Since the end of last year, new energy vehicles have set off a wave of price increases. Under the leadership of tesla, BYD, Weilai, Xiaopeng Automobile and other brands in the first echelon, almost all mainstream new energy models in the market have participated in this wave of price increases. However, traditional car brands seem to be unable to stand alone, and recently, Mercedes-Benz announced a wide range of price adjustments in China. There are more than ten models, including imported cars and some domestic models, with the largest increase of more than 120,000 yuan.
Will This price adjustment of Mercedes-Benz become the first domino of the domestic traditional luxury brand, or even the price increase tide of the traditional automotive industry? After the "general rise" of new energy vehicles, is the follow-up of traditional cars really stressful, or "taking advantage of the fire and robbery", or is there something else hidden?
The price increase is "equal", and foreign countries have already begun
Mercedes-Benz's price adjustment in China has set off a lot of waves, but in fact, looking at the global market, the price increase of traditional luxury brands based on BBA is not an isolated case. For example, this year, Mercedes-Benz, BMW, and Audi are very "tacit" in the Indian market, with a price increase of about 3-3.5%. The "caliber" is basically due to the impact of logistics, raw materials and other input cost factors. Earlier, for the Australian market, BBA has also adjusted the price of its models several times in recent years. This is also affected by inflationary pressures in Australia and exchange rate fluctuations between the Australian dollar and the euro. With the increase in raw material costs and the impact of the international environment, the price increase of BBA may further affect the European and American markets.
In this way, the BBA's price adjustment for the Chinese market has been regarded as "mercy", but with the "loss" of Mercedes-Benz, perhaps the large-scale price increase of traditional luxury brands will not be too far away. If the protagonist of the shortage of supply chain in the automobile industry last year was semiconductor materials such as chips, then this year's semiconductors have not yet withdrawn, and other bulk raw materials, as well as pressures such as logistics and transportation, are all "debuted".
First of all, in terms of semiconductors, The Ukrainian neon gas supply supply, which accounts for more than half of the global market, coupled with the earthquake in Japan caused Renesas Electronics to stop production for a while, and STMicroelectronics recently announced a price increase for chips. The supply of automotive chips, which seemed to have eased down at the end of last year, seems to have intensified again.
In addition, the geopolitical conflict in the European region has also affected the supply chain system of traditional European car companies, including BBA. For example, many Ukrainian suppliers that produce automotive wiring harnesses and other parts for European car companies have stopped production. The rise in raw materials is not only related to the power battery. Including iron, copper, aluminum, rhodium, palladium and other metals needed for automobile manufacturing have increased significantly. And most of the luxury brand models are well-materialed, the replaceability is weak, and the impact of the industrial chain will be significantly greater.
Rising costs = rising prices?
But does cost growth necessarily equal price growth? Obviously, it's not. Regardless of the first-line luxury brand of Mercedes-Benz, it operates in daily supply chain management and anti-risk ability. From the perspective of profits alone, the BBA is facing the "crying poverty" of various input pressures, which seems to be a bit short of breath.
In 2021, affected by factors such as the epidemic and semiconductors, Mercedes-Benz still ranked first in the BBA with operating income of 168 billion euros and net profit of 23.4 billion euros. BMW, as the first brother of new sales in the BBA, is also the only brand in the three companies last year that had positive year-on-year sales growth. Revenue of €111.2 billion and net profit of €12.4 billion also increased significantly. Although Audi became the "third brother", its revenue of 53.068 billion euros in the whole fiscal year still increased by 6.2% year-on-year. The net profit of 5.5 billion euros is worthy of the role of the "profit cow" of the Volkswagen Group.
Looking at the financial reports of the three companies, the frequency of keywords such as cost optimization and sales growth of high-end car series is quite high. The eye-catching financial report data also shows the resilience of these three first-line luxury brands in the process of risk resistance and transformation. However, the "dividend" in this regard has no plan to give way to consumers for the time being. This point scores objective and subjective dimensions to talk about.
Objectively, in the automotive industry in the stage of new energy transformation, the BBA, as a traditional strong, needs to bear more pressure if it wants to keep its position. In addition to the excellent revenue data, BBA has also significantly increased its own R&D investment. For example, in the 2021 fiscal year, Mercedes-Benz's R&D expenditure reached 7.7 billion euros; BMW's R&D investment was 6.299 billion euros, an increase of 10.7% year-on-year; and Audi's R&D investment was 3.93 billion euros, accounting for 7.4% of total revenue.
Of course, the money should be used on the "blade", but is the growth of shareholder dividends used in the "blade"? This brings it to the subjective side, the three first-line luxury brands of the BBA, due to the relationship between supply and demand, also have the confidence to sink the pressure of the industry to the market terminal. Under the trend of electrification in the second echelon, including Lexus, Cadillac, Volvo and other brands, the first-line status of traditional fuel vehicles has been quite solid.
Although the penetration rate of new energy vehicles is rising steadily, after all, fuel vehicles still occupy an absolute advantage in sales. In particular, high-priced, high-margin models, although they are more affected by factors such as supply chain, their supply and demand are also more "unequal". For example, the models of Mercedes-Benz's price adjustment in China are basically the original price of about 400,000 yuan, or even millions of yuan of high-end models. One of the more interesting points is that mercedes-benz GLE, which is also imported, is not within the scope of this price adjustment. It seems that the domestic production of BMW X5 makes Mercedes-Benz also have to give up three points, which also contradicts the impact of supply and demand on the BBA price adjustment.
However, consumers do not have to worry too much for the time being, on the one hand, the more models that adjust the price, the less sensitive the audience is to the price. Secondly, traditional car companies have unique advantages in terms of channels, especially head car companies such as BBA. Compared with new energy players such as new forces, once the price fluctuates, its impact will obviously affect the consumer terminal. The channels of traditional car companies can play a sponge effect and dilute the conduction of pressure. And it can also respond precisely and quickly to changes in the market.