On the evening of January 1, 2024, Xpeng Motors held a launch conference for its first MPV model, the Xpeng X9, a seven-seater pure electric MPV, in Guangzhou, kicking off the launch of new cars in China in 2024. On the evening of January 3, the first model of Chery Fengyun series, Fengyun A8, was launched in Shenzhen. On the evening of January 5, the new generation of pure electric flagship sedan Geely Galaxy E8 was launched in Hangzhou. As of the eve of the Spring Festival holiday, more than a dozen new models have been launched in China in 2024.
On January 16 this year, Wang Jun, president of Changan Automobile, said at the 2024 Changan Automobile Global Partner Conference on January 16 that there will be 202 new products on the market in China's auto market in 2024, including 152 new energy products, accounting for 75%. Wang Jun believes that with so many new products on the market, the Chinese auto market in 2024 will not have the most volume, but will only have more volume.
According to relevant statistics, in the past few years, hundreds of new models have been launched in the domestic market every year. This year is twice as many as in previous years.
New car models are divided into annual facelift models and brand new models. Comparatively, there are few changes to the facelifted models, while new models are either replacements or all-new models. The Xpeng X9, Chery Fengyun A8 and Geely Galaxy E8, which were launched at the beginning of the year, are all brand new models.
In the face of fierce competition in China's auto market, many auto OEMs have launched more new models as one of the main magic weapons to improve market competitiveness. However, it should also be noted that there are already too many models on sale in the Chinese auto market, and there are a lot of competing products in almost every market segment.
According to the statistics of Gasgoo, there are currently 129 Chinese and foreign passenger car brands in the domestic automobile market, and 820 models are on sale. Among them, there are 489 Chinese self-owned brand models and 331 foreign brand models. Among the 820 models on sale, 398 are gasoline models, 210 are pure electric models, 110 are plug-in hybrid models, and 102 are hybrid models.
According to relevant statistics, among the 820 passenger car models currently on sale, 6 will sell more than 200,000 units of a single model in 2023, 21 will sell more than 100,000 units, and 26 will sell more than 50,000 units. In other words, there are only 53 models with annual sales of more than 50,000 units of a single model, accounting for 646%。About three-quarters of the annual sales of a single model are less than 10,000 units. There are also many models with annual sales of less than 1,000 units.
JV brand cars produced in China are sold all over the world, and the sales of a single model are not only in the Chinese market, but also in foreign markets. The market for China's own brand automobiles is mainly domestic, and the sales of single models are also mainly domestic.
Except for a few luxury brand cars, the vast majority of single models must reach a certain number in order to be able to share R&D costs and make reasonable profits. If the sales volume is too low and the cost per car is too high, the car is a failed product.
Many years ago, when An Conghui first became the president of Geely Automobile, he decisively canceled some new products under development. He proposed that every new model launched by Geely must be a high-quality product and a popular product. Geely Automobile's new models must have a minimum monthly sales of more than 10,000 yuan. It is precisely under the impetus of the boutique strategy that Geely Automobile has relied on one boutique model after another, and has maintained the top sales of China's own brand cars for many years.
Automobile is a capital- and technology-intensive industry, but also a competitive industry. Automobile companies must continue to invest a lot of R&D funds to ensure that new products are not outdated and have strong market competitiveness. A new product must have good market performance in order to be able to recover R&D costs and make reasonable profits. Therefore, before putting on a new model, it is necessary to do a good job of market research to ensure that the new model can achieve good market performance.
There are too many new models, and sometimes they bring vicious competition between the models of the brand, and they fight themselves. In addition, a model has its reasonable life cycle, and it is neither economical nor scientific to rush to launch a replacement model before the end of the life cycle of the previous generation model.
At present, domestic car brands and car models have exceeded market demand, and supply exceeds demand. Launching too many new brands and models will only intensify the competitive situation.
Chinese cars need new models, but too much is definitely a great waste of resources. (ENDS).