BMW couldn't bear it either

Chebai Think Tank

2024-06-07 16:57Posted in Hunan Science and Technology Creators

Summary: BMW needs to seize the current window

Wen Yue Pengpeng

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According to reports, the official guide price is 353,900 yuan for the BMW i3 model, and the current preferential price given by the 4S store is only more than 170,000 yuan, and the promotion efforts have reached the level of "halving".

Some media visited a number of BMW 4S stores across the country, and the conclusions they came to were indeed similar to those reported on the Internet. The eDrive 35 L model at a 4S store in Beijing is priced at 177,000 yuan for a naked car. Another 4S store exposed the price of 180,000 naked cars (do installments), all of which are about 190,000 yuan, and if they are not installed, they are expected to be about 20,000 yuan more expensive.

When it comes to luxury brands, BBA is the first thing that comes to many people's minds. As an early foreign luxury brand to enter the Chinese market, the "German Big Three" has a strong brand appeal and a huge fan base in China for a long time, which is well reflected in BBA's sales. In the BBA, BMW has the best sales results.

Last year, BMW, Mercedes-Benz and Audi delivered 824,000, 765,000 and 729,000 new cars in China respectively. According to preliminary statistics, BMW, Mercedes-Benz and Audi delivered 187,000, 168,000 and 160,000 new cars in China in the first quarter, respectively, and BMW's deliveries were about 20,000 units ahead of the other two German luxury brands.

Therefore, when the news of "more than 170,000 to buy BMW" broke out, it was a little shocking: unexpectedly, unexpectedly, even the "BMW with thick eyebrows and big eyes" couldn't bear it, and had to "sell at a loss".

First, traditional car companies are full of challenges

Behind BMW's price plunge is the decline in revenue and profit in the first quarter and the poor performance of sales in the Chinese market.

According to the BMW Group's report for the first quarter of 2024, the BMW Group's revenue in the first quarter of 2024 was 36.614 billion euros, a year-on-year decrease of 0.6%; Net profit was 2.951 billion euros, down 19.4 percent year-on-year. Among them, the revenue of the automobile business in the first quarter was 30.939 billion euros, a year-on-year decrease of 1.1%; The net profit before tax of the automotive business was 270.3 billion euros, down 29.4% year-on-year.

It is worth noting that BMW's deliveries in China in the first quarter of 2024 were 187,700 units, down 3.8% year-on-year, making it the only market where BMW's deliveries declined among all major markets. BMW officials attributed the decline in sales in the Chinese market to the fact that the new BMW 5 Series will not be launched in China until February 2024.

But just launching new models will probably not help BBA (Mercedes-Benz, BMW, Audi) much.

For example, ask a few friends around you who want to buy a car, you can know that if you buy new energy vehicles, they will consider more domestic new energy brands, and basically will not consider electric vehicles from traditional car companies such as BBA. The main reason is that the more cutting-edge technology and design of the product are not felt.

On the other hand, domestic new energy vehicles are indeed approaching step by step. As early as the beginning of this year, BYD and other domestic new energy started a new round of price war, and the entire car series dropped by 20,000 yuan, playing the title of lower electricity than oil. In addition, Wuling, Changan, Nezha, Beijing Hyundai, SAIC-GM and other car companies have joined the price war and collectively announced a number of models to reduce prices. This wave of damage can come very quickly for BMW.

In addition to the price factor, the cutting-edge brands in the domestic new energy market should not be underestimated. In terms of sales, in May, NIO, Xpeng and Li delivered a total of 65,710 vehicles, an increase of about 29% month-on-month and a year-on-year increase of about 57%. Since the beginning of this year, the three companies have delivered about 249,000 vehicles, an increase of 36% year-on-year.

BYD sold a total of 331817 new energy vehicles in May, a year-on-year increase of about 38.13%. Among them, 37,499 passenger cars were exported, 315227 BYD Dynasty 丨 Ocean was sold, 12,223 were Denza Auto, 608 were Yangwang Auto, and 2,430 were Formula Leopard Auto.

After cooperating with Huawei, Sailis sold 34,130 vehicles in May, up 298.6% year-on-year and 22.5% month-on-month.

There is also Xiaomi, a new entrant friend, following the delivery of 7,058 vehicles in April, Xiaomi cars continued to grow to 8,630 units in May, and more than 15,000 vehicles were delivered in two months.

At present, "electrification" and "intelligence" of automobiles are two very clear trends in the development of the industry, and they are closely related. In the application of intelligent technology, electric vehicles are more suitable for intelligent equipment than fuel vehicles. The electric vehicle can receive and respond to the sensor signal faster, and the data processed by the computer can be directly transmitted to the three major departments of the motor, battery and electronic control, and the action will be more accurate.

With more and more intelligent automotive technologies seizing the highland of consumption, the range anxiety of new energy vehicles has also been basically solved, and traditional car companies are facing great challenges.

2. BMW's required questions

In the past, BMW, as a luxury brand, was known for its high price, and it was a presence that would be looked at more on the road, but now it has fallen to half the price. This is a true portrayal of the fierce competition in China's auto market.

In the past year, in the new energy market, China's new energy brands staring at the BBA plate can be described as eyeing the tiger, especially Ideal and Wenjie, both of which are positioned in the luxury market, which also squeezes out the living space of other luxury car companies.

For BMW, its own electrification transition is also relatively slow.

Up to now, BMW still does not have a pure electric platform, and the current new energy vehicles are still from the CLAR platform, which is compatible with multiple power modes such as ICE, PHEV, and BEV. In the face of the intensifying price war in China's auto market, luxury brands such as BMW also need to use new price strategies to meet this challenge.

In the Chinese market, although first-tier cities are the first choice for new energy vehicles due to policy and other reasons, in the sinking market, the brand effect built by BBAs in the era of traditional fuel vehicles has not been easily replaced by new energy vehicle brands, and some people still choose BBA.

This also means that BMW's brand effect will not dissipate immediately in the short term. It needs to seize the current window period, capture the minds of Chinese consumers, and lay a more solid foundation for its new energy transition. 

BMW also knows where it excels.

Including the BMW M5, BMW will bring nearly 10 high-performance models to China this year. By the end of this year, the M brand is expected to sell 23 models in China, ranging from compact, mid-size to large luxury vehicles, with a variety of energy forms such as gasoline, electric and plug-in hybrid.

In the face of China's diversified market, BMW still has a lot of cards to play, and can continue to win the favor of consumers with its products before the new platform is launched.

In April this year, BMW also announced that it plans to invest an additional 20 billion yuan in its Shenyang production base to deepen its presence in China and help the "new generation" models roll off the production line in China as scheduled in 2026.

In the longer term, BMW wants the range and profitability of electric vehicles to be on par with gasoline vehicles. This also means that BMW still has a long way to go in terms of investment in the industrial chain and cooperation with suppliers, dealers and other partners to find a new balance between product changes, sales volume and financial returns.

It's going to be a long marathon. The price of BMW i3 is a metaphor, in this long-distance run with no way out, as strong as BMW will also encounter twists and turns, how to repair the loss of brand value caused by these twists and turns in the next time, is a must answer to the question of its new energy era.

III. Conclusion

In fact, BMW is not the only luxury car brand that is not having a good time in the Chinese market. Needless to say, the actual price of Mercedes-Benz pure electric models in 4S stores is far lower than the manufacturer's guide price. For example, the EQE 350 luxury version with an official guide price of 496,000 yuan, at present, 4S stores can give a discount of about 150,000-180,000 yuan, and the actual transaction price of a naked car is only a little more than 300,000 yuan, and the overall discount is greater than that of fuel vehicles.

Generally speaking, the electrification transformation of traditional luxury brands has not gone smoothly, and the price system established by traditional fuel vehicles has not been recognized by consumers in electric vehicles, and now it has to attract consumers through large discounts. In contrast, new domestic EV manufacturers are more sought after in the high-end electrification market.

In any case, BMW's price cut has undoubtedly brought new changes to the market. It not only allows consumers to buy their favorite BMW models at a lower price, but also allows the market to see the coping strategies of traditional car companies when facing sales difficulties. For the entire automotive industry, BMW's price reduction may be just the beginning, and in the future, with the intensification of market competition and continuous technological progress, we may see more car companies adopt similar strategies to respond to market changes.

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