All those interested in buying a car please wait a little longer. All those who wish to sell their vehicles should act as soon as possible, as the tide of vehicle price cuts has swept in, covering more than 30 models with prices ranging from 50,000 to 300,000. The question is, will car prices continue to fall? It will definitely fall, why fall? Who is driving this trend? What is their purpose? First of all, I want to be clear that this is not a price war, but a complete industrial knockout competition.
Because China's passenger car market is mature, we can independently develop fuel vehicles and new energy vehicles, and there is competition from foreign automakers and joint ventures. But at present, the number of car brands is as high as more than 100, which is very unscientific. According to the historical experience of the market and the development of the automobile industry in Germany, the United States and Japan, as well as the characteristics of the Chinese market, more than half of the automobile brands are destined to be eliminated in the next three years at most and five years at the latest. This is very similar to the online store knockout competition, and in the end, only Taobao, Jingdong Pinduoduo and some niche brands remain.
This is a manifestation of the high concentration of the industrial market structure, so in three to five years, car brands are destined to experience a knockout race, and as a result, as brands such as Honda and General Motors have experienced in the past few decades, more than half of the car brands in China will disappear. And the initiator of this war is Tesla, and even China took the initiative to invite him to enter the Chinese market and start this war. Tesla only played one tactic, which was to go high and go low.
They use this tactic to seize the market. As long as I can reduce the price at any time, I can sell more cars, and if you can't sell it, you will be dragged down by cash flow. So the Tesla 3 in 2019 sold to 4.67 million, and now it has dropped to 230,000, which is really halved. BYD, on the other hand, has dragged down a larger market share with its own quality and brand. The two of them worked very well together.
At the critical moment of August 14, Tesla accelerated this price reduction war, and all models dropped by 20,000. Tesla announced that the reason for the price reduction was to give profits to passengers according to the cost, but the fundamental reason was to seize market share. In contrast, China's new energy vehicle companies are still struggling to support, and some of them are not far from death.
What is even more ridiculous is that some large companies take the lead in not reducing the cost of the industry, but let small enterprises mistakenly think that they will not reduce prices, and as a result, Tesla seized the market. This behavior is like a new energy knockout race, not only eliminating fuel vehicles, but also eliminating those uncompetitive new energy vehicle companies.
New energy vehicles sold 5.66 million units last year and are expected to exceed 8.5 million this year. By comparison, 24 million passenger cars were sold last year, compared to an estimated 21 million this year. Therefore, the proportion of new energy in the total number of passenger cars increased from 24% to 40%, seizing 16% of the market share, which also led to a rapid price reduction of automobiles, and consumers got more benefits.
If you want to buy fuel vehicles, you can wait, especially mid-range brands, the once high premium has been regarded as a fool by consumers, and the price reduction space is very large, especially several brands, I will not name them, they are not not profitable, but deliberately make you think that they do not make money. This shows that the importance of management cannot only look at the surface Tesla's direct sales model, it is clear that their model is to break the middleman to earn the difference.
The price of selling a car in China depends on a variety of factors, including market demand, competitive conditions, costs and profits. The first car sold in China in 2014 was priced at 734,000 yuan, the car consists of four parts, and thoroughly explains the price of the car sold in the United States, where the price of the car is 81,000 US dollars, plus the price of 3,600 US dollars shipped to China, which is equivalent to 515,200 yuan, and 3,600 US dollars is equivalent to 20,000 freight duties and taxes.
He was talking about $19,000, which is equivalent to about 100,000 yuan, 17,700 yuan in value-added tax, which is equivalent to about 110,000; 10,000 plus 110,000 plus 20,000 plus 520,000 equals 750,000.
He said this is to compare and belittle the so-called fuel vehicle companies of many big brands in China. Because it is unfair for fuel vehicle companies to treat consumers in China and foreign consumers. He said that according to the practice of cars in China, the price in China should be more than double that of the United States, 1.5 million. North American BMW is 5430,000 domestic 700,000 more expensive than 200,000, Mercedes-Benz foreign 510,000 domestic 800,000 expensive 300,000.
Don't tell me about tariffs, how does Toyota Alpha explain? The price in Japan is more than 300,000 to 400,000 yuan, and the domestic price is 1 million. How much are the tariffs? Aren't tariffs hundreds of thousands? You have to add a price increase of 200,000 to buy it, and the Mercedes-Benz in North America is big, and it is more than 800,000 yuan in North America. About 581,800 (USD 95,000), about 565,500 (USD 92,350), and about 857,300 (USD 140,000). From 1.8 million in China, pick up the car plus 300,000 and now change it to 2.0 for you. Therefore, China's new energy development is very bullish, which determines the speed of fuel vehicles in the future, and the rapid price reduction returns to rationality. How fast will it be? Super fast 2017 look at this number and you will understand. In 2017, a total of 28.879 million passenger cars were sold nationwide, but new energy vehicles sold only 777,000 units at that time, accounting for only 2.6%.
In 2020, the sales volume will be 386020, the total sales of passenger cars will be 29.86 million units, and the new energy will be 5.88 million units, with a market share of 25.6%, a tenfold increase in five years, and even if it only increases by four times in five years, it is equivalent to the complete elimination of fuel vehicles. So I said that more than 100 passenger car brands, including fuel vehicles and new energy at least 50 are ready to leave the market, if you do not leave the market, you will be eliminated, you will not be able to keep up if you do not hurry up to reduce prices. This is the logic of car companies to reduce prices now, competitive car companies eliminate competitors by cutting prices, while low competitive car companies need to recognize the reality, accelerate destocking and maintain cash.
For example, the new force of car manufacturing, namely Ke001, took the lead in reducing prices on August 11, dropping the price from 37,000 to 269,000, and announced that this price will be maintained until the end of the year earlier than Tesla, don't you reduce the price? Is it really waiting for cash flow to dry up and be eliminated? In the next few months, there will be more brands and 30 models to follow up and reduce prices, so you can buy that 6 in Hubei and buy Tesla now, in fact, it is the base of the library, and future models may be discontinued one after another.
Do you see that Kaiyue sold the hottest before? Mazda six stopped, Crown Jetta stopped, now to see who runs fast? Why? The Kirin battery of the Ningde era is fast charged for 15 minutes and has a range of 1,000 kilometers, and the fuel anxiety of large-scale quantitative production has been completely solved, and then the new energy is a horse Pingchuan. Remember not to distrust Nokia, and never believe that you will be eliminated by Apple.
Brother who buys a car, you may wish to look at the gold nine silver ten, will the competition of car companies intensify more? If you don't believe it, wait and see, because there will be successive consumer subsidies from various provinces and cities, especially the subsidies for buying cars will spread throughout the country, especially the subsidies for buying cars will spread throughout the country.