At the 2024 Beijing Auto Show, the phenomenon of shaping the brand image upward and adjusting the price strategy downward is particularly prominent. The auto show was held again after a four-year hiatus, and the competition was fierce with the launch of new brands and products from major car companies. Whether it is a new model or an upgraded blockbuster product, price reduction promotions have become a common phenomenon. In this period of serious involution in the industry, car companies should not only compete for market share through price wars, but also pay attention to the shaping and improvement of brand image, so as to stand out in the fierce market competition.
There is no minimum price
In the warm atmosphere of the auto show, the rumor of "changing the price once every two minutes" has become a reality, rather than groundless. Zhao Yifan, general manager of Wuling Product Innovation Center and Product Marketing Center, revealed an astonishing fact: the Wuling Starlight Co-creation Edition, which was originally priced higher than 79,800 yuan, suddenly dropped sharply on the eve of the auto show to attract the attention of more consumers. This move immediately triggered a chain reaction in the market, and the major car companies couldn't sit still, competing to follow up the price reduction, and the price of vehicle products seemed to be not the lowest, only lower.
The trend of price cuts intensified at the Beijing Auto Show, and a number of models made their debut with the attitude of "breaking through" the bottom line of prices. GAC Toyota's 2024 Sena has been upgraded and reduced by 25,000 yuan, demonstrating its strong market competitiveness. The starting price of the Shanhai T2 has dropped to 179,900 yuan, bringing the price of the hybrid off-road model into the affordable range of less than 200,000 yuan. Kia, a brand that is about to celebrate its 80th birthday, also launched the affordable Sonai at the Beijing Auto Show, with a starting price of only 88,900 yuan. Consumers were pleasantly surprised to find that at the Beijing Auto Show, many models were unbelievably cheaper.
As early as before the official opening of the auto show, major car companies have already shown their weapons of price war. The new 580 Plus of Xpeng G6 was unveiled at a price of 179,900 yuan for a limited time, a decrease of 30,000 yuan from the starting price in June last year. And Xiaopeng struck while the iron was hot, and launched a time-limited car purchase subsidy of 500 million yuan, and various models have different degrees of discounts. This gimmick of "limited-time" discounts, with the help of the pre-show warm-up and the country's trade-in policy, has brought the price of vehicles to an unprecedented new low.
Geely Galaxy E8 also launched the Longteng version on the eve of the auto show, and the price was lowered to 165,800 ~ 215,800 yuan, which is more affordable than the previous starting price. The Lynk & Co 08 EM-P has also launched a new model, and the starting price has been reduced to 175,800 yuan, which is 33,000 yuan lower than the original price.
During the auto show, Tesla also cut prices as expected, and the price of all models was reduced by 14,000 yuan. Subsequently, Ideal also quickly followed up, launched the ideal L6 with a price drop to 249,800 yuan, and announced a price reduction for the whole series, of which the ideal MEGA decreased by 30,000 yuan, and the L series models decreased by 18,000 ~ 20,000 yuan according to different configurations. This price war intensified at the Beijing Auto Show, allowing consumers to enjoy unprecedented discounts on car purchases.
The brand does not stop up
Brand upward is something that independent brands have been trying to promote over the years, especially as the price of BYD's Yangwang model exceeds 1 million yuan, and the brand of independent brands has broken through the price ceiling again and again. From Weilai gaining a foothold at the level of 300,000 yuan, to selling more than 600,000 yuan and still being paid, and then to looking up to the million yuan that consumers think is worthwhile, the upward breakthrough of independent brands has achieved phased success, and it is not the success of a single brand, but a collective breakthrough, independent brands are getting rid of the impression of low quality and low price in the minds of consumers in the past, and gradually moving towards high-end. This kind of high-end is not only an increase in price, but also an increase in brand value, and in the minds of consumers, high-end independent brands are being accepted.
"At this year's Beijing Auto Show, the attention of independent brands has far exceeded that of established car companies. Mi Mengdong, general manager of Changan Automobile's brand public relations department, emphasized in an interview with a reporter from China Automotive News that at present, it is the tuyere period for independent brands to rise.
It is precisely seeing this outlet that a number of independent brands have started a new competition for brand breakthroughs. After seeing the success of "Wei Xiaoli", especially Weilai and Ideal models with a price of 300,000 yuan or even 400,000 yuan, mainstream independent brands competed to launch various high-end brands, from Lantu to Galaxy, from Polestar to Yangwang, and then from Wei to AVATAR. "In 2024, Chery will no longer be polite. After Yin Tongyue, Secretary of the Party Committee and Chairman of Chery Holding Group, shouted "no longer polite", Chery in 2024 will make another effort in terms of branding, following the new energy vehicle brand iCAR, it will also launch Yueji. NIO launched a new brand Ledao, Xpeng Motors also launched a second brand MONA, and the cooperation between Huawei and BAIC was officially released...... Volume brand has become a major strategy for many car companies to cope with market competition.
In this regard, He Xiaopeng, chairman and CEO of Xiaopeng Motors, said frankly that in order to become a world-class car company and have absolute sales, it is necessary to have a complete model pedigree to deal with different market segments. In this regard, Volkswagen, Toyota and other international car giants have also practiced. As a result, in the face of fierce market competition, launching more brands and competing for different market segments has become the choice of many enterprises. Not only domestic brands, but also many large international car enterprise groups are also deepening the marketing of different brands in China. Taking BMW as an example, while the BMW brand continues to expand in China's high-end market, the MINI brand has never stopped expanding its market pace. According to the plan, in 2024, BMW will launch more than 20 new models under the BMW and MINI brands in China to further meet the different needs of consumers.
Find the right balance between price and value
In the face of the trend of "involution" in the market, each car company's strategy and path have their own characteristics. As Yang Meihong, Vice President of Communications and Corporate Social Responsibility of Ford Motor (China), said, whether it is to adopt a price reduction strategy or improve the brand image, it is necessary to maintain a balance and balance. Excessive emphasis on brand lift can lead to excessive prices that can lead to the loss of some consumers, while excessive price reductions can damage brand image and reduce consumer trust and loyalty to the product.
Zhao Yifan also pointed out that the continuous escalation of the price war has exacerbated the wait-and-see sentiment of consumers, which is also an important factor in the sales of some models in the first quarter did not meet expectations. Therefore, when formulating a price strategy, enterprises must comprehensively consider market demand, competitive situation, product characteristics and brand positioning and other factors to ensure that the price strategy not only meets the market demand, but also is conducive to the long-term development of the enterprise.
Zhao Yifan particularly emphasized that we should not blindly pursue price wars, but should pay attention to brand value beyond price. In recent years, Wuling Motors has begun to focus on technology communication, by emphasizing technical capabilities, enhancing brand image, and then achieving brand premium. This is also the direction that many car companies are actively exploring in the involution between price and brand.
At present, the profitability of the new energy vehicle market is not optimistic, except for a few companies such as BYD, Tesla and other companies through scale advantages to achieve profitability, most of the companies are still in a state of loss. Therefore, price reduction has become a helpless move for many enterprises. However, in order to compete more effectively, many companies choose to compete more specifically for different market segments by launching different brands. This is also the fundamental reason why many businesses launch a second brand.
Taking the Ledao brand launched by NIO as an example, its positioning is very clear - the mainstream consumer market. Ledao brand not only pursues the quality and performance of products, but also pays more attention to meeting the needs of consumers, and is committed to creating a new energy vehicle with high cost performance and high-end quality. Compared with the NIO models currently on sale, the price of the Ledao brand is more affordable. Similarly, Xpeng's MONA brand will also target the 150,000-yuan market to seize market share at a more competitive price.
However, both Ledao and MONA also face fierce competition when the brand sinks into the lower market, and the pricing issue has become the primary consideration. After Xiaomi SU7 lowered the price to 200,000 yuan, Li Bin, founder of Weilai, also admitted that Ledao's pricing has become more tricky. In the market environment of severe involution, the product pricing of car companies should not only consider their own products, costs and other factors, but also consider the prices of competing products more to formulate a more reasonable price strategy.
Text: Wang Jinyu Editor/Photographer: Guo Chen Layout: Liu Xiaoye
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