Copper prices and batteries are variable, the car price war is over, and people who don't buy cars win

Luka cars

2024-05-26 17:33Posted in Beijing Automotive Creators

Some people choose to lay off employees, such as Guangqi Honda layoff more than 1,000, ideal more than 5,000, and some companies are on vacation and only work 2-3 days a week.

"The factory didn't say that it was off, but the headquarters and many departments have been on holiday for a while, only working 2-3 days a week, except for the Wuhan factory, many other factories are resting most of the time", recently, Yang Fei, a head joint venture, revealed to us her recent situation. The brand she is in is a joint venture brand that has been at the top of the sales volume all year round, but it is not German or Japanese.

Since the beginning of January 2023, the price war and price reduction tide in China's auto market have been raging for 17 months, and the latest situation has suddenly changed, and car companies as a whole have begun to shrink conservatively. N+1 is the break-up fee for the ideal layoff, N+3 is the break-up fee for Tesla's layoff, and N+5 is the break-up fee for Guangqi Honda. As more and more personnel optimization news broke out, the public suddenly found that from Honda, Nissan, to Volkswagen and Toyota, they are now doing personnel optimization, and most Chinese companies give N+1, while those with foreign pedigree start with N+3.

The more the price is reduced, the more involuted, the worse the sales volume, and the less profits, so more companies begin to slow down the pace and seek a smooth transition or self-protection. For example, in the sales data of the Passenger Car Association in April, the domestic sales of passenger cars were 1.532 million, down 5.7% year-on-year, but fortunately, exports were 417,000 units, up 38% year-on-year, so that the sales figure in April finally increased by 9.3% year-on-year.

With the new variables of copper and batteries, the price war is truly paused

Price cuts and profit declines are normal, but sales declines first give headaches to the executives in charge of marketing in car companies, and then make the scalps of executives in charge of manufacturing and finance numb. BYD's April sales were released and continued to maintain its leading position in the industry, but the Dolphin, which had previously exceeded 30,000 units per month, entered 10,000 units this time, and the Destroyer 07 also declined. The two did not participate in the price war in April, but the market that was too involuted caused its sales to be diluted, and subsequently, BYD quickly renewed a small promotion for Dolphin to give away the first year of full insurance during the May Day holiday, so that orders rebounded. As for the financial part, with the release of Changan Automobile's financial report for the first quarter of 2024, it is deeply involved in the price war and the development of new energy, with sales growth and revenue growth, but profits declining.

Specifically, the sales volume was 692,100 units, up 13.9% year-on-year, the revenue was 37.023 billion yuan, up 7.14% year-on-year, and the net profit attributable to the parent company was 1.158 billion yuan, down 83.39% year-on-year. According to the research data of relevant institutions, the figures given by the Minsheng Securities Research Report show that the average selling price of bicycles in the first quarter was 76,000 yuan, down 11,000 yuan year-on-year and 27,000 yuan month-on-month, and the gross profit margin was 14.4%, down 4.1% year-on-year and 5.1% month-on-month.

As the sales champion of its own brand in the first quarter (BYD was 626,000 units, Geely was 476,000 units), Changan Automobile's cost to participate in the price war is still the same, and other car companies naturally speak for themselves.

Even if the global layoffs are 10% and China's layoffs are more than 10%, Tesla still has not offered the banner of price war after one month has passed. However, on the Model 3 and Model Y, the policy of 0 down payment and 0 interest rate in mid-April was continued. Among other leading car companies, BYD's car prices are basically stable and will not continue to decline; Huawei has asked the world and the wisdom world, and the price of intelligent driving options has begun to stabilize at about 10,000 yuan, and the price of the car has no longer changed significantly; Li Xiang said on a conference call after the release of the first-quarter earnings report that prices have basically bottomed out, and there are no plans to reduce prices in the future.

And the price war has been suspended, and in addition to the facts that have happened, two new variables of batteries and manufacturing raw materials must be further superimposed.

In terms of batteries, the latest report by Cui Dongshu, secretary general of the Passenger Association, said that the loading volume of power batteries fell to 45% in April, mainly due to the shrinkage of the micro and small pure electric market, the overall growth rate of pure electric vehicles, and the significant growth of plug-in hybrid and range extension of small batteries. Therefore, although the installed capacity was 35.4GWh, a year-on-year increase of 40.9%, the loading rate declined, mainly due to the low base of new energy in April 2023.

The inventory of power battery companies is quietly growing. Therefore, recently, CATL and BYD, which are the largest respectively, have also had new trends.

CATL issued Document No. 1 of the President's Office in 2024, urgently seeking overseas markets, especially the sentence "Whoever goes overseas is the hero of CATL!" ”

Although its market share is still the world's and China's largest auto market, the market's demand for batteries has changed from lack to wealth, coupled with the price war challenges and competition of other battery companies.

BYD is also experiencing a strategic adjustment after the global new energy vehicle market is gradually slowing down. In October 2021, at the high point of the global lithium shortage, BYD signed the world's largest lithium mining contract with Chile, with a quota of 80,000 tons each, and BYD finally won the 7-year exploration right and the 20-year production right for 61 million US dollars.

However, in May 2024, this collaboration will begin to produce variables. On May 14, Li Ke, CEO of BYD Americas, told foreign media that the start date of BYD's lithium cathode plant planned to be built in Chile was delayed, citing "uncertainty" in the situation. BYD received a lithium producer license from the Chilean government in April 2023 and pledged to invest US$290 million to build a plant and start production by the end of 2025.

At present, because the price of lithium is falling and there is no suitable land to build a plant, new variables are occurring. Compared with CATL, which has to face rapid changes in the market, inventory may increase or decrease, and BYD, which has its own vehicle capabilities, will have a better life. But there is no doubt that with Mercedes-Benz, Honda, and Volkswagen all officially announcing that they have slowed down the pace of new energy transformation in their original plans, the development trend of global new energy is not as optimistic as previously envisaged, which is a reality.

Of course, there are also people who think that there will be a possible new round of price reductions because of battery inventory. If the problem can really be solved by reducing prices, then CATL does not need to shout, whoever brings CATL out will be the hero of the enterprise. In addition, CATL officially announced that it will fully implement the 5-day 8-hour work system, bidding farewell to the previous 11-hour working hours per day, which are all adjustments made to reduce inventory.

In addition to the variables of batteries, new variables have also appeared in the industry, especially copper, a key metal material for new energy vehicles.

Copper purchases in the spot market came to a standstill on May 22 as copper prices hit a record high, hitting $11,464 a tonne on Monday and a record high of 88,930 yuan per tonne on the Shanghai Futures Exchange. In the end, if you fight the car price war, you will lose money and make no profit.

The penetration rate is more than 50%, and those who don't buy cars are winning?

And after the price war is over, will it be a good opportunity to buy a car with confidence?

For fuel vehicles, it is basically realized, but for new energy vehicles, especially new energy vehicles with a price of more than 200,000 yuan, it is still full of variables. Especially after 17 months have passed, the special technology that attracted a large number of purchases before has been eliminated in the involution and has become obsolete.

Moreover, because of the price reduction of the old model, it is now difficult to stimulate sales growth, so car companies either choose to launch new models, increase configuration and reduce prices, and stimulate consumption. Either it, make new packaging and vertical integration of existing models and technologies to make new products or series. What's more, we continue to introduce models with updated technology to improve the blank of our product matrix.

In particular, Huawei, which is fierce, followed by Ideal and NIO, and a large number of traditional car companies that want to regain market dominance with new models.

At present, the price of fuel vehicles has basically bottomed out, and the main reason is that there is no way to reduce it. In the face of new energy competition, the decline of fuel vehicles is becoming more and more obvious.

In May this year, the sales of new energy vehicles set a new record, that is, the wholesale volume and the risk volume exceeded 50%, and the sales figures of fuel vehicles have been completely overwhelmed by new energy vehicles.

After the Beijing Auto Show, as the delivery of the M9 began, the 40-550,000 yuan fuel vehicle market began to slowly give up its share. In April, 13,400 units of the M9 were delivered, and orders for the domestically produced BMW X5 were affected, and sales of the Audi Q7, which had been sluggish for a long time, were affected. Three months after the BMW 5 Series was launched, the terminal discount margin is currently more than 80,000 yuan, and the average monthly sales volume did not exceed 5,000 units in the three months from February to April.

There is still some room for price reduction of fuel vehicles with a price of more than 400,000 yuan, but the surroundings in the market show that the bottom is basically bottomed.

The current minimum landing price of the Cadillac CT4 1.5T fashion version is 150,000 yuan, and the price has dropped by 80,000 yuan;

The lowest landing price of the Passat 380 high-end model in Beijing is 180,000 yuan, and the price has dropped by 60,000 yuan;

The Accord now has a landing price of less than 150,000 yuan, and if the CR-V is done in installments, the naked car is less than 140,000 yuan;

The Highlander, which once increased its price by 30,000 yuan, has now reduced its price by more than 60,000 yuan, and the hybrid mid-size SUV has only sold the price of a compact SUV in previous years. Moreover, this kind of price bottoming out, the more affordable the model, the more difficult it is to continue to reduce prices. Dongfeng Nissan official has given the sales price of Sylphy 69,800 yuan, and the evergreen Toyota Corolla did not rank in the top 10 in April's sales, only about 4,300 units, ranking outside the 25th. In fact, its price is even cheaper than before, with a price reduction of 35,000 yuan, and a low-profile naked car price of about 95,000 yuan. However, in the same level of the market, there are both the Qin PLUS DM-i with less than 80,000 yuan and the Nissan Sylphy with less than 70,000 yuan, and it is difficult for consumers not to mind the price difference.

"As long as the brand is bigger and the price is in place, it is not difficult to sell oil trucks, and the discounts are very large, and many people are willing to continue to buy oil cars. After all, compared with the new energy vehicles that are bought at a loss, the residual value of fuel vehicles is now lower than that of the industry in previous years, but it is still much better than new energy. "On the front line of the market, the sales consultants of big brand oil vehicles often do not worry about whether anyone buys them, but worry that their leaders dare to let the price of this car drop by tens of thousands.

The development of new energy vehicles is thriving, but more and more things are depreciating, and intelligent driving has changed from collecting money to mostly free. Xiaopeng sent optional,Become a standard gift,Huawei from the price of 36,000 yuan optional,Under various discounts,The lowest time is only about 8000 yuan。

Even Tesla's FSD, which is about to enter China and has made a lot of profits in North America, although Musk continues to talk about autonomous driving and historical improvement, the latest report in May this year shows that after a free trial of the new version for 3,500 car owners, the final conversion rate is less than 2%, which is lower than the 6% that Musk previously calculated. Although Musk later replied that this figure is much higher than 2%, as long as there is no L3 level regulation landed, it can only be a semi-finished product, and humans must bear full responsibility for accidents.

Although there is no high-intensity price war, due to the lack of global consumer desire, car prices can only be sold better if they fall more and more. As a result, more people are not in a hurry, and the conversion rate of the party is significantly higher.

Write at the end:

After the sales performance of pure electric models was acceptable, Huawei and Chery originally defined the Zhijie brand as only cooperating with pure electric vehicles, and the second car added an extended range version from a pure electric version. Xiaomi, which has directly become a popular product in the market,After the SU7 explosion has become a fact,The news that Xiaomi recruits extended-range power engineers and internal combustion engine engineers is a reality,Although there has been no official response to the news of the extended range,But the state of casual fermentation without refuting rumors,Obviously, it is not in line with Xiaomi's traditional style and state of doing things。

In addition, Honda is also giving birth to new cars, although it has not yet been announced, but the characteristics of three rows, plug-in hybrids, and TVs have already pointed to the ideal L8. The same is true for Weilai's Ledao, Ai Tiecheng said that the follow-up new car will use pure electric to benchmark the ideal.

The new form of automobile consumption has now become, as long as you are not in a hurry, you can wait for the better, cheaper new products.

For example, Geely will have M9 competitors, Galaxy L9, BYD's plug-in mix will meet Passat and Magotan's plug-in mix, and Huawei will also benchmark Maybach and Rolls-Royce, and the Qin L that is about to be listed has gone from low price to high price, and all products are being reshuffled.

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Personal opinion, for reference only