Huawei lowered prices, and the wave of price reductions will not end at the end of 2023, but will begin to accelerate

"In order to grab customers and sell more cars, at the end of this year, many brands are in a state of death. "Even if the license is restricted and the purchase is restricted, all the auto trade parks/supermarket gathering areas in Beijing are in the same state in December this year.

At the end of 2023, China's auto market suddenly entered a state of one price per day. As a result, many sales consultants will promise the owner to "insure the price" in order to win the order. As a result, the overly chaotic terminal car price makes people ignore that the price reduction tide throughout the year has not ended, but has entered a new climax.

It's not that everyone has a way to live, it's the extreme Matthew effect. The strong get stronger, and the weak get weaker.

Since the end of November, BYD began to cut prices, and on December 1, BYD suddenly announced the policy of price reduction on Dynasty Network, with a maximum of 20,000 yuan of fuel transfer funds, which directly exploded a series of 4S store promotion policies of 10-200,000 yuan of competing products of the same level.

Aion, Nezha, Leap, etc., are the fastest to keep up with BYD on the bright side. Aion gave his best-selling two cars, AION Y and AION S Max, a policy of up to 100,000 yuan and 0 interest for 3 years, and the upper limit of the discount was 9,500 yuan/8,000 yuan respectively. Leap gave 5,000 yuan to users who were ordered and delivered in December, with a cash discount of up to 17,000 yuan.

The discount on the surface is not small, but the secret death hand is a further operation of the 4S store. Because in addition to the official price reduction news on the Internet, each brand also has its own store discount in the terminal, and the store discount is basically the logic that BYD dares to drop 5,000, and similar brands dare to drop 8,000.

As a result, car prices, which have been chaotic for a year, will finally form another situation in the eyes of consumers at the end of 2023, "because of too frequent price fluctuations, I am too lazy to make too in-depth comparisons, and the discounts of big brands are also in place." Therefore, impulse spending is the main line today, and in 2024, it is foreseeable that such a main line will disappear for a short time and then reappear.

If you don't reduce the price, you will even lose your chance of survival

"Unless the manufacturer says that the 4S store will be fined if it gives a discount, almost no one dares not to reduce the price, even if you are Tesla, you can't be capricious." This is the reason why Lynk & Co 08 has become one of the few models in the industry that has "withstood it" when chatting with several Lynk & Co 4S stores across the country, and has confidence in its own price formulation, confidence in product strength, and the orders in hand meet expectations, and can not backstab old car owners, etc., the price of Lynk & Co 08 is ironclad, and even the opportunity to apply for a free maintenance is not given. Fortunately, the sales performance is also stable, from the 11th National Day holiday to the first week of December, Lynk & Co 08 can deliver a weekly sales of about 2,000 units, monthly sales of nearly 10,000 units, in the current market, is a clear stream.

However, more car companies are competing for every inch compared to Lynk & Co's indisputable state. Whether it is a new car, or a model that has been on the market for a period of time and has market competitiveness, they are all in a "chaotic" posture in this new situation at the end of the year.

Although the weekly sales volume of AITO M7 exceeded that of the ideal L7 for the first time in early December, the stores gave a cash discount of 10,000 yuan. And its direct rival for users, the ideal L7, has also directly increased the price reduction of the bright side to 12,000-18,000 yuan. As the best-selling models in the segment, once they are reduced, all models in this price range, but if they want to quickly win the share at the end of 2023, they will have to follow suit.

In the market of 10-200,000 yuan, BYD has dropped it, and other brands have basically followed it at the same frequency. The Galaxy L6, which has not been on the market for a long time, has dropped to nearly 15,000 yuan, AION S has broken 20,000 yuan, and it has also been listed in late October, and the starting price is less than 90,000 yuan, and the Kaiyuan A05 has also dropped by up to 5,000 yuan. The most severe fuel family cars hit by new energy, the big joint venture brands have not minded shouting out promotions online, and the time-limited discounts in December are SAIC Volkswagen's highest comprehensive discount of 58,000 yuan, FAW-Volkswagen's highest expansion red envelope of 12,000 yuan, Chevrolet's highest 60,000 yuan, and FAW Toyota, which subsidizes 5,000 yuan of purchase tax.

As a result, the most popular 10-150,000 yuan joint venture family cars, Lavida and Sylphy, do not dare to give a discount of less than 30,000 yuan.

In the market of more than 200,000 yuan, there are brands with big fame and big voice, Tesla, Wei Xiaoli, and Huawei's empowerment of the two worlds, as well as Baidu + Geely's Jiyue, everyone is doing the same thing, down.

Although Tesla has not adjusted the price on the surface, the in-store subsidy is 8000 yuan;Xiaopeng directly reduced the highest comprehensive official of P7i by 26,000,000,000,This figure includes a subsidy of 10,000 yuan or installment interest and integral audio; AITO Wenjie and Ideal continue to change prices in the fight against each other。 AVATR also released an official promotion of up to 52,000 yuan in December on Double 12, and even if you make a little choice, you can get a direct discount of about 30,000 yuan. And, one month after listing, Jiyue chose to reduce 30,000 yuan to the equity.

The conclusion is that in the 10-200,000 yuan of the leading car companies, the new energy vehicles have basically increased the discount of 10,000 yuan, and the fuel vehicles have increased by 1-15,000 yuan; in the 20-400,000 yuan market, most car companies have at least paid 30,000 yuan to fight the price war.

Moreover, this does not include the low pricing of "selling cars and losing money", such as Xpeng G6, facelifted Xpeng G9, AITO M7, Jiyue 01 and so on.

For example, the weekly sales of AION Y/Yuan PLUS/Song PLUS DM-i have soared to 6,000 units/week after the promotion, and the car companies that have followed the decline are within 2,000 units, and the weekly sales of Seagull are more than 8,000 units, while the Fit is less than 1,000 units. If you fall behind, you may fall directly out of most people's consumption list.

New forces are grabbing orders, cities are grabbing orders, and battery factories are also grabbing

"The tide of price reductions has not stopped, but the tide of price reductions is accelerating", this is the point of view of Li Ying of Xiaopeng's Beijing terminal store, from the 11th National Day to the present, he has at least 20 groups of users every day, and he can rarely make consumers decide to place orders through price reductions, unless the other party is a young man who is financially independent and has been watching the car for a long time, he will try to put the discount in place.

Most people who go to choose new energy vehicles now know that everyone is reducing prices, if the price does not meet their psychological expectations, but "wait for the party to win".

In addition, the new forces have also jumped out of the traditional car companies' gameplay and continued to create another way.

That is, to grab orders first, to ensure that you have the ability to face the possibility of changes in the market in the next few months. Most traditional car companies can only be trapped in the old siege, the production capacity plan has been calculated, the sales volume to be sold in a single quarter/month is roughly calculated, and the wholesale sales volume of the passenger association every month is impressive. As a result, the topic of inventory continues to hover over the head. In the fixed link of production-transportation-storage-sales-after-sales, if there is a problem at every key node, there may be problems in the whole system.

Of course, this year, the major brands that focus on traditional businesses have already released the wind to reduce the burden on their channels. In July, Volkswagen lowered its global delivery forecast for the Chinese market, and Nissan lowered its forecast for sales in China by 23% and its global sales forecast by 300,000 units during the same period. In January this year, Great Wall Motor lowered its sales target to 1.6 million units.

Most of the traditional car companies are busy hitting the sales target, digesting production capacity, and solving inventory;

And the new forces order first and then deliver, so that they have more flexible buffer space. Therefore, if you grab the order first, you will get a clearer future first.

The practices of several leading new forces have further transcended traditional car companies at the marketing level, including but not limited to, the sales consultant/live broadcast car sales team has recently been in the limelight "flight attendants jump ship to sell cars", and the companies involved in this news are Ideal and Weilai;

In some stores of several leading new forces, they can even reimburse each other's large deposit payments, and the number of companies involved in this news is increasing.

Of course, behind this is not only the individual behavior of car companies, but also more superimposed factors. For example, in addition to the high incentive policy for selling cars under heavy rewards, there are more and more severe punishment mechanisms. Some manufacturers will give stores that have not completed wholesale/sales a mechanism to directly "graduate" and cancel the authorization of dealers.

At the same time, the subsidy war between cities is also continuing, such as Wuhan in December to issue 10 million yuan of car consumption vouchers, at the end of November Suzhou announced a maximum of 6,000 yuan of red envelope subsidies for bicycles, Nanjing is 4,000-5,000 yuan, and including Shenzhen, Changsha, Jinan and other places, also in the near future continue to introduce policies.

In addition, the power battery, the most critical component of new energy vehicles, is now competing for the future in 2024.

CATL, which was also dubbed "King Ning" at the beginning of this year, had limited market stimulation when it released new technologies at the end of this year. Despite the release of the skateboard chassis, the stock fell 0.9% on the day, and the capital market was somewhat "unimpressed" by the release of new technologies and even the move to build cars in cooperation with car companies after seeing the "lithium mine rebate" at the beginning of this year and the decline in the market share of CATL.

The financial report for the third quarter showed that revenue increased by 8.28% year-on-year, net profit increased by 10.66% year-on-year, and CATL suffered its first profit growth decline after listing. In addition, after entering 2023, the market share fell to less than 50%, and in September this year, it fell to less than 40%, or 39.41%. As for the reason, it is the rise of BYD, as well as the growth of the share of more second-tier power battery manufacturers, and China Innovation Airlines, which ranked third in October, now has a market share of nearly 10%, at 9.67%.

Behind the weaker and weaker voice of the head battery companies, more and more car companies have begun to develop their own batteries, more and more car companies choose other brands because of price and other reasons, and today's lithium prices have plummeted, and a 60-degree battery can save about 18,000 yuan. These have given the price war the confidence to continue to advance.

The tide of price reductions is going in a direction that cannot be stopped

The fight will come uncontrollably, because whether this battle is over or not, a few leading car companies alone have no right to speak. In July this year, under the organization of the China Association of Automobile Manufacturers, 16 car companies signed the "Commitment to Maintain Fair Competition Market Order in the Automobile Industry", and the key message of the clause is fair competition and no price war.

However, just one day later, this commitment was directly invalidated, and the clause "not to disrupt the market with unreasonable price reductions" was deleted, and car companies should "set their own prices" according to the market. Immediately after Tesla, Tesla cut the price by 3,500 yuan in disguise, and a new round of car price reductions began.

On the one hand, the terms are suspected of price monopoly, and on the other hand, the snatching of sales must be both high and low, life and death, those who are in the rush want to take more, those who are temporarily backward want to fight back, and those who are relatively backward want to survive.

BYD, Tesla, Wei Xiaoli, etc. are the first runners, and the temporarily backward and want to fight back are the previous fuel vehicles as the main business of a number of car companies, especially German car companies. According to the information that has been obtained, Volkswagen is likely to seek to regain lost sales in 2024, including but not limited to, 1. In China, more configurations that meet local needs and in-depth cost control, such as the new ID.3 will be launched soon, will be replaced with lithium iron phosphate batteries, and cost allocation will be carried out according to continuous scale, and it is expected to achieve cost equalization in the second half of 2024;2. It will use more local Chinese technology to achieve technological progress and the most critical price reduction, such as the technical cooperation between Volkswagen Group and SAIC, such as the purchase of the Leap technology platform, and for example, FAW-Volkswagen was not long ago revealed to consider launching its third brand specializing in PHEV plug-in hybrids.

Of course, the old rivals of German cars are also the same strategy, the new plan for new energy vehicles in China has long been clear, Toyota will cooperate with BYD and GAC Group in depth, Nissan's new Chinese cars will be led by the Chinese side, and Honda's current plan is to localize the cost reduction and deep cultivation of PHEVs.

However, this level alone is not enough to significantly accelerate the price war.

What's more, it's the capital market behind it. According to the latest reports from foreign media, IDG Capital is approaching Chery Holdings to raise funds to acquire shares of up to 7 billion yuan. Although Chery is still in the consideration stage, once it nods in agreement, everything will be clear about the subsequent developments. Chery Automobile, which focuses on fuel business, hit A-shares, and Chery New Energy hit the Science and Technology Innovation Board or Nasdaq, with a valuation of up to 150 billion yuan, which will allow Chery to have a lot of funds in its hands to face price wars, downgrades or a new round of changes in consumer demand or technology.

However, after being bound by the capital market, while getting funds, it is also necessary to achieve the high goal of continued development, achieve financial reporting, and achieve stock price rise. Tesla is a typical case, when the stock price declines significantly, it will always quickly offer price adjustments or equity adjustments to pull the stock price back.

In the current global economic stage, capital is more important than technology and higher than the market. Full pockets are good for winter, and China's leading car companies and Tesla are also in the same way.

NIO's layoffs, NIO's organizational optimization, including Li Bin's consideration of adjusting the short-term rhythm of self-developed and self-produced batteries (speech at a recent summit), are all the same. At present, the company closed cash reserves of 45.2 billion yuan in the third quarter, an increase of 13.7 billion yuan from the second quarter. At the same time, with the recent continuous expansion of the exchange point ecosystem, including overseas investment (such as Abu Dhabi CYVN investment institutions) and domestic investment, it will further increase.

The logic behind the ideal high sales volume is the same, with cash reserves reaching 88.52 billion yuan at the end of the third quarter;

Xpeng Motors, at the end of the third quarter, further increased its cash reserves to 36.5 billion yuan.

The more fierce the market, the more money is needed to smash technology and improve competitiveness. The more aggressive the sales volume, the more price adjustments are needed to deal with the marketing. Moreover, the harder it is to make money, the greater the pressure on the performance and prospects of car companies in the capital market.

The kind of cycle in which the three are interrelated, which link is broken, car companies may lose a "life", so the price war and price reduction tide cannot end in 2024.