Where did Wei Xiaoli's price war go?
Written by/ Zhang Linyu
Editor/Zhang Nan
Design / Zhao Haoran
August has three days with an "8", one on August 8, the second on August 18, and finally August 28. For the release time of the 2023 half-year earnings meeting, ideal chose the first day, Xiaopeng chose the second, NIO did not choose August 28, and they put the earnings meeting on August 29.
From the comprehensive financial data of the three companies, ideal ranked first, and NIO and Xpeng were in the red because their sales did not meet expectations.
In the first half of 2023, a total of 139,000 new vehicles will be delivered, with NIO 55,000 units and Xpeng 41,000 units. The sales revenue of Wei Xiaoli was 19.448 billion yuan, 9.096 billion yuan and 47.44 billion yuan respectively, of which the automobile sales revenue was 16.41 billion yuan, 7.938 billion yuan and 46.299 billion yuan respectively.
In terms of sales costs, NIO was 19.199 billion yuan, Xpeng was 9.226 billion yuan, and ideal was 37.374 billion yuan, which also caused the gross profit of the three companies to look quite different, NIO had a slight surplus of 249 million yuan, Xpeng was negative, with a loss of 130 million yuan, and the ideal gross profit achieved 10.065 billion yuan.
It is worth noting that the R&D expenses of the three companies are in first place, with NIO ranking first with 6.42 billion yuan, followed by Ideal with 4.278 billion yuan, and Xiaopeng at 2.662 billion yuan. If you calculate the proportion of sales revenue, NIO R&D accounts for the highest proportion of 33%, Xpeng is second with 29%, and ideal ranks last with 9%.
In terms of sales and management costs, NIO spent a total of 5.303 billion yuan in the first half of 2023, and Xpeng spent 2.930 billion yuan, which was 3.955 billion yuan. If you count the proportion, Xiaopeng is the highest, accounting for 32%, NIO is 27%, and the ideal is the lowest, at 8.3%. This seems to be Li Xiang's confidence in complaining about the high marketing expenses of friendly businessmen on Weibo.
The ideal guidance for the third quarter is 100,000-103,000 units, NIO's is 55,000-57,000 units, and Xpeng's is 39,000-41,000 units.
In the next 4 months, three companies still have new product launches. Ideal will launch the first pure electric MPV, Xpeng will also release its own MPV for the first time, and NIO will release a mobile phone in late September. NIO's second brand, the first car of Alps under 300,000 yuan, will not be released until the second half of next year.
Li Bin emphasized in the earnings report that they do not build mobile phones to seize share in the mobile phone market, but to provide users with use from the perspective of user experience.
From the financial data, the pattern of the three companies this year has been basically finalized.
Judging from the recent spread of ideals, their focus is on intelligent driving, and the goal is to strive to advance their intelligence level to the front camp; NIO's focus is to sink channels and lay out more outlets, while also looking forward to Alps bringing explosive products; For Xiaopeng, cost reduction may be their first task. In addition, with the blessing of Volkswagen, as well as the recent cooperation with Didi, channel construction and the launch of MONA are also focused.
2024 may be a year of rapid development but also a test of whether strategic decisions are correct.
Where did the price war of the three companies go?
This year, the growth of the entire auto market has been sluggish, and in order to gain enough market share, brands can only grab the share of other brands, which has set off a price war. In addition, the growth part of the new energy vehicle market is actually the part of the decrease in the sales of fuel vehicles, which is not the so-called new incremental market. Therefore, new energy brands have also joined the price war.
In this sense, no brand can play an outsider in the price war to maintain a clear high.
Price wars in the automobile market have been common in the era of non-direct and opaque traditional cars. But to sum up, the statement is nothing more than local licensing subsidies, insurance subsidies, various incentives, replacement subsidies, installment interest-free, maintenance allowances, decoration gifts, points gifts, lotteries and various physical gifts, such as JD cards, electrical appliances and so on.
When it comes to new forces, it is basically these kinds of gameplay.
Since the launch of the new car, the ideal ONE has reduced its price once, which began on September 1, 2022. Also in the third quarter of this year, in mid-to-late August, there was news of the ideal price reduction, but the ideal official did not agree that it was a price reduction.
Auto Business Review consulted Li Auto's customer service about this, and the other party explained that the August discount mainly came from regional government subsidies, because Li Li is a directly operated store and can issue invoices in the subsidy area, so consumers can enjoy government subsidies in the region even if they are not in the subsidized area. This subsidy ranges from 8,000 yuan to 10,000 yuan.
At the same time, news of the ideal price reduction in disguise spread on the Internet. Ideal seems to mind such comments, public relations said in the official reply: "Previously, there were rumors on the Internet that we subsidized and officially policies, with a total of more than 20,000 discounts, which is false information, local subsidies and retail promotion policies are subject to regional restrictions, and this is not what some online reports say that they can't bear the pressure to reduce prices." ”
When the Auto Business Review reporter visited the ideal direct sales store in Beijing at the end of August and asked if there was a discount in the store, the ideal salesperson immediately corrected the reporter, saying: "We are not a discount, it is a subsidy given by the government." ”
According to the Auto Business Review reporter, starting from a certain day in August, the discount of the ideal Beijing direct store is mainly 13,000 yuan, including 5,000 yuan of Beijing brand car subsidies and 8,000 yuan of Shenzhen regional subsidies. If it is replaced, there is a subsidy of 8,000 yuan to 10,000 yuan.
But this offer just ended on August 29. Ideal released the latest subsidy policy: from August 30 to September 30, if any model of the new order of all models of Ideal is purchased, if car insurance is purchased through a cooperative insurance institution, Ideal will provide an insurance subsidy of 10,000 yuan. In case of replacement, 8,000 points are provided. In addition, the ideal store also gives gifts such as tents.
NIO's first official reduction this year was on June 12, with the whole system reduced by 30,000 yuan, canceling the free power exchange rights of new users, and at the same time providing 30,000-50,000 yuan of monetization opportunities for old users' free power exchange rights. In order to increase the transparency of information and reassure existing car owners, Li Bin and Qin Lihong did not organize media communication meetings, they left time for users, and held offline user communication meetings that afternoon.
After this price reduction, Auto Business Review learned from the terminal that the main benefits in NIO's Beijing area are free battery coupons and film vouchers. Displacement provides 30,000 points. NIO currently has a unified pricing and preferential treatment across the country, and the price of each directly operated store will vary slightly depending on the subsidy of the local government.
Since the launch of the G6, Xpeng has had Internet celebrity products, and the discount for this car is relatively small. In Beijing, according to the Auto Business Review, G6 can enjoy an optional fund of 5,000 yuan, if replaced, there is a subsidy of 11,000 yuan, and if it is a new license user, it will be discounted by 3,000 yuan. For models other than G6, the replacement subsidy is up to 18,000 yuan, and users of new licenses can receive a subsidy of 5,000 yuan.
The principle is that cars that are not easy to sell are the most subsidized.
For the new forces, the impact of Tesla's rights protection incident after the price reduction and the harm to the brand of the price reduction are their biggest concerns. Therefore, each family is more cautious in the interpretation of each price reduction.
Ideal last year or this year chose the third quarter to give profits to users, I don't know if it's a coincidence? However, the current situation of China's auto market this year, in the next 4 months, the price war of various brands will not only continue, or will have greater strength.
Power channel
Li Bin mentioned at the half-year earnings conference that NIO will sink its channels, and the sales network has begun to adjust from July and will be completed at the end of September. They will build a terminal network with a monthly sales of 30,000 vehicles. Starting in October, NIO's channel will promote sales according to the new layout.
"Compared with BBA's terminal stores, we found that we have fewer stores in third- and fourth-tier cities, and we have fewer sales staff in each store. So, in the past few months, we are increasing the sales staff and training the sales staff. Li Bin said at the earnings conference.
Market sinking, improving sales efficiency, and increasing conversion rates are NIO's near-term goals. This channel adjustment also seems to be a major move by NIO in recent years.
In August, it was reported that NIO's sales staff earned 100,000 yuan a month, which may be the result of this channel adjustment. According to media reports, the number of employees in NIO stores has basically doubled in the past two months. Some stores used to have 12 salespeople, but now the number has increased to 24. NIO's salaries to salespeople are "industry ceilings" compared with their peers.
According to the report, although NIO's basic salary is not the highest, it has a high commission and belongs to a "brand with more money and more money".
NIO insists on direct management, even in the face of the sinking market, it still chooses direct management.
Auto Business Review reporters recently investigated the price situation of NIO's directly-operated stores in different cities and found that NIO has introduced a new system to avoid internal competition, which has not appeared in previous surveys.
In the process of inquiry, NIO sales in other cities told reporters: "NIO is a direct store, the national uniform price, no matter where you buy, you are buying a car from NIO." There are already our colleagues at your service before, sorry I can't serve you anymore. "This directly circumvents internal competition, which is difficult to enforce in other brands, especially traditional dealer stores."
At present, NIO has a total of 420 offline stores.
Xpeng's channel may have been reformed in March this year, and the structure was basically completed in April. Xiaopeng is the only one in Wei Xiaoli that has both a direct store and an agency. After the reform, Xpeng's business policy for directly operated stores and agency stores is completely consistent, and the assessment requirements are also consistent. The price war between Xiaopeng stores and stores before also stopped.
"If the agent is found to be privately giving users JD cards or other offers, it will immediately close the store." A salesperson at Xpeng told Auto Business Review.
Xpeng's flagship store in Sanlitun, Beijing, has moved to Houshayu, Shunyi, and has integrated display, delivery and repair functions, but the current traffic of the store does not seem to be ideal, especially on weekends and holidays.
Xpeng salespeople said that they can compete for the same user at the same time, but because the commission of the new car is not high, about a few hundred yuan, they generally do not particularly grab customers. Their salary assessment is mainly for the service to customers, and the commission is part of it, not the main part.
Xpeng's goal of the channel this year is also to sink the market, but they are building stores by working with distributors. After Xpeng acquires Didi's MONA platform, it will launch new brands and new models in 2024, and the channel layout of this brand has not yet been announced by Xpeng.
As for Ideal, it has the lowest number of offline directly-operated stores, with only 337 retail centers. Monthly sales of 40,000 means that each store has a monthly sales volume of more than 100 vehicles, which is Li Xiang's KPI for directly operated stores that have been operating for more than half a year.
During the Chengdu Auto Show, Liu Jie, vice president of commercial of Li Auto, mentioned that Li Li had delegated the management power to each store. He said: "The ideal is a direct management system, which was previously a form of 'central planning management', where stores cannot do anything, no matter what activities they do, what gifts they give to users, or what short-term sales promotion activities they use, they have to listen to the unified allocation of the central government." Since the first quarter of this year, we have carried out the adjustment of local decentralization. Each provincial team and each city team of Li Auto can formulate plans according to local market conditions, including customer acquisition plans, activity plans, or store promotion plans combined with various activities. ”
The specific scope of autonomy of each store's management authority is the auto business review consulted the ideal related staff, and has not received a reply before the deadline.
From the initial fight for safety to technology, and then to fight for price, now Wei Xiaoli has begun to fight channels again.