Make up another 8,000 yuan, BYD set off "World War II"

Car Market Observation

2024-05-05 11:11Posted in Shandong Automobile Creators

After the Spring Festival holiday in 2024, BYD will reduce the price of 8 main models in 12 days, kicking off the price war. Only 60 days have passed, BYD has started the second price war, and the Dynasty has launched discounts for various models, replacing an additional subsidy of 8,000 yuan.

As we all know, the new energy vehicle market is very volatile, not only the technical volume configuration, but also the price. The technology of new energy vehicles is constantly updated, but the price is getting lower and lower. The price war has changed from one round a year to several rounds a year, and the price reduction has increased from a few thousand yuan to tens of thousands of yuan, which can be said to be in full swing.

At the beginning of 2024, the price war will be rekindled, from February 18 to March 1, that is, in the 12 days after the Spring Festival holiday, BYD intensively released the "Glory Edition" of eight main models, a significant feature is the price adjustment, setting off this year's Glory War, with a maximum drop of more than 30,000 yuan.

From the 2023 Champion Edition to the 2024 Glory Edition, BYD's "price for volume" routine has been tried and tested. After the price adjustment, BYD swept the 8-250,000 new energy market, which not only intensified the competition of new energy vehicles, but also further reduced the share of fuel vehicles Lavida and Sylphy.

One stone stirs up a thousand waves. After BYD's price adjustment, Changan, Geely, Chery and other car companies have cut prices to respond, and many joint venture car companies are also struggling to fight back, and the price of fuel vehicles has reached a record low. Even Tesla has been a little passive, adjusting prices twice in April alone. Price adjustment is a double-edged sword, and a price reduction means lower profits.

However, after the price cut, BYD not only achieved a sales blowout, but also a large increase in profitability. According to official data, BYD sold 312048 vehicles in April, a year-on-year increase of 48.96%, and from January to April, BYD sold 939,500 vehicles, a year-on-year increase of 23.24%, and 300,000 units have become an important label for BYD.

At the same time, BYD achieved revenue of 124.94 billion yuan in the first quarter of 2024, a year-on-year increase of 3.97%, net profit attributable to the parent company of 4.57 billion yuan, a year-on-year increase of 10.6%, non-net profit of 3.75 billion yuan, an increase of 5.2% year-on-year, gross profit margin of 21.9%, and net profit margin of 3.8%. After the price cut, the price of BYD's bicycles has declined, but the profit is still considerable.

It is undeniable that the effect of BYD's price for volume is obvious, and it can also be said that the strategy is correct, and price reduction is an important means to achieve the fastest effect and seize the share of competitors at the same time. Standing at the new starting point of 300,000 vehicles, will BYD accept it when it sees the good, or will it take advantage of the victory to pursue and expand the results? BYD told the answer with practical actions.

During the May Day holiday, BYD suddenly released the news, and the price war broke out again. BYD has launched a preferential car purchase policy for various models of its dynasty network, with a bicycle replacement subsidy of up to 18,000 yuan, including a national subsidy of up to 10,000 yuan and a BYD subsidy of up to 8,000 yuan.

The subsidy is 8,000 yuan more than the national subsidy, which is equivalent to another 8,000 yuan discount. At the same time, BYD Dynasty has also launched a corresponding financial policy: choose one of three financial schemes: 0 down payment, 0 interest and 0 monthly payment. Whether it is the trade-in policy or the financial purchase of a car, it is the latest major trend in the industry.

Among them, the trade-in strategy corresponds to "users who scrap fuel or new energy passenger vehicles and purchase new energy passenger cars will be given a one-time replacement subsidy of 10,000 yuan." BYD subsidized an additional 8,000 yuan, which is also the second "price reduction" this year, and the time between the two price adjustments is only 60 days.

Although there is a policy promotion, it also reflects that under the fierce competition, BYD's time period for adjusting prices has been shortened again. Referring to 2023, after BYD launched the Champion Edition price reduction, it was not until Double 11 that the price was adjusted again. This time, the time was fully advanced by half a year.

Not only BYD, during the May Day holiday, many car companies have successively released this month's preferential strategies, mainly for trade-in and financial car purchase discounts. FAW Toyota trades in the old for the new, with a maximum subsidy of 23,000 yuan and a factory subsidy of up to 16,000 yuan. SAIC-GM Buick offers a maximum discount of 65,000 yuan. Geely Galaxy L series has been officially dropped for the second time before the holiday.

The reason why BYD has reduced prices and increased revenues has a long-term product planning and layout, and every price reduction is by no means a whim. Since entering 2024, BYD has been fighting a price war while constantly planning the layout of new cars. From Yuan UP to Qin L, the two new models have covered the gaps in the market segment, and may be the next main force in the near future.

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