The price war is ongoing! Two new energy vehicle companies compete in price adjustments on the same day | Enterprise | Price War
On the evening of June 12th, Zhiji Automobile released the Urban Fit urban series models with a suggested retail price range of 289800 to 309800 yuan, further lowering the threshold for mid to large pure electric SUVs to below 300000 yuan.
Previously, the suggested retail price for the LS7 model released by Zhiji Automobile was 309800 to 459800 yuan, but the first batch of delivered models did not include the entry-level product priced at 309800 yuan. Yesterday, when the rear wheel drive model priced at 309800 yuan was officially launched, Zhiji added a more entry-level product to the LS7 product series, with a starting price dropping to 289800 yuan.
On the same day, NIO, which had previously insisted on not lowering prices, announced the cancellation of some free user rights and a direct price reduction of 30000 yuan for all models.
Price reduction has become a key keyword running through the domestic new energy vehicle market this year. In price wars, car companies have different means of lowering prices. Tesla, NIO, Ford Electric Horse and other brands directly announced price reductions; Brands such as BYD, Zhiji, and Ideal have lowered their product price range by introducing new models.
In addition, traditional car companies that have long adhered to price systems in the past have also begun to break the norm, including Geely, Great Wall, SAIC General Motors, Dongfeng Nissan and other car companies. When launching some new products, they have redefined price ranges. Products such as Buick Electric E5 and Nissan Qijun Ultra Hybrid Drive have changed the pricing system commonly used by relevant companies in the past.
The weak demand for automobile consumption caused by multiple factors such as the withdrawal of national subsidies for new energy vehicles and consumer overdrafts, as well as the switching of national VI B, are important reasons for this year's price war in the automobile market. Since May, the domestic car market has shown signs of recovery, but the price war between car companies has not stopped.
According to data from the China Association of Automobile Manufacturers, the retail sales of passenger cars in May reached 1.742 million units, a year-on-year increase of 28.6% and a month on month increase of 7.3%; The retail sales of new energy vehicles in the market reached 580000 units, a year-on-year increase of 60.9% and a month on month increase of 10.5%. However, new products launched by multiple brands, including Zhiji, Geely, Great Wall, Buick, etc., still offer prices lower than industry expectations; Car companies such as NIO and Wuling have also joined the price reduction army.
A management representative from the marketing department of Volkswagen's subsidiary in China told a reporter from First Financial that there was a significant difference between the first quarter and the second quarter of this year's car market. In the first quarter, due to last year's policy overdraft and other reasons, the overall market led to insufficient purchasing power; The market demand has recovered in the second quarter, but sales have been won through price wars.
According to a research report by Xinda Securities, with the easing of price wars and policy support, the car market is expected to gradually recover. Many car companies, including NIO and Xiaopeng, have stated that the turning point of their sales recovery will occur in the third quarter. However, it is worth noting that the current Chinese car market is entering a fierce knockout stage, and the price war may not necessarily end with the recovery of the market.
"The knockout stage has begun, and the price and cost of the rolls are aimed at gaining a larger market share, ultimately to survive. We predict that the price war will continue in the second half of this year," a management representative from a certain automotive company's planning department told reporters.
Starting from 2023, the competition in China's new energy vehicle market has significantly intensified, and the market has shifted from a supply shortage to an oversupply. Zeng Qinghong, Chairman of GAC Group, and Wang Chuanfu, Chairman of BYD, all stated that the automotive industry has entered the stage of elimination.
In the fierce knockout stage, car companies such as Tesla and BYD offer more competitive product prices, aiming to enhance their head effect and achieve a "winner takes all" strategy; Automobile companies such as Changan, Geely, and Great Wall are accelerating their transformation towards new energy vehicles. Products with competitive prices will accelerate the speed of their transformation; Enterprises such as Xiaopeng and NIO are facing phased difficulties, and reducing prices or lowering the price range of new products has become an important means for enterprises to reverse their decline.
A senior executive from a car company has stated that the current market is extremely chaotic, with many car models appearing to be unprofitable. However, everyone is competing for prices and resorting to any means to survive.
"By 2025, the top ten car companies in China may occupy 90% of the market share, which means most peripheral car companies will be eliminated." Li Xueyong, Deputy General Manager of Chery Automobile and General Manager of Marketing Company, believes that the price war in the car market is bound to be fought until the end of this year, or even next year. Car companies must be prepared to fight for 20 months, and by the end of next year, it will be clear who can survive in the Chinese car market.
