"Xiaomi" rolls up "Xiaopeng" rolls...... Has the wave of price cuts by car companies spread to auto parts?

Chao News client trainee reporter Zhang Heng

In one sentence to describe today's car companies, that is, "there is no most volume, only more volume".

Nearly 90,000 units were ordered within 24 hours of release, and the second round of orders for the founding version was sold out within 2 minutes...... Xiaomi Automobile, which suddenly "entered" the market, not only made a good start to the order, but also caught the already fiercely competitive car circle off guard, and it was still hot online for a month after being listed.

Seeing that Xiaomi's car orders have risen sharply, other new car-making forces have "can't sit still" and have begun to "roll" prices. The reporter noticed that in April, which is about to end, the "war" of price reduction is even more "full of gunsmoke".

Image source: Internet

Price reductions for 126 models in one month

Xiaomi's new car "roll" has launched a new round of price cuts. Since April 1, a number of car companies have announced price cuts.

Following the price reduction of the price of the M7 entry-level model by 20,000 yuan to 229,800 yuan for a limited time, on the same day, Xpeng Motors, which is also a new force in car manufacturing, announced that the 2024 Xpeng G9 can enjoy a smart driving subsidy for car purchases, with a maximum reduction of 20,000 yuan.

ZEEKR Automobile launched a rear-wheel drive enhanced version of ZEEKR 007, reducing the price by 20,000 yuan in disguise, and launching a limited-time car purchase right.

What's even more outrageous is that the discount margin of Porsche's pure electric sports car Taycan has reached more than 200,000, which is equivalent to the price of a Xiaomi Su7.

Although NIO did not directly reduce prices, it officially announced the launch of a maximum of 1 billion yuan of fuel vehicle replacement subsidies. Li Bin, CEO of NIO, who appeared at Xiaomi's car press conference, said, "The Xiaomi SU7 is too fierce to be launched, and NIO's new brand Ledao is not easy to price." ”

Chery Automobile has launched a subsidy of 10 billion yuan for the purchase of seasons, with old cars up to 30,000 yuan, and full purchase tax for designated models.

Geely Automobile has also launched a discount of up to 53,000 yuan for many models.

Even Wuling Motors, which has always been close to the people, has officially announced a price cut, and its pure electric small car Wuling Binguo has a discount of up to 10,000 yuan, and the price range after subsidies is 55,800-83,800 yuan.

All car purchases of Jiyue Automobile will be presented with DC home charging piles, and the ternary lithium battery pack with 100-degree battery will be optional, and will enjoy the preferential policy of 10,000 yuan for the whole vehicle.

Joint venture brands such as FAW-Volkswagen and SAIC Volkswagen have also joined the price reduction camp.

In addition, Zhejiang, Chongqing, Jiangxi and other places have launched a "trade-in" subsidy policy to further activate the market.

According to incomplete statistics, since April 1, more than 38 car companies with a total of 126 car series have carried out price reductions or preferential adjustments. Among them, there are 84 traditional fuel models and 42 new energy vehicles.

Auto parts companies watch the fire from across the strait?

The impact of price reductions in the end market is likely to continue to spread.

Based on the new market pattern, in this game of vehicle manufacturers, will the auto parts enterprises in the chain be affected? Can you watch the fire from the other side? The reporter learned through a variety of channels that at present, a number of listed companies in the auto parts industry are actively concerned about the impact of automobile price reductions on terminal car sales.

From the perspective of industry sectors, a research report from SDIC Securities shows that the profitability of the auto parts sector will continue to recover in 2023, but the growth rate of different segments is gradually differentiated. For example, the overall revenue growth rate of mature sectors such as automotive trim parts and aluminum die castings has slowed down, while automotive electronics, automotive seats, air suspension and other sectors still maintain a high revenue growth rate.

Take Zhejiang enterprise Joyson Electronics as an example, its main business is divided into two major sectors: automotive electronics and automotive safety. According to the annual report released by Joyson Electronics a few days ago, in 2023, Joyson Electronics will achieve revenue of 55.728 billion yuan, a year-on-year increase of 11.92%. Among them, the automotive safety business contributed about 38.528 billion yuan to Joyson Electronics, a year-on-year increase of about 12%.

Taking Hangzhou Zhengqiang Co., Ltd. as an example, the company's products are mainly sold to the after-sales market and the host supporting market. Zhengqiang shares have responded to the previous price reduction on the interactive platform, the company's aftermarket has not been affected by the price reduction tide, and most of the car price reductions are unsalable inventory products. The response also mentioned at the time, "For the host supporting market, the annual price adjustment practice is generally implemented in China, and the price adjustment agreement was signed at the end of last year or the beginning of the year, and most of the company's customers are foreign companies with a high degree of credibility." On the afternoon of April 28, when the reporter called Zhengqiang shares to inquire about the impact of price reduction, the relevant staff only said that "there may be a certain impact".

But under the extreme volume, there are still many auto parts suppliers who are "sweating" and can't stand it.

Xu Daquan, president of Bosch China, a leading supplier of auto parts, said not long ago, "Last year, the average car price in China fell by 15%, and in February this year, a new 'price war' started again, and the cost reduction of some models was about 20%-30%. Now many customers ask us to reduce the price, we are negotiating step by step, and even some places say 'if you don't agree, we won't pay', and we are coordinating with each other. On the supplier side, we are also working hard to improve production efficiency and reduce costs, hoping that through these efforts, we can give OEMs more room for price reduction, so that they can also win the 'battle'. ”

Nidec, a motor manufacturer and supplier of Tesla, has made it clear that "in China, where price competition is fierce, we will improve profits by reducing exports." ”

"Zhejiang Army", can you bear it?

The automobile industry is the fifth largest industrial industry in Zhejiang. According to statistics, there are a total of 57 auto parts companies in the A-share "Zhejiang Legion".

From 20 years ago, the China Association of Automobile Manufacturers recognized the "first domestic auto parts industry base", the development of accumulation to "more than 2,600 automobile manufacturing enterprises above the scale of the basic realization of the full field coverage of parts", Zhejiang actively embedded in the global automotive industry chain, to achieve a reasonable layout from the core parts of the car to the production of the whole vehicle.

Fang Xi, president of Zhejiang Automobile Industry Association, once said that the advantage of Zhejiang's automobile industry lies in the integrity of the industrial foundation and industrial chain, "you can assemble a car without leaving the province".

In the performance of new energy vehicles, Zhejiang's technological innovation level is generally in the first phalanx in China. In 2023, Zhejiang's new energy vehicle production will exceed 600,000 units for the first time, reaching 623,000 units, accounting for 6.5% of the national share.

Based on such a prominent volume and advantages, can the "Zhejiang Legion" withstand this round of price reductions?

The clues can be seen from the annual reports released by the company.

In terms of total operating income, among the 235 A-share enterprises engaged in auto parts in the country, Zhejiang Joyson Electronics, Ningbo Huaxiang and Jifeng Co., Ltd. ranked among the top 10 in total operating income, ranking first among all provinces in the country. Among the 57 Zhejiang enterprises, 55 enterprises have achieved profitability in their main business, accounting for more than a quarter of the country's profitable enterprises. Among them, a total of 7 enterprises led by Joyson Electronics have a total operating income of 10 billion yuan, and the total operating income is at least more than 200 million yuan.

Looking at the gross profit margin of sales, there are 34 companies with more than 20%, accounting for nearly 6 percent. This is the same trend as other domestic companies in the same industry. In addition, there are 17 companies with a sales gross profit margin of more than 30%, 2 companies with a sales gross profit margin of more than 40%, and only Hangzhou New Coordinate Technology Co., Ltd. has a sales gross profit margin of more than 50%.

Even so, cost pressures are still pushing the industry like an undercurrent.

The reporter noted that Zhejiang enterprise Joyson Electronics ushered in the double growth of revenue and profits, and the two main business development momentum is strong, the word "cost" has become a high-frequency word in the annual report, appearing 259 times, mainly used to reduce costs and increase efficiency and other related expressions;

Another Zhejiang company, Songwon Co., Ltd., has entered the supplier system of new energy vehicle companies such as Ideal and BYD since 2021, and while the production and sales volume have increased year by year, the gross profit margin of the company's automobile seat belt assembly business in the past three years has been 30.22%, 29.32% and 32.87% respectively. In Songwon's 2023 annual report, the word "cost" is mentioned 117 times.

Some listed companies responded that in the face of the fierce price reduction tide, they have started to take the initiative to respond, start to plan for long-term development, increase scientific research funds and personnel investment, and actively adjust the product structure for downstream customers. For example, we will develop lightweight products to meet the needs of customers for cost reduction.

For Zhejiang businessmen, this is an invisible pressure, but also a driving force for development.

"Please indicate the source for reprinting"