Honda, has also reached the point of slashing to survive?

Image source: Du Ge

Photographed at the Shanghai Auto Show in April 2023

The rise of new energy vehicles in China is making it difficult for joint venture brands.

As China's new energy brands push intelligence to a new level, some cars that cost more than 200,000 yuan but are not equipped with reversing images seem to be no longer in the eyes of domestic consumers.

At the same time, as the annual sales of domestic passenger cars have gradually touched the ceiling, the market pattern has changed to stock competition, and the degree of competition among major car companies is far greater than in previous years. In the limited market, domestic new energy vehicle brands will snatch nearly 30% of the market share, which means that the survival space of joint venture brands will become smaller and smaller.

Affected by this, in recent years, well-known joint venture brands have withdrawn from the Chinese market from time to time. Even joint venture brands that have not yet withdrawn from the Chinese market are struggling.

The same is true for Honda, a well-known Japanese car brand. Its Odyssey and Accord have gained a lot of love and reputation due to their early entry into the Chinese market. However, these two cars have recently been significantly reduced in price under fierce competition, which can't help but make people sigh, even the former sales king has to "cut prices to survive" in today's market environment.

Not only that, consumers have rarely heard of Honda's new energy models, which makes people worry about whether it can gain a firm foothold in the competition of China's new energy vehicle market in the future.

Honda, it's time to be vigilant.

1

Star product falls ●

Although the car price war has been fierce in recent years, and the joint venture brand has indeed been affected, Honda's Odyssey can be reduced to 169,800 yuan, which is still beyond most people's expectations. At present, the maximum price reduction of the Honda Odyssey has reached 73,000 yuan, and the entry-level model can be purchased for only 169,800 yuan.

As one of the earliest MPV models to enter China, Odyssey has gained nearly 700,000 users with its ultra-low fuel consumption and the same driving experience as a sedan. Unlike the GL8 and Toyota Alfa, the Honda Odyssey doesn't look so business-like, and it's also the first choice for many families to buy MPVs.

The most impressive thing for domestic consumers is believed to be the third and fourth generation Odyssey. Especially when the third-generation Odyssey was launched in 2003, the body appearance made a breakthrough improvement, the car height was reduced to 1582mm, the body was lower, and the overall length was more slender, making it have sedan-like handling and comfort, plus the 7-seat space layout, so that the Odyssey appeared very frequently on the road.

However, in the past two years, the monthly sales of the Odyssey have gradually dropped from 4 to 5,000 to 2 or 3,000 units. According to the data of Chedi, the sales volume of the Odyssey in February this year was only 1,151 units, which may also be an important reason behind its price cut.

So, as a former star MPV product, why can't Odyssey work in the Chinese market?

Among them, the biggest reason is probably the rise of domestic independent brands. Today, GAC Trumpchi's M6 has hit the price range to the level of 99,800 ~ 149,800 yuan, once again lowering the threshold of MPV, and the Odyssey itself is not positioned as a high-end commercial vehicle, and the corresponding consumer groups attach great importance to the cost performance of the product, so the competitiveness has naturally declined.

On the other hand, from the perspective of product configuration, Odyssey also seems to lack sincerity. In the entry-level model, there are not even reversing radars, reversing cameras, cruise control, center control screens, and multi-function steering wheels, which seem to be essential options at the moment. In the 121,800 yuan GAC Trumpchi M6, the above functions are all equipped, and there is even a keyless entry function.

Not only the Odyssey, but the Honda Accord has also ushered in an epic price cut. The official guide price of 196,800 yuan for the Honda Accord Smart Edition, now the discount is only more than 140,000 yuan.

As Honda's first model in China, the Accord has a long history in the Chinese market. When the fifth-generation Accord was introduced through imports, it had a large fan base in China by virtue of its high value retention rate and high quality, and the sixth-generation Accord lowered the price threshold with a starting price of 298,000 yuan, after all, B-class imported cars generally cost more than 400,000 yuan at that time.

As a result, Accord has gained a good reputation in the Chinese market. Even though the price was more than the price of a home at the time, consumers were willing to pay a premium to snap it up.

So, from the popularity to the price reduction sale, what has the Accord experienced?

The most obvious reason is that its configuration is difficult to say cost-effective. Although the previous low-profile version had a price of nearly 200,000 yuan, it did not even have a reversing image or reversing radar, which was incompatible with this era.

From a more macro point of view, although in the field of B-class fuel vehicles, it is difficult for independent brands to pose a threat. However, now China's passenger car market is close to saturation, and in recent years, there has not been much incremental market, and then new energy vehicles have to "grab food" from it, resulting in many joint venture brands having a hard time.

Especially after the popularity of new energy brands is high, the understanding of domestic consumers for smart cars has been improved by more than one dimension.

2

New energy is backward in an all-round way

Not only are the star models of fuel vehicles not as good as before, but Honda's development in the field of new energy has lagged behind in recent years.

Let's talk about the hybrid sector first, although the overall sales of the Accord have been able to maintain monthly sales of more than 6,000 units in recent years, and even reach 25,000 units in good times, the monthly sales of its PHEV models are hovering in the range of 500 to 700 units, and the sense of presence is very insufficient.

The reason is, first, Accord's PHEV model belongs to the "oil to electricity", due to the existence of both fuel tank and battery, the trunk has a large protrusion, which seriously affects the storage space in the car, which is also a common problem of the "oil to electric" model; second, the Accord PHEV model in the WLTC working condition of the pure electric range is only 82 kilometers, and does not have a fast charging function, making its competitiveness weak. You must know that even the BYD Qin DM-i, which has a guide price of more than 100,000 yuan, has a pure electric range of more than 100 kilometers.

In the pure electric sector, Honda's efforts in the Chinese market are even lagging behind. For the Chinese market, Honda launched its all-new electric vehicle brand "e:N" in October 2021, and has so far released only two production models, the Dongfeng Honda e:NS1 and the Guangqi Honda e:NP1.

You don't have to think about it to know that the sales of these two cars will not be ideal, and even the names have not been "adapted" to the Chinese version, just imagine which consumer will remember such awkward English letters?

Indeed, the e:NS1 sold no more than 200 units a month for a long time in the past year, with a brief surge at the end of last year, but now it is back below 500 units a month, and the e:NP1 has been even more dismal, with monthly sales never exceeding 100 units since November last year.

Last year, Dongfeng Honda launched a new new energy vehicle brand - "Lingxi". At the brand launch, Lingxi also unveiled its first concept car, the Lingxi L, which is built on a new pure electric platform, which is clearly different from the e:NS series with a gasoline platform.

It is rumored that the birth of the "Lingxi" brand was brought about by Yang Qing, the current chairman and secretary of the Party Committee of Dongfeng Motor Group Co., Ltd., who communicated with Honda's headquarters many times, with the help of China's local designs and suppliers, and Honda to jointly develop new energy vehicles and enhance the strength of Honda's pure electric products. According to the plan, the production car will be launched this year.

However, Lingxi, who landed on the market one step later, may have to face the most volatile market in history. Especially in terms of pricing, Chinese automakers are no longer pursuing simple pricing profits, but hope to increase sales and achieve profitability through large-scale production and cost reduction.

Huawei's executive director, CEO of the terminal BG, and chairman of the intelligent car solution BU, Yu Chengdong, said when talking about the price of Zhijie S7, the company has quarreled over the pricing of this model, and the current prices of the four versions are all loss-making, just to let more consumers experience Huawei's products, hoping that with the increase in volume in the future, the cost can be balanced.

Lei Jun also said, "Xiaomi loses every car sold, and the earliest price of the top version is 350,000 yuan, which is also a loss, and finally it is directly set at 299,900 yuan, anyway, it is vomiting blood." ”

Of course, "selling cars at a loss" is just a business model, or a marketing method, and after stimulating sales by lowering the selling price, car companies can still achieve profitability by amortizing costs on a large scale. Taking BYD as an example, in the first three quarters of last year, BYD's bicycle cost dropped by 21,000 yuan when the price of a single car fell by 17,000 yuan, and the gross profit margin of the automobile business increased to 25.6%, and its earning power even exceeded that of Tesla.

But this also means that Lingxi, as a latecomer, will fall into a dilemma under the involution effect of pricing: if the price is too high, it will be difficult to ensure sales under the high-intensity competition, and if the price is too low, it will take a long time to achieve profitability. At this time, if the sales volume is less than expected, the break-even time point may have to be delayed.

3

How to break the situation in the future?

In 2023, Honda's sales in China will be 1.23 million units, down 10.1% year-on-year. In the first quarter of this year, the situation still did not improve, and Honda sold 206,900 vehicles in China in the first quarter, down 6.11% year-on-year. Among them, Guangqi Honda's cumulative sales were 108,400 units, down 8.11% year-on-year, and Dongfeng Honda's cumulative sales were 98,500 units, down 3.80% year-on-year.

As a result, Honda Motor said that Guangqi Honda laid off 900 employees in order to quickly transition to electrification, which is also the first layoff in the 25-year history of Guangqi Honda.

As we all know, the decline in Honda's sales has a lot to do with the squeeze of China's new energy vehicles, and Honda has not been able to seize the rise of the new energy vehicle market in China, which may be an important reason for the overall pressure on sales in recent years.

In fact, Honda's failure to catch up with the new energy trend is understandable. Today, the penetration rate of new energy vehicles in China has exceeded 30%, but the penetration rate of new energy vehicles in the Japanese market is only 2.9%. For Honda, which is based in Japan, it is difficult to catch up with market changes in various countries.

However, in recent years, Honda's new energy strategy has still had many problems. In the face of China's rapid development of new energy vehicles, Honda can set up a new energy vehicle R&D headquarters, learn from the development experience of China's new energy vehicle market, benefit the global market, and strive for a share of China's new energy vehicle market through China's complete automotive supply chain.

After all, in recent years, there have been more and more cases of world-renowned car leaders choosing to cooperate with Chinese companies, just as Volkswagen still chose to sign a long-term cooperation technology framework agreement with Xpeng after realizing the lack of intelligence, and even intends to jointly develop two electric models for the Chinese market.

Recently, some media reported that Toyota, which is also a Japanese giant, may cooperate with Huawei to jointly create a solution for smart cars.

Moreover, in terms of the strategic market layout of new energy vehicles, Honda does not seem to be looking in the right direction. At this year's Tokyo Motor Show, Honda unveiled an all-electric product called Prologue, which is based on General Motors' Autonon platform and is scheduled to hit the market this year. However, the car is only aimed at North America and will not enter the Chinese market.

According to the current situation, the penetration rate of new energy vehicles in the North American market is about 13%, which is still not as mature as the Chinese market. And since the beginning of this year, the North American market seems to be developing against the trend, such as GM abandoning the goal of producing 400,000 electric vehicles in the first half of 2024, and there were rumors that Ford would close the electric vehicle production line, which was later falsified.

The core problem is that the average selling price of electric vehicles in North America is much higher than the average price of gasoline vehicles, and at a time when the economy is slowing down and demand is insufficient, Honda's choice to release a new pure electric product in North America is indeed a bit risky.

It has to be said that in the hesitation, Honda has missed too many opportunities for new energy development in the Chinese market.

Author | Ancient Moon

来源 | 车圈能见度（CarVisibility）