The price war has played a more cruel reality! The ideal cannot hold back the official surrender, and some car companies play the old routine

Snail Car Chronicles

2024-04-25 10:48Posted in Guangdong automotive creators

After entering 2024, the price reduction of the car rim will continue to heat up. It did promote a wave of sales boom, but the scene of "increasing revenue but not increasing profits" also plagued the automotive industry. According to statistics, in January and February this year, the profit margin of the automotive industry fell to 4.3%, which is at a historically low level.

Although the industry is difficult, the revenue level of each car company is not the same. The price reduction strategies they give are also different. Let's take stock of what kind of routines have been used by car companies that have recently cut prices to buy people's hearts?

Ideal: price reduction + price difference across the board

From the analysis of the sales list we have done every week since the beginning of this year, we can intuitively feel that the ideal decline is obvious. Therefore, in the past, the ideal car that held high the banner of "no price reduction" also had to take the initiative of "exchanging price for volume", and the pure electric MPV MEGA that had just been listed recently dropped by 30,000 yuan, which was reasonable but the pace was so fast that it was surprising, after all, it was only a new car that was on the market for less than two months.

In addition, the price reductions of the 24 ideal L7, L8 and L9 models ranged from 18,000 to 20,000 yuan.

This price adjustment is undoubtedly a concession to the market situation, although it has somewhat backstabbed 23 old car owners, but for users who buy 24 L series models and MEGA, it is a big bargain without routines.

Among many car companies, it is rare to have more confidence in the ideal adoption of this strategy. In 2023, Li Auto's revenue will be 123.65 billion yuan, of which the net profit will reach 11.81 billion yuan, making it one of the few new power brands that has achieved good profitability. Let's calculate that the sales volume of Li Auto in the first quarter of this year will be 80,400 units, which is not much different from the 86,500 units in Q2 of 2023, and for reference, the ideal net profit in the second quarter of 2023 will be 2.31 billion yuan.

Therefore, based on this calculation, although the ideal wave of price reductions and the cash feedback provided to the owners who have purchased the corresponding models and picked up the car will invest between 550 million yuan and 600 million yuan, the whole is a state of hemorrhage, but it will not be a loss for car companies, and there will still be profits.

Tesla: The official drop is 14,000 yuan

Under the influence of "force majeure" factors such as the shortage of parts and components, as well as the pressure from Chinese brands, Tesla's delivery performance in Q1 this year was not impressive, with 386,800 new cars delivered worldwide, which was Tesla's worst sales in the past five quarters.

Therefore, recently, Tesla has announced price cuts in both overseas and domestic markets, with the starting price of Model 3 in China dropping to 231,900 yuan and Model Y starting at 249,900 yuan. In order to boost Tesla's Q2 sales.

According to Tesla's financial report, the operating profit margin in the first quarter of this year reached 11.4%, which is 2.2 percentage points higher than the operating profit margin for the whole year of 2023. Looking at Tesla's net profit in 2023, it will reach $14.997 billion. Such a considerable profit does not prevent it from putting down its body in exchange for sales.

On the one hand, the current price is not the lowest level in Tesla's history in China, and after the official drop last year, the starting price of the Model 3 has dropped to within 230,000 yuan. On the other hand, Tesla's new battery agreement price, the cost of battery raw materials has dropped to 30,000 yuan, and the cost of the whole vehicle is reduced. Another is the volume of the current Chinese brand car market, especially the pure electric vehicles in the range of 200,000-300,000 yuan, which are against Tesla, and the product strength is better than that of Model 3/Model Y, and the price is not high.

Lynk & Co 08 EM-P: New low-cost version, reduced configuration

Among traditional car companies, Geely's total sales last year exceeded 1.68 million units, with a net profit of 5.3 billion, which was less than half of that of Li Auto last year. Therefore, the price war continues to fight, and the pressure on this part of the car companies is still quite large. They have adopted a new model with a "price reduction and reduction" to ensure profits.

For example, recently, Lynk & Co 08 EM-P has added a 120 long-range Plus version, priced at 195,800 yuan, and given a limited price of 179,800 yuan. It is 13,000 yuan cheaper than the Pro version, and the configuration has reduced Harman Kardon audio, rear independent air conditioning, front seat ventilation/massage/lumbar support function, rearview mirror automatic anti-glare function, steering wheel heating and other functions, including leather seats changed to imitation leather seats.

This method is mainly to lower the entry threshold of the model, ensure that the core configuration is in the case of meeting daily needs, and reduce some comfort configurations.

Xpeng: Launched a limited-time subsidy of 500 million yuan, and added an entry-level version to the G6 series

Xpeng has made a lot of moves recently, with a net loss of 10.38 billion yuan in 2023, which makes us feel the difficulties of Xpeng Motors. In 2024, its deliveries have increased but the pressure is still very high, with Q1 Xpeng delivering nearly 22,000 vehicles, a year-on-year increase of 20%, in line with the company's previous expectations of 21,000 to 22,500 vehicles.

However, such sales are all caused by price wars. At the end of April, Xpeng launched a time-limited car purchase subsidy of 500 million yuan, covering four models: G9, P7i, 2024 P5, and G6. In addition, Xpeng G6 also added 580 long range Plus, which was reduced by 10,000 yuan compared with the original entry model, and the official guide price was 199,900 yuan.

The difference with the Pro version is that the ventilation of the front seats and the heating of the steering wheel have been eliminated, the four-way adjustment of the height of the main driver has been changed to a two-way adjustment, and the adjustment of the lumbar support has been eliminated. The number of speakers in the car has also been reduced to eight.

As a whole, like the Lynk & Co 08 EM-P, some comfort configurations are reduced to reduce costs.

Write at the end

The price war is still ongoing, and I believe that more car companies will offer preferential policies in the future. Car companies with deep pockets are reducing money with real money, while car companies with less profits can only tighten their belts and find ways to "reduce prices and allocations". What do you think about this?

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