Second-tier luxury has become the "cannon fodder" of new energy involution

Written by Wu Xue

Edited by Yu Jie

Produced by: Automobile Sankei

"NX can now reach more than 200,000, and last year it was more than 300,000, and this discount has never been done before. ”

In a Lexus 4S store in Beijing, a salesperson sells hard to customers who come to see the car.

It's just that such a discount margin doesn't seem to be attractive enough, and after some understanding, the customer finally chooses to "think again".

According to the data of compulsory traffic insurance, from January to November this year, the cumulative number of Lexus vehicles insured was 157513, a year-on-year decrease of 5.9%. And this is already the result after the preferential range was expanded to 40,000 or 50,000 yuan.

From the past to wait for cars at a higher price, and now the volume and profits are falling, Lexus's situation is not unique.

Previously, a Volvo salesperson told Auto Sankei that although the sales volume of his store this year did not fluctuate much compared with previous years, this was the result of increasing the discount margin.

Taking the best-selling XC60 as an example, the general discount range has now expanded from about 50,000 yuan last year to 9-100,000 yuan.

And Cadillac, which was the leader of the second-tier luxury brand last year, is not far behind. Before the launch of the all-new CT5 in December, the minimum price of the old CT5 was reduced to less than 200,000 yuan in order to clear inventory. Another kingpin model, XT5, has news that the highest discount can even reach 130,000 yuan.

"The offensive of independent high-end new energy brands is so strong that even BBA is a little overwhelmed and has begun to fight for price. If we don't reduce the price, we won't be able to sell it anymore. A dealer of a second-tier luxury brand said helplessly in an interview with the media.

In this year, when the independent new energy vehicle market is "rolling up to the sky", those second-tier luxury brands that have relied on the trend of consumption upgrading for several years have also begun to become cannon fodder in the market competition.

NO.1

[superseded ranking]

"(New energy vehicles) attack on fuel vehicles in the following order: the first step, the second line of independent brands, joint venture brands, luxury brands, the second step, the first line of joint venture brands, the third step, the first line of luxury brands. ”

In the first quarter of this year, Li Xiang, founder, chairman and CEO of Li Auto, wrote such a view on Weibo. Today, the market sales have proven his judgment.

According to the data of the Passenger Car Association, in November this year, the new energy retail penetration rate of the entire passenger car market exceeded 40%, reaching 40.4%. For every five new cars sold, 2 are new energy models, which is unprecedented in the past.

In terms of market segments, in November, the penetration rate of new energy among domestic brands was 62.1%, that of the luxury car market was 30.9%, and that of mainstream joint venture brands was only 6.6%.

However, the reason why the luxury market has a good proportion is not due to the accelerated transformation of traditional luxury brands, but the result of the squeezing in of high-end new energy brands, including Tesla.

From January to November this year, sales in the entire luxury market increased by 8.9% year-on-year. But if Tesla's pull is removed, the results of traditional luxury brands this year are generally not ideal, especially second-tier luxury.

If the sales volume of automobile brands with an average terminal price of more than 300,000 yuan are sorted out, it is not difficult to find that except for Land Rover, which has good sales this year because of last year's low base, the rest of the traditional second-tier luxury brands have declined year-on-year.

Cadillac, whose average selling price is already less than 300,000 yuan, is no exception. According to the data of the Passenger Association, from January to November this year, its terminal retail sales were 167,000 units, a year-on-year decrease of 2.4%.

The change in momentum is more evident in the sales rankings. In the ranking compiled by Li Auto, Tesla, Ideal, NIO, and Zeekr have occupied four places in the top 10 luxury brands.

Before this year, this was about a hard time imagining figures.

After all, at the end of 2022, in addition to Tesla, which can surpass a number of second-tier luxury brands, there is still a significant gap between Ideal and NIO and them, not to mention Zeekr and Denza, which have just been established not long ago.

NO.2

[snatched tag]

At the same time that independent high-end new energy brands are rising on the sales list, the brand label that second-tier luxury once was proud of is also being "snatched" away by them.

In the case of Lexus, premium service has long been considered one of the brand's biggest labels. In the words of Akio Toyoda, chairman of Toyota Motor Corporation, Lexus cars are sold "on their knees".

However, when a number of new car-making forces use more innovative service experience and even real money to attract users, the service experience known for its delicacy, such as the free warranty and maintenance policy and personalized delivery scenes, which Lexus once focused on, is obviously not enough.

Nowadays, when it comes to car brands that are known for their services, I am afraid that most people first think of new forces such as NIO, rather than traditional car companies.

The same is true for products.

"Now when we emphasize the safety of our products to customers, customers will say that XX new forces have richer configurations and look smarter and safer. A Volvo salesman once sighed helplessly.

Even Land Rover, which has the most unique product positioning, has more and more similar competitors with the rise of intelligent new energy. Look up to U8, Dongfeng Mengshi...... It already has a large number of fans before it is delivered.

In the middle of this year, Toyota's new Asia Dragon was launched with "leather steering wheel, leather seats, leather handlebar, electric adjustable front seats, and 6:4 reversible rear seats" as the "five killer features", which attracted a lot of complaints.

The lack of attractive publicity points is also the "distress" of most traditional car companies.

A salesperson who has joined the new force from a traditional luxury brand bluntly said that in traditional luxury brands, the way to attract customers is nothing more than emphasizing product safety, manufacturing technology and price concessions. After joining the new force, styling design, car machine, automatic driving, exclusive services, purchase tax exemption, price concessions, ...... There are a variety of attractive spots.

NO.3

[Tangled Transformation]

From the unlimited potential in the past to the decline in both volume and profit, the reason for the gradual decline in the market performance of second-tier luxury brands is nothing more than the lack of enthusiasm in the transformation of new energy.

Some people rank the speed of transformation of various brands:

It has become a consensus that foreign brands lag behind domestic brands. However, among all foreign brands, the transformation speed of second-tier luxury is lagging behind that of first-tier luxury and mainstream joint ventures.

It has to be said that most second-tier luxury brands are still in the early stages of the electrification transition:

From Lexus to Cadillac and Volvo, all of them have only launched new pure electric models in the past year, and although Lincoln, Jaguar, and Land Rover have all announced transformation plans, so far, no new pure electric models have been launched.

And this initial stage is not only reflected in the product, but also in the sales strategy.

"The biggest problem facing the transformation of many second-tier luxury brands is that they are small in size and lack of determination to transform," said an industry personnel analyst.

This entanglement is reflected in the market terminal, that is, in order to maintain the original fuel vehicle price system, the cost-effective configuration of new energy vehicles is a mess - "it is expensive to sell, and the product is useless", the above-mentioned industry insiders said bluntly.

Take, for example, the new electric RZ launched by Lexus at the beginning of the year.

Although it promised to insure 90% of the price within one year when it was launched, the starting price of the new car is as high as 369,900 yuan, but it only has a pure electric range of 520 kilometers. Coupled with the mediocre performance in terms of intelligence, even Lexus's own sales have bluntly said that their customers are mainly focused on fuel and hybrid products, and "few people specifically look at RZ".

Volvo's EM90 is in the same situation. It shares the same platform with ZEEKR 009, but the price is nearly 300,000 yuan higher. Although Yuan Xiaolin, President and CEO of Volvo Asia Pacific, has previously made a wonderful reply to the price issue:

"A guy who wants to eat at a Michelin-starred restaurant, and you tell him that there's a top-notch buffet with the same ingredients as Michelin, do you think he's likely to be convinced?"

But the scepticism in the market has not stopped.

Of course, among the second-tier luxury brands that have been questioned about the inflated prices of new energy, some people have begun to "think about it".

On November 17, the first day of the Guangzhou Auto Show, Cadillac IQ Ruige's new model, the rear-wheel drive standard range luxury version, was launched at a starting price of 297,700 yuan. Compared with the version that was more than 400,000 yuan on the market last year, the price has not dropped by a little bit.

Behind this is SAIC-GM's determination to transform.

In the words of Zhuang Jingxiong, general manager of SAIC-GM, "Our first step is to open up the market, or to further increase our market share." This is the top priority. Of course, in the follow-up, we still have to find a way to make a little profit. Now, definitely not. ”

In fact, before the launch of the lower-priced version, in July, the Cadillac IQ Ruige had an official price cut of 60,000. After that official downturn, the sales of this model also increased significantly for a time.

NO.4

[Written at the end]

As 2023 draws to a close, a new wave of price cuts has begun in the recent automotive circle.

Even different from the wave of "table-lifting" price reductions at the beginning of the year, this time it is not only the inferior brands that have picked up the weapon of price war. New energy brands such as Wenjie, Ideal, NIO and even BYD, as well as traditional first-line luxury brands such as BMW, have also given significant discounts, taking advantage of the Spring Festival to clear inventory and harvest another wave of sales.

Such a situation is undoubtedly another round of impact for the second-tier luxury brands that are already under pressure.

As for next year, as the proportion of new energy sales exceeds the 40% mark, to quote the oft-mentioned point:

Perhaps 2023 is already the best year yet.