On April 23, Huawei's high-end smart SUV Wenjie new M5 was officially released. AT THE PRESS CONFERENCE, YU CHENGDONG, CEO OF HUAWEI CONSUMER BG, REVEALED THAT THE PRICE OF THE NEW M5 STARTS AT 249,800 YUAN, WHICH IS ABOUT 40,000 YUAN LOWER THAN THE PRICE OF THE PREVIOUS GENERATION MODEL M5, WHICH IS A LOSS-MAKING STATE.
He bluntly said that under such fierce competition in the new car market, the price pressure of manufacturers is "mountainous", and the industry is "too volatile". So, can the new M5 rely on ultra-high cost performance to open sales and gain a firm foothold in the highly competitive market?
THE PRICE RANGE OF THE NEW M5 IS 250,000 TO 280,000 YUAN, WHICH IS ABOUT 40,000 YUAN LOWER THAN THE PREVIOUS MODEL M5. Yu Chengdong said that under such fierce competition in the industry, the pricing pressure is "mountainous".
He revealed that the high-end intelligent driving models are sold at a loss, hoping to dilute the cost through scale effect. For Huawei, this price can be said to be a "table-lifting", and it directly chooses to reduce profit margins in exchange for market share.
The competition in the new energy vehicle industry can be said to have reached a white-hot point. According to industry insiders, the gross profit margin of sales of many new models has been as low as single digits, or even losses.
In the market environment of serious homogenization, major car companies have to rely on price reduction promotions to compete for orders. However, the high cost of batteries and other costs has seriously squeezed profit margins. This has led to many car companies falling into the quagmire of losses, and it is difficult to find a breakthrough in profitability.
The loss-making pricing of the new M5 reflects the dilemma faced by the current car companies. The pressure of market competition is huge, and it is difficult to increase sales without price reduction; High costs lead to little profit after price reductions.
Huawei's choice to actively reduce profits is also the result of careful consideration. According to the analysis of industry experts, this is conducive to the new M5 to quickly open up the market and seize the sales share. As long as the sales volume reaches a certain scale, the loss is bearable.
Judging from the configuration of the new M5, it has advantages in power, intelligent driving, and space. The power battery supplier is CATL, with a self-developed motor, and the battery life performance is considerable. In addition, the high-end version is equipped with Huawei's self-developed ADS driving system as standard, which has relatively advanced autonomous driving capabilities. The interior space is also more spacious than that of other models in the same class. Taken together, these selling points make the new M5 a clear leader in terms of cost performance.
Therefore, the new M5 is expected to rely on ultra-high cost performance to open up the market situation. It has the potential to become a "dark horse" in the new energy SUV market, attracting consumers with needs but limited budgets. If the new M5 can achieve the expected sales growth, then the loss will become affordable. Huawei's move is undoubtedly a trick in the market competition and may turn the situation around.
Of course, there are still many challenges for the new M5 to succeed. It needs to compete head-on with existing old rivals and win customer acceptance. At the same time, as production increases, cost control is key.
Only a two-pronged approach can gradually achieve profitability. We look forward to the smooth opening of the new M5 in the market, and we also hope that Huawei's smart car brand can gain a firm foothold and develop steadily in the competition."
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