Are you still waiting for the purchase?, Price war recreates car models | sales | price war

"More cost-effective than blind ordering" and "closer to cost price", on the 16th, China News Service visited multiple car stores in Beijing and found that the "Golden September and Silver October" sales peak season is approaching, and many car companies are once again engaged in price wars.

According to incomplete statistics, since August, more than 10 car companies including Tesla, Geely Krypton, and Zero Run have announced price reductions for some of their models, with single car price reductions ranging from thousands to tens of thousands of yuan. Is it time for consumers to take action?

Tesla launches a 10000 yuan clearance discount

On the 16th, Zhongxin Jingwei learned from a Tesla store located in Beijing Heshenghui as a consumer that the recently popular new Model 3 may be launched in the next two months and has started receiving orders for the new model.

"The validity period of Tesla orders is only 60 days, which means that within 60 days, the new Model 3 will definitely be available," said the salesperson at the Tesla store mentioned above.

According to Tesla sales personnel, if considering the Model 3 model, consumers can pay a deposit of 1000 yuan to queue up. After the new model is launched, they can choose to pick up the new or old model independently. If they don't like both, they can also choose a refund.

As for the price of the new Model 3, the salesperson stated that the new model will not be discounted. "Lowering the price will not result in a price reduction. There is no such thing as adding a new configuration and lowering the price."

At the turn of the new and old models, Tesla has launched a promotional mode of "two discounts in three days".

On August 16th, Tesla's official Weibo account announced that all models of the new Model S/X can enjoy a discount of 54000 to 70000 yuan. After the reduction, the starting prices of the current Model S and Model X are 754900 yuan and 836900 yuan respectively. At the same time, you can enjoy benefits such as a 7000 yuan referral reward. On August 14th, the starting price of the Model Y Long Range Edition was adjusted from 313900 yuan to 299900 yuan, and the Model Y High Performance Edition was adjusted from 363900 yuan to 349900 yuan.

"It's impossible to release a new model when there is still a lot of inventory for the old model, so no one will buy the old model, and the pickup rate for the old model is not high now," said Tesla salesperson.

According to Tesla's official Weibo account, starting from August 14th, the starting price of the Model Y Long Range Edition has been adjusted from 313900 yuan to 299900 yuan, and the Model Y High Performance Edition has been adjusted from 363900 yuan to 349900 yuan. In addition, the current Model 3 enjoys a limited time insurance subsidy of 8000 yuan.

However, according to sales personnel, although the price of the Model 3 has not changed, consumers can enjoy a maximum purchase discount of 11500 yuan. "The Model 3 model now has two discounts, one is a cash subsidy of 8000 yuan, and the other is a discount of 3500 yuan from the old car owners' recommendation activity, with a total discount of 11500 yuan. The prerequisite for the subsidy is to collect the car before September 31st."

"Buying a car now is more cost-effective than blindly ordering it"

During a visit by Zhongxin Jingwei, it was found that almost all car companies have displayed display boards with promotional words such as "limited time immediate reduction" and "August car purchase gift" at the entrance of their stores, and key information such as price and discount intensity have been highlighted in red.

"Buying a car now is more cost-effective than blindly ordering users," said a salesperson at a Zhiji store located in Heshenghui, Beijing. It is reported that the current price of the Zhiji LS7 is 329800 yuan, with a maximum discount of 37000 yuan. In addition, there are optional limited time free features such as car paint and seat heating. The originally one-year free intelligent driving has also been upgraded to lifelong free.

In addition to Zhiji, many car companies have also promoted "cost price". "Our car doesn't even have an internal employee price, and after the price reduction, the cost is basically here," said a salesperson at the Jike Auto store located in Changying, Beijing.

It is reported that the YOU, ME, and WE versions of the Geely Krypton 001 model have been reduced by 37000, 30000, and 31000 yuan respectively, with starting prices dropping to 349000, 319000, and 269000 yuan.

The salesperson of Jike Auto stated that the price reduction this time is actually an unbinding of equity, canceling the interest free loan and optional equipment fund given as gifts. "Jike 001 has been falling back and forth, and there won't be much room for price reduction."

Zero Run has also launched a discount promotion, with some versions of Zero Run C11 and C01 offering a maximum price reduction of 20000 yuan.

"The cost of batteries has been reduced, and Zero Run cars basically give 70% of their gross profit to users, so the reduced costs are directly treated as price reductions," said a salesperson at the Zero Run store located in Heshenghui, Beijing.

Or because the visit is during working hours, most stores do not have consumers looking for cars. It is worth noting that Zhongxin Jingwei has left contact information at multiple stores such as Jike, Tesla, Zhiji, Tengshi, Lingpao, BYD, etc. As of the time of publication, only Jike's sales personnel have pushed for subsequent car purchases through phone calls.

Is it time to get it?

Zhang Hong, Secretary General of the New Energy Branch of the China Association of Automobile Manufacturers, pointed out to China News Service that the "Golden September and Silver October" is a traditional sales peak season. Therefore, some car companies have released some production capacity in advance and done some promotional preheating, which is a common method. There may not be a large-scale price reduction wave in the second half of 2023.

"How can car companies survive and develop without any benefits?" In Zhang Hong's view, car companies with large production, sales, and delivery volumes have basically compressed their discount space, and there is not much room for further price reductions. Taking the Dongfeng series, which experienced a wave of price cuts in the first half of 2023, as an example, according to the profit warning issued by Dongfeng Motor Group on August 14th, the company expects its net profit attributable to shareholders for the first six months of 2023 to decrease by 75% to 80% year-on-year.

"If car companies are constantly reducing prices and promoting products, when should consumers take action?" In Zhang Hong's view, although price reduction is a more effective promotion method, its charm lies in orderly intervals. If prices are lowered and promotions are carried out year-round, consumers will also lose their sense of excitement. Moreover, consumers have always been willing to buy higher rather than lower, and the price reduction wave in March this year did not bring about a car buying frenzy, which is a very valuable lesson to learn from.

According to a report from the China Automobile Distribution Association, only 24.9% of dealers achieved their half year sales target in the first half of 2023. The China Association of Automobile Dealers stated that the automotive market in the first half of 2023 is still in a recovery period, and manufacturers' excessively high annual sales targets have led to an imbalance between supply and demand in the automotive market. Multiple factors have led to multiple large-scale and significant price reductions for new cars, causing consumers to hold onto the market and suppress the release of consumer demand.

But there are also opinions in the industry that price wars will become increasingly fierce. Haitong International pointed out in its research report that it is expected that the price war of new energy vehicles will enter a white heat in the second half of 2023, and the performance of various car companies will gradually differentiate.

The China Association of Automobile Manufacturers (CAAM) stated that as the overall market sales performance weakens in different months of the year and the impact of the same period last year's base, considering factors such as maintaining exposure, achieving annual targets, and forming sales potential for the second half of the year, it is expected that some segmented markets will continue to maintain regular promotions, and it is not ruled out that some car companies may experience countercyclical increased promotions.