Who will bring surprises to the 2024 auto market?
In the 2024 car market, who is recognized as the strongest and most challenging opponent. The answer is obvious - BYD.
Once upon a time, BYD was just a follower. With the development and growth of China's new energy vehicle market, BYD seized the opportunity to take advantage of the trend.
In the era of fuel vehicles, BYD's annual sales have never entered the million club. In the new energy era, after a decisive and complete ban on the sale of fuel vehicles, BYD's annual sales doubled from 700,000 to 1.86 million in just one year. In 2023, BYD's sales will jump to 3 million units again, and its net profit is expected to exceed 30 billion yuan.
Not only that, from 2022 to 2023, BYD will beat Tesla to rank first in global new energy vehicle sales. Obviously, BYD's new energy production and sales scale has entered a new stage, and no one can match it in a short period of time.
"How to beat BYD?" should have become a question that every competitor will think about.
So, in 2024, will BYD's rapid growth trend be sustainable, will its market position remain solid, and what opponents will it face?
In 2024, where will BYD's increment come from?
If an auto company wants to maintain a steady growth in sales, it must not only have Ivy League products to stabilize its base, but also continue to promote new products to create new increments. Analysts at the Gasgoo Automotive Research Institute believe that the core increase in BYD's sales this year mainly comes from the rapid growth of the Formula Leopard brand, the two series of new models of Dynasty and Ocean, as well as the export market.
Image source: BYD
As we all know, the two major series of Dynasty and Ocean are the absolute pillars of BYD's sales. In 2023, the Ocean series will start a strong offensive, launching a number of new cars such as Dolphin and Seagull, lowering the price of BYD's pure electric vehicles to less than 80,000 yuan, and reconstructing the 100,000-yuan market, further squeezing the share of joint venture fuel vehicles at the same price with brands such as SAIC-GM-Wuling.
Looking at the Dynasty series again, the product has been upgraded to the Champion Edition, which is actually a disguised price reduction mode (based on the cost scale advantage, making the product cheaper and cheaper). For example, the Qin PLUS DM-i Champion Edition, which was launched at the beginning of last year, has dropped its price to 100,000 yuan. This is a signal for BYD to declare war on the mass market of 100,000-200,000 yuan.
Judging by the sales results, the strategy of the Dynasty and Ocean series is undoubtedly successful. In 2023, the total sales of the two series will reach 2,877,400 units, a year-on-year increase of 55.3%.
Image source: BYD
Among them, the monthly sales of hot-selling models such as Seagull, Qin PLUS, and Yuan exceeded 30,000 units or even higher, and many models such as Dolphin, Han, Tang, and Song remained stable at more than 10,000 units. Obviously, compared with other car companies, BYD has more than a dozen "explosive" models to stabilize its base. In terms of increment, analysts from the Gasgoo Automotive Research Institute said that new models such as Song L and Hiace will become the main force for the sales growth of the two series this year.
The new brand Formula Leopard, which was released in August last year, is also expected to usher in rapid growth this year. Equation Leopard is the fourth brand launched by BYD, positioning itself in the professional field of personalization. In November of the same year, the first model, the Leopard 5, was launched, with a price of 289,800-352,800 yuan, and deliveries have begun.
With a reasonable price, strong brand endorsement, and the growth of user demand for off-road vehicles, the sales volume of the Formula Leopard Leopard 5 exceeded 5,000 units in the first full month, and the first battle was successful, and it is predicted that sales are expected to go further this year.
In addition, the export market will also become another force for BYD's sales growth. 2023 is the year of the explosion of BYD's globalization. Wang Chuanfu, chairman of BYD, once said, "The focus in 2023 is globalization, and BYD has promoted its globalization strategy through two paths: export and localized production." ”
In just over two years, BYD's passenger car business has entered nearly 60 countries and regions including Japan, Germany, Australia, Brazil, and the United Arab Emirates.
With strong product strength and high popularity (since surpassing FAW-Volkswagen in sales in 2022 and winning the global new energy vehicle sales championship, BYD's popularity in overseas markets has been increasing), BYD's sales in overseas markets have grown rapidly, reaching 240,000 units in 2023, a year-on-year increase of 3.3 times, and ranking among the top new energy vehicle sales in many countries and regions.
Image source: BYD
This year, BYD continues to accelerate the pace of exploring overseas markets. BYD's Thailand plant will soon be operational and put into operation, and construction will begin on a Hungarian plant in Europe and a Brazilian plant in South America. It can be seen that BYD is gradually shifting from trade and export to localized production. With the completion and production of overseas factories, BYD will further reduce costs and enhance the competitiveness of its products in the local market.
Analysts at Gasgoo Automotive Research Institute predict that BYD's overseas market sales are expected to exceed 500,000 this year, doubling from last year.
Will growth slow down this year?
Based on the overall sales growth rate of new energy and BYD's own development scale, BYD can complete the sales target of 3 million units last year, which is expected by the industry. At present, BYD has not announced its sales target for 2024. However, based on BYD's current sales fundamentals and growth rate, many institutions have predicted its sales and performance in 2024.
According to various sources, the industry generally believes that BYD's sales will continue to grow in 2024, but there is no consensus on the size of the increment.
Shengang Securities is more optimistic, predicting that with the increase in the penetration rate of new energy vehicles, the rapid release of production capacity, and the launch of new cars such as Dolphin DM-i, Song L, Denza N7/N8, Yangwang U8/U9, and Leopard 5 on the market, BYD will continue to be in a cycle of new product launch, and its sales volume in 2024 is expected to exceed 4 million, an increase of more than 30% over the same period last year.
Image source: Look up to the brand
The Gasgoo Automotive Research Institute is more cautious, and it is expected that the sales volume in 2024 will be about 3.4 million ~ 3.5 million units, an increase of about 15%, "this is including export sales." Analysts pointed out that this is a forecast analysis based on BYD's sales performance in recent months, in fact, "since the second half of last year, BYD's domestic growth has been significantly weak." ”
It can be seen that BYD's sales target of 3 million units in 2023 was not completed until the last month, and finally ended with 20,000 units more.
In order to achieve the sales target set in 2023, BYD will frequently adjust prices and promote in the second half of the year. However, from the perspective of terminal sales, there is not much substantial improvement. According to the terminal sales data, from June to November, BYD's terminal insurance volume was relatively stable, stable at about 230,000 units. "This reflects that the price reduction promotion has only stabilized sales, but has not brought significant growth," the analyst said.
Image source: BYD
At the same time, BYD is facing upward pressure. Under the impact of competitors such as Wenjie, the market performance of BYD Han series appeared weak. In 2023, the cumulative sales of the Han series will be 228,000 units, down from 270,000 units in the previous year. The market response of the N7 and N8 products launched by DENZA was also less than expected, with the average monthly sales hovering around 1,000 units, still supported by the D9.
For the two series of Ocean and Dynasty, analysts from Gasgoo Automotive Research Institute believe that BYD's existing core popular models such as Qin, Song, Han, Yuan, Seagull, etc., are expected to maintain the current monthly sales level or decline slightly in the domestic market this year, and can no longer provide too much increment for the brand.
As for looking up to the brand, given its million-level price positioning, it is not for the purpose of volume. According to the data, 1,500 units were delivered in the first month of the U8 in December last year. Compared with the contribution of sales, Yangwang's help to BYD is more reflected in the improvement of the brand and profit margin.
Based on last year's huge sales base of 3 million units, BYD's sales growth rate this year is difficult to repeat the double-speed growth trend. Some institutional analysts predict that BYD's net profit in 2024 may exceed 40 billion yuan, an increase of more than 10 billion yuan over last year, an increase of about 30%, and a significant decrease from the previous two years.
被合力围攻?
Compared with the current sales volume and market share of major car companies in the domestic new energy vehicle market, BYD still dominates, and its leading position is difficult to shake in the short term.
According to the data of the Passenger Association, BYD alone occupies a 35% share of the retail market of new energy passenger vehicles, while Tesla's market share in China is only 8%, and the market share of GAC Aion, Geely Automobile, and SAIC-GM-Wuling is only about 6%.
"At present, no car company can compete with BYD in a short period of time," an analyst pointed out. However, he believes that BYD also has great competitive pressure in various market segments and different price ranges.
For example, the mass market of 100,000-150,000 yuan will be the main place for new energy products in 2024. The China Electric Vehicle 100 Association predicts that this price range will be a key incremental market for new energy vehicles in the next two years, and is expected to contribute one-third of the increase. This also means that the market will also become more competitive.
In fact, in 2023, many car companies will begin to make efforts to the mass market, and new brands or products will continue to emerge. The newcomers who entered the game include strong competitors such as Chery Fengyun series, Geely Galaxy series, and Changan Qiyuan series. At the same time, old brands such as Aion and Deep Blue are also accelerating the launch of new cars to consolidate or expand their market share in this market range.
The above-mentioned car companies not only push the car fast, but also cover a variety of technical routes such as plug-in hybrid, extended range, and pure electric. With the support of the group with a strong background, many new brands or new models have strong market competitiveness. For example, half a year after the release of the Geely Galaxy series, the monthly sales volume has stabilized at more than 10,000 units. Analysts at Gasgoo Automotive Research Institute pointed out that these brands are bound to snatch BYD's share in related market segments.
In the high-end market of more than 250,000 yuan, BYD is not as smooth sailing as imagined. This can be seen from the decline in sales of the Han series and the poor performance of the Denza N7/N8. In contrast, orders for the new M7 exceeded 120,000 units, orders for the all-new M9 exceeded 30,000 units, and the total monthly sales of the Ideal L series exceeded 40,000 units.
The leading position of DENZA D9 in the high-end MPV new energy market may be difficult to maintain for a long time. With the upcoming delivery of the Buick GL8 plug-in version, as well as the competition of powerful models such as the Wei brand Gaoshan and Xpeng X9, its market position may be threatened.
Equation Leopard is also under competitive pressure. At present, independent brands are heating up the off-road vehicle market. iResearch said that with the change of consumer demand, the off-road vehicle market, especially "light off-road SUVs, is going mainstream, and it is the general trend." According to incomplete statistics from Gasgoo, more than 10 off-road SUV products will enter the market in 2023.
What's more, there are also tank brands that have been deeply involved in this segment. According to observers engaged in off-road modification work, the tank brand is very popular with off-road vehicle users, "many users sell imported off-road vehicles, turn around and buy a tank 300." "In 2023, the tank brand will sell 163,000 units. The follow-up performance of the equation leopard as a newcomer has yet to be verified by the market.
Image source: Wenjie Automotive
In the face of strong enemies, BYD's position in the capital market has also been affected. According to Bloomberg, Citigroup analysts recently lowered their price target for BYD, from HK$602 per share to HK$463 per share. They believe that as the Chinese market becomes more competitive, BYD's sales growth and profit margins may come under pressure. Citigroup also lowered BYD's sales forecast for this year to 3.68 million units from 3.95 million units.
BYD's share price has fallen 15% since mid-November 2023, according to data from relevant agencies. At present, BYD's market value is around 540 billion yuan, an evaporation of 200 billion yuan from the same period last year.
Perhaps it is the overheating of competition in the domestic market that BYD has accelerated the pace of expanding overseas markets in recent years. With cost advantages, strong product strength, and the improvement of global popularity, it is time for BYD to go overseas. It can be boldly guessed that if BYD and even Chinese car companies can seize the opportunity of new energy to go overseas, it is not impossible to give birth to one or more global vehicle manufacturer giants such as "Volkswagen or Toyota".