Although the auto market is staging a vigorous "price reduction tide", it seems that the effect is not obvious at present.
On May 10, the China Passenger Car Association released data showing that the retail sales of the passenger car market in April 2024 were 1.532 million units, down 5.7% year-on-year and 9.4% month-on-month. In other words, today's "price reduction tide" has not had an effect, and even sales are still declining.
As we all know, the Chinese auto market in 2024 can be described as a strong volume, after all, new energy leading car companies like BYD have fired the "first shot" of price reduction at the beginning of the year, and have successively launched a number of glory models, so that "electricity is lower than oil", and this action not only makes a lot of new energy vehicles wail, but also further compresses the living space of fuel vehicles, and the competition in the car market has suddenly become white-hot.
It is worth noting that not only many car companies have followed the price cut, but also some time ago, the Ministry of Commerce, the Ministry of Finance and other 7 departments also jointly issued the "Implementation Rules for Car Trade-in Subsidy". It is reported that the policy is for scrapping the national III and below emission standards fuel passenger cars and new energy passenger vehicles registered before April 30, 2018, and purchasing new passenger cars that meet the energy-saving requirements of individual consumers, to provide subsidies of up to 100000000. In this context, in order to follow up on the policy, more car companies have joined the price reduction boom.
It stands to reason that if the price is generally reduced, it will definitely boost sales to a certain extent, after all, it is also a good thing from the perspective of consumers to be able to buy their favorite products at a more cost-effective price. But why is the competition in the auto market so fierce, and the market performance in April even showed a year-on-year and month-on-month decline?
In fact, the decline in car sales in April was due to multiple factors. On the one hand, April is not the peak sales season, and there are not many people who buy cars at this time in previous years, even if the drop is considerable, but for many consumers, this is not a small number. And you must know that the current "price reduction tide" is still continuing, so if it is not just a user, there are still many people who choose to wait and see, after all, no one can guarantee that more discounts will be given in the future, which means that the instability of car prices makes many people dare not buy a car rashly.
On the other hand, the "trade-in" policy has just begun to be implemented, and many follow-up car companies have even begun to implement it in May. Take BYD as an example, it released a big move during the "May Day" holiday, and launched a preferential car purchase policy for various models of Dynasty Network and Ocean Network. Specifically, BYD has launched a replacement subsidy of up to 10,000 yuan for marine network models, and the policy can also be superimposed with a national trade-in subsidy of 10,000 yuan; Preferential car purchase policies have been launched for each model of its Dynasty Network, with a maximum subsidy of 8,000 yuan, which can be superimposed with a national subsidy of 10,000 yuan. To put it simply, the trade-in policy launched today did not have much of a boost in April, and it may not be until May to have a better effect.
More importantly, after the rise of new energy vehicles, the sales of fuel vehicles have been falling endlessly. For example, in April, FAW-Volkswagen fell 15.6% y/y to 119,000 units, SAIC Volkswagen fell 21.7% y/y to 78,000 units, GAC Toyota fell 32.1% y/y to 52,000 units, and Dongfeng Nissan fell 9.6% y/y to 52,000 units...... Obviously, the German-Japanese joint venture brands in China have gradually "frustrated", which has also inhibited the room for sales growth to a certain extent.
Write at the end
In the past few years, the overall performance of the automobile market is not too prosperous, especially after the rise of new energy vehicles, many old traditional fuel car companies can not resist the pressure, and sales have declined sharply. Fortunately, the country has now launched a trade-in policy, and with many car companies following up, we also expect the auto market to pick up again in May.
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