil and electricity at the same price" is so great, and the glorious version of "electricity is lower than oil" will form the final stranglehold on the joint venture brand. Moreover, this strangulation will be "deadly". Because BYD's price reduction this time is comparable to an atomic bomb and has "nuclear proliferation".
We saw that after BYD made a move, many car companies also quickly responded. Among them, SAIC-GM-Wuling announced at the first time that the price of its plug-in hybrid model Wuling Starlight 150km advanced version will be increased from 10580,000 yuan was adjusted to 9980,000 yuan, the price dropped to less than 100,000 yuan. Subsequently, Nezha Automobile also followed up quickly, announcing that all products would enjoy a direct discount of up to 22,000 yuan. Its CEO Daniel Zhang even shouted on social platforms, "We also took the initiative to open the volume."
It is reported that Nezha X's new model Nezha X 400 Air is officially launched, with an official guide price of 9980,000 yuan. Nezha x other versions of the model dropped by 220,000 yuan, and the adjusted selling price is 10480,000-12480,000 yuan. At the same time, Nezha Aya dropped by 8,000 yuan for the whole system, and the adjusted ** range was 6580,000-8080,000 yuan.
In addition, Changan Qiyuan announced that its A05 model is limited to 7890,000 yuan, 1000 yuan cheaper than the Qin plus glory version, and also shouted the slogan "electricity is lower than oil", the meaning of the target is very obvious. The Geely Emgrand L HIP Dragon Edition was announced on February 20, 8The minimum sale is 980,000 yuan, which is equivalent to the entry price of about 20,000 yuan. In addition, Leapmotor posted a blog on the evening of the 19th: "Is the volume finished? Not enough volume at all! In March, the whole family bucket of Zero Run was rolled together! ”
It can be seen that after BYD's start of the "king bomb", other independent brand car companies have followed up and offered a big move to reduce prices, and the main product is the 100,000-level sedan car product. In other words, as more self-owned brand car companies drop prices in the 100,000-level market, it will not only pose a serious threat to the viability of joint venture brands in the 100,000-level market, but will even accelerate the further popularization of electrification in the 100,000-level market.
The ** war set off by BYD is not easy to "follow".
All in all, BYD's first-class battle this time not only cut the lifeblood of the joint venture brand, but even drove other independent car companies to respond in a hurry, reshaping the first-class system of 100,000-level new energy vehicles. However, the ** war set off by BYD is not easy to follow. The reason is very simple, BYD's price reduction still has profit margins, and many car companies follow up on price reductions, which may not make money, or even lose money.
According to BYD's 2023 performance forecast, BYD's net profit attributable to the parent company in 2023 will be 29 billion yuan to 31 billion yuan, a year-on-year increase of 7446%-86.49%。The net profit attributable to the parent company after deducting non-recurring gains and losses was 27.4 billion yuan to 29.7 billion yuan, a year-on-year increase of 7522%-89.92%, which is currently the most profitable new energy vehicle company.
However, in addition to BYD, only a few car companies such as Ideal and GAC Aion have achieved profitability. Including Great Wall, Changan and other independent brand car companies, in the new energy business is still in a state of loss. Not to mention the new forces, last year, including Weimar, Tianji, Ziyoujia, Hengchi, Aiways, Reading, etc., new power car companies, have been exposed to poor management. This year, Gaohe Automobile was exposed to problems such as suspension of work and production, and even layoffs and arrears of wages, and the bankruptcy crisis was on the edge of the cliff. As for those who survive, such as Weilai and Xiaopeng, they have suffered serious losses year after year. Therefore, for most new energy vehicle companies, there is no confidence to fight a sustained war.
In this regard, Wang Chuanfu, chairman of BYD, once said: "10-200,000 BYD has pricing power, but I don't want to make everyone uncomfortable." "Now, BYD doesn't pretend, and just flips the table. So, why does BYD have the pricing power and the confidence to flip the table, so that the product can be reduced again and again, and at the same time, it can also ensure profit margins? Why?
First, thanks to BYD's large-scale advantages. With the gradual increase in BYD's sales, it achieved an annual sales volume of 3 million last year, which further optimized BYD's large-scale effect. The data shows that BYD last year.
The gross profit margin for the first and second quarters was as follows: 6%, while in the third quarter it increased to 222%, which is almost the highest in the automotive industry at the moment.
Second, BYD has the terrible competitiveness of the whole industry chain self-control. BYD is currently the only Chinese car company that has mastered the R&D, design, production and manufacturing of the entire industrial chain of the core technology of new energy vehicles, and has basically achieved self-sufficiency in the three major fields of batteries, electronic control and motors. In this regard, there is a saying in the industry, "In addition to glass and tires, BYD's parts all come from its own first-class chain system." Because of this, BYD is not only not afraid of foreign companies in core technology. What's more, with its excellent cost control advantages, BYD has a firm grasp of the pricing power of its products.
In short, with the forward-looking and extensive layout of the whole industry chain, coupled with the increase in the scale effect brought about by the explosive growth of sales, BYD's car-making costs have naturally dropped sharply. In this way, BYD not only has more confidence in the terminal to fight the best war, but also has it at its fingertips.
Therefore, BYD took the lead in cutting prices this time, so that many new energy vehicle companies have to face an extremely headache and tangled problem: to follow up or not to follow up? If you follow BYD to fight the first battle, the operating pressure will increase sharply; If the price is not reduced, it will be snatched up by Qin plus and forced to enter a passive situation. As we mentioned earlier, car companies such as SAIC-GM-Wuling, Changan and Geely still chose to follow suit. Whether to sell cars at a loss or seize sales and markets, many new energy vehicle companies choose the latter.
It's just, how long can this ** war last? I'm afraid there will be a big question mark. Especially for new forces like Leap and Nezha, who blindly follow up the ** battle of the "big factories", I am afraid that they will be injured in the end.
On the other hand, BYD's butcher's knife is not only aimed at the joint venture brands, but also the second- and third-tier new energy vehicle companies with slightly weaker foundations.
BYD: Hit the sixth in the world
Just like Wang Chuanfu said, he was reluctant to tear his face with everyone in the ** battle before, because he "didn't want to make everyone uncomfortable", but why didn't BYD bear it this time? The reason is because BYD is under a bit of pressure this year.
Last year, BYD sold 3.02 million vehicles, becoming the ninth largest car company in the world in one fell swoop, creating a historical myth of Chinese car companies. This year, BYD's sales target is 4.5 million to 5 million units. If we compare last year's sales, this target will surpass Honda (3.97 million units sold in 2023) and GM (4.87 million units sold in 2023) to become the world's sixth largest automaker.
Is this sales difficult? Judging from BYD's start in 2024, this sales volume is obviously not easy. According to the data, BYD's sales volume in January 2024 will be 20150,000 units, although a year-on-year increase of 3314%, but 41% higher than December last year, not only lost the monthly sales crown that had been maintained for 17 months, but was even overtaken by Geely in one fell swoop.
Although January and February are traditionally off-seasons, it is not surprising that brand sales have declined. However, it is still rare for BYD to fall so much. For comparison, Geely Automobile's sales in January this year were 21350,000 units, up 110% y/y. Chery Automobile's sales in January were 20990,000 units, a year-on-year increase of 1075%, which is also the fourth consecutive month that Chery's monthly sales exceeded 200,000 units.
It can be seen that BYD's sales have declined sharply this time, not only due to market factors, but also due to its own reasons. In the final analysis, the product is not strong.
Relying on the first-mover advantage of early layout and early leadership in the new energy market, BYD has changed its life in the new energy market and has become the first brother of its own brand from a second-rate car company in the past. However, as competitors catch up, they not only do not lose to BYD in product power and three-electric technology, but even have a late-mover advantage, in terms of intelligence, they are better than BYD, and consumers will naturally choose more cost-effective products.
So we saw that BYD brought a more sincere Glory Edition model at the beginning of the Dragon Year, and it also upgraded the intelligence of the product. And, this is the beginning, referring to last year's champion version of the model, next, including Song, Yuan, Tang and other dynasty series, as well as seals, dolphins and other marine series will also launch the "electricity is lower than oil" glory version of the model, the real ** war is still to come. At that time, BYD will rely on the ultimate cost performance, while impacting the joint venture brand, it will also challenge its own competing products, and there is a great trend of "Qin sweeping Liuhe".
Therefore, let's wait and see how joint venture brands and independent competitors will "follow" next.