Visual China
When Zhou Hongyi, the founder and chairman of 360 Group, known as the "leader in red", announced on Weibo that he would sell his car Maybach and widely solicit new energy models of Chinese brands as his own travel tools, the efforts of many Chinese brands to seek their "favor" are completely a vivid portrayal of the current competition in China's auto market.
Some car companies sent a message to Zhou Hongyi as soon as possible, and even sent the car directly to the 360 office building with their front and back feet, and more than 10 brands commented on Zhou Hongyi or opened a single Weibo to invite him to experience.
No one wants to lose this "splashing" traffic - even if Zhou Hongyi doesn't choose himself, it's good to show his face under this popular Weibo and brush his presence in front of netizens.
Behind the traffic anxiety is the escalation of competition in the extremely involuted Chinese auto market.
Is the evolution of technology war into price war the magic weapon of the current market?
The domestic auto market, which was once dominated by joint venture brands, has become so fast.
According to China's automobile production and sales data in 2023, BYD, which ranks first, has a cumulative annual sales of 3.013 million units, about 1.2 million units ahead of FAW-Volkswagen, which ranks second, and in the top 10 list, Chinese brands account for half of the country for the first time.
This trend is illustrated in a McKinsey China survey report, which states that "the high premium advantage of foreign automakers is accelerating the dissolution, and the halo of foreign brands is almost disappearing, which is especially evident in the field of new energy vehicles".
In the era of fuel vehicles, multinational car companies may still be able to rely on the complex traditional mechanical structure to accumulate a series of technical thresholds, and enter the new energy era, the power form based on battery pack + motor drive has made the performance parity, and the threshold of automobile manufacturing has also been greatly reduced.
A report by iiMedia Research commented on Chinese brand cars: "In recent years, leapfrog development has been made in terms of product quality, energy consumption, intelligence, and electrification."
Compared with the high-tech configuration of Chinese car companies that constantly refresh the attention of consumers, it is normal for traditional multinational car companies to be slow to respond in the field of intelligence and stingy search in configuration, and to start falling behind in such a fierce competition in the Chinese auto market.
However, the rotation of feng shui does not mean that Chinese brand car companies can lie down and win.
On the one hand, there is a gap of millions of data that domestic production exceeds sales. In 2023, China's automobiles will exceed a record high of 30 million units for the first time, and overseas exports will account for 5.22 million units.
On the other hand, there are many players in the domestic automobile market. In addition to traditional multinational car companies, according to the "X auto report" in January, there are as many as 52 Chinese brands producing new energy passenger cars, and 187 new energy models are on sale. The inevitable result of such a fragmentation of competing brands and models is serious homogeneity and oversupply.
High-end intelligent voice, urban navigation assisted driving, electric suction door, 800V architecture, ultra-fast charging, air suspension + CDC ...... The latest chips, one is not enough to come to two - when all the high-tech configurations that can be rolled up, all the marketing actions that can be done have been done with little effect, the price war has become a business war method that the current car companies have to use.
In response to the wave of price cuts in 2023, the China Automobile Dealers Association put it in a word: the contradiction between excessive production capacity release and relatively insufficient demand is the main problem of China's auto market.
Whether it's a sassy operation or a real force Consumers are not easy to fool
Under the price war of exchanging price for volume, consumers seem to be the biggest beneficiaries, but with a little attention, it is not difficult to find that the price reduction policies of some car companies seem to be insincere and have a lot of routines.
Taking last year's subsidy of 90,000 yuan and detonating the price reduction frenzy of the car market as an example, the core reason for its huge price reduction is that the model is about to be discontinued and there will be no facelifted models in the future, and the shocking price also sets many restrictions: such as adding 45,000 yuan to the ticket price for purchase tax calculation, and the deposit will not be refunded if the car is transferred within 2 months. According to a user who purchased the model, the vehicle parts could not arrive in time, which greatly affected the daily use of the vehicle.
In addition to the price reduction of the last generation of models, the launch of low-cost and low-profile models is the operation of some car companies under the price reduction proposition composition: for example, the PLUS version of a new power brand, the price is reduced to 179,900 yuan, but the configuration of 10 speakers, the main driver's lumbar support, and front seat ventilation has been reduced;
And it is precisely because of this kind of commotion that consumers have become more sober and cautious, and have cultivated a group of "waiting parties" with a wait-and-see attitude.
According to a user survey in the McKinsey China 2024 Automotive Consumer Insights report, although the price war has intensified, the overall effect is relatively limited, with 80% of consumers saying that the price war has not had a positive impact on their car purchase decisions.
It is for the various price reduction games in the market, on April 12, the main force of the independent brand "national team" Roewe announced the end of watching the fire from the other side, accumulating strength, paying tribute to glory, and launching the "Rong Tornado" price action, a number of its models cash drop 20,000 yuan, and it is expected to invest more than 5 billion yuan in daily subsidies: Roewe D7 DMH, Roewe D7 EV and the new Roewe i5 limited time up to 20,000 yuan cash discount, Roewe RX5, Roewe superhybrid eRX5, Roewe RX5 PLUS, The official guide price of Roewe iMAX8 and Roewe RX9 dropped by 20,000 yuan.
Roewe official emphasized that the "Rong Tornado" price action, price reduction does not reduce allocation, does not produce a customized simplified version of fish eye mixed beads, but insists on preferential real money, real materials and real materials, sincere feedback to consumers, to "use high quality and high value to start the quality popularization war".
When gimmicks become the norm, sincerity is especially commendable.
If you want it, you really need two brushes
It is necessary not only to roll the price, but also to roll the quality and value, which is the reality that many car companies are more than willing but not enough.
The tacit status quo in the automotive industry is that domestic auto companies are generally not profitable, and new energy vehicle companies are particularly loss-making.
The basic business logic of many companies to lose money and make money is to continuously increase market share, so that product sales data and market visibility can form a certain sense of presence and trust in the hearts of consumers, so that the market can be reshuffled to complete the harvest of the market.
However, many of the "new car-making forces" that are highly dependent on external financing have only stayed at the PPT stage and announced that their dreams have been shattered; the first batch of new power brands to enter the car building have fallen on the road to seek a new round of financing; a high-end new energy enterprise with the niche toys of the wealthy class as the label of car manufacturing has entered a period of brand shock due to the announcement of a long-term shutdown - the capital side that has miscalculated the difficulty of building a car and failed may have to envy the "good shade with its back to a big tree" and those consumers whose product warranty is unsustainable may also begin to regret not choosing a brand endorsed by a large manufacturer for consumption.
SAIC Motor, the company behind Roewe, will sell 5.02 million units in 2023, ranking first among domestic auto companies in terms of sales for 18 consecutive years, of which 2.775 million units of its own brand will be sold, accounting for more than 55% of the group's sales, an increase of 2.5 percentage points from 2022. In 2023, the net profit attributable to shareholders of listed companies will return to above 10 billion yuan, reaching 10.045 billion yuan, a year-on-year increase of 11.7%, reflecting the steady improvement of the company's main business.
Compared with the new forces that have just entered the car market, Roewe, standing on the shoulders of giants, has the most direct competitive advantage in the following ways: first, the support given by the group in terms of capital, manufacturing capacity and other infrastructure - you know, how many "new car-making forces" there are The second is that the overall investment of the group's research and development can dilute the technical input cost of the sub-brand, and the group's existing technical achievements can also be directly delegated to the use of various sub-brands; the third is the group's annual vehicle manufacturing and sales capacity of up to millions of vehicles, which has a strong supply chain system ability to ensure that the best quality suppliers are used by themselves, and also has the bargaining power of suppliers, highlighting the cost advantage of centralized procurement.
In addition to the empowerment of the group, the Roewe brand said that it is an independent brand with a strong sense of mission in new energy technology. The technical foundation is the strength guarantee and confidence foundation of Roewe's "not afraid of rolls and daring to fight for a long time".
According to official information, Roewe began to explore three different new energy technology paths (pure electric, PHEV, and fuel cell) as early as 2010, aiming to provide users with diversified green travel solutions. Especially in the field of PHEV technology, which was widely regarded as a "transitional plan" by the industry at that time, Roewe has maintained continuous cultivation and innovation for more than ten years, and has won the second prize of the National Science and Technology Progress Award (and the first independent brand to win the award in China), the first prize of the China Automotive Industry Science and Technology Award and other national honors in this technical field.
Taking the DMH super hybrid system released by Roewe as an example, this representative work of ten years of leading exploration in hybrid technology has broken the patent monopoly of Japanese in this field, and has been evaluated by the media as "the strongest hybrid in China, and the strongest in China in Roewe". The Roewe D7 DMH equipped with this system has set a benchmark for energy efficiency of long-range plug-in hybrid with a comprehensive range of 1962km and a comprehensive fuel consumption of only 2.8L per 100km measured by a third party.
The person in charge of the Roewe brand has said that Roewe has adhered to the differentiated path of the core market driven by core technology for many years, and has enhanced the core competitiveness of products through long-term and continuous technological investment in technological innovation, so as to ensure that the products under the price war are also high-quality cars that can be "bought and used well" by consumers.
After the government began to change the assessment standards for central enterprises and state-owned enterprises, it means that the national team represented by Roewe can be relatively weak in the pursuit of profits. This is also an important reason why other car companies take 600 million or 1 billion to subsidize users, while Roewe can proudly take out 5 billion to make profits and show the sense of social responsibility of state-owned enterprises.
summary
When the hustle and bustle fades, business will eventually return to the track of rationality, and the essence of business is a competition of strength. China's auto industry, which has made great progress, should work hard to bring higher-level products and technologies to the industry and provide Chinese consumers with more valuable products.
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