Auto Market Investigation: Luxury Car Prices "Break Bones" Car companies have opened the "price for volume" mode

China Business News

2024-06-15 07:08Published on the official account of Beijing China Business Daily

Reporter Xia Zhibin and Quartz Jing reported from Shanghai

"Is this still the luxury car brand we know?" After seeing the hot search entries on Weibo such as "Cadillac only sells for more than 130,000 yuan" and "BMW cut in half", Zhou Tao (pseudonym) from Hefei asked the reporter of "China Business Daily" with a smile.

"The price of this 1.5T, lowest-equipped CT4 naked car is indeed only more than 130,000 yuan, but you must take out a loan." On June 11, in a 4S store in Cadillac, Shanghai, Wu Peng (pseudonym), a sales consultant, told reporters, "We will have rebates because of loans." ”

The sharp price cuts of Cadillac and BMW have attracted the attention of the market. On June 11th and 12th, the reporter visited a number of Cadillac and BMW stores in Shanghai and found that these luxury car brands did have strong price reduction measures.

Zhang Xiang, a visiting professor at the Yellow River Institute of Science and Technology, told reporters that the price cuts of luxury car brands such as BMW and Cadillac in the Chinese market are closely related to the current fierce competitive environment. "The road to the rise of domestic independent brands has achieved good results, many new forces of products have entered the price range of more than 300,000 yuan, and the performance in the market is not bad, which brings a certain impact to the traditional luxury car brands, under the influence of their own inventory pressure, they must make adjustments to the status quo."

Regarding the price reduction behavior of the above-mentioned luxury car brands, auto analyst Ren Wanfu told reporters that the purpose of car companies is to stimulate the consumer market through price reductions and boost their own sales to maintain the leading position of the brand. "At present, the domestic automobile market is developing rapidly in electrification and intelligence, and independent brands such as BYD, 'Wei Xiaoli' (Weilai, Xiaopeng, Ideal), and Xiaomi continue to occupy the market share of traditional fuel vehicles. The prices of these products are basically concentrated between 200,000 and 400,000 yuan, which brings greater pressure to the survival of luxury car brands. ”

Related media reported that a Cadillac dealer in Harbin issued a poster saying: "Buy one get one free, buy XT5 or XT6, that is, get CT4." Drive two cars for a penny. ”

The reporter inquired about Cadillac's official website and learned that Cadillac has two dealer stores in Harbin. For the actual effect of the above-mentioned marketing behavior, the reporter repeatedly called the two landline numbers left on the official website, but one was empty and the other was down.

Regarding Cadillac's "buy one get one free" poster on the Internet, the relevant person in charge of SAIC-GM told reporters that the main engine factory does not have this policy and will not implement the policy. "[The poster] may have been made by some dealer marketing staff."

But in the end market, the Cadillac CT4 does have a large discount. "Buy one get one free means that if you buy an XT5 at the original price, you can get a CT4 with the lowest configuration." On June 11, Cadillac sales consultant Wu Peng explained to reporters.

Wu Peng told reporters that the Cadillac CT4 has 1.5T and 2.0T, the naked car price of more than 130,000 yuan is 1.5T, and the price of 2.0T CT4 is higher, requiring more than 150,000 yuan. "This year, there are seven or eight 1.5T CT4 in the store, 40-50 2.0T CT4, and now there is one CT4 of more than 130,000 yuan in the store, and there are two more CT4 2.0T, and the 2.0T CT4 is selling well."

The reporter noticed that Wu Peng's "selling well" was the result of "exchanging price for quantity". He also admitted to reporters: "There is no way to lose money, which company does not lose money when selling cars now?" The CT4 in the store will definitely sell within this month. ”

"We don't have a show car on the CT4 either. You can order it now, but the ones you ordered are all last year's cars, and I don't know the specific months, they are all stock cars. The lowest price on the Internet is the lowest configuration. Another sales consultant said.

The sales consultant of another Cadillac store also explained to reporters: "If you buy an XT5 at the original price, you can get a discount of 1340,000 yuan, and the lowest configuration CT4 is also at this price, and the overall price is about the same." We don't have a CT4 show car in our store anymore, and the last two or three are sold out because they are going to be discontinued. The reason it's so cheap is because the CT4 is going to be discontinued. ”

In addition to the sales consultant mentioning the suspension of production, there is also news of the suspension of Cadillac CT4 in the market, and the above-mentioned person in charge of SAIC-GM denied it to reporters. "CT4 has not been discontinued, and we will carry out refined production scheduling management according to market demand."

"The naked price of our car is 190,000 yuan, buy an insurance, and 200,000 yuan can land." Coincidentally, on June 12, at a BMW store, a salesperson introduced the i3 model to reporters. "The original price is more than 350,000 yuan, which is equivalent to more than 160,000 yuan cheaper. The price is already full, and I can't fault anything, and I can sell seven or eight cars a month. ”

The above-mentioned salesperson bluntly said: "i3 is now used to run volume." Now the i3 is inverted, and there is a gap between the domestic price and the international price. For example, in Hong Kong, Macao and Taiwan, this car costs 400,000 yuan. In Central Asia and Russia, this car will be sold for more than 400,000 yuan, and we can now sell it for 200,000 yuan. ”

"Cadillac, as a second-tier luxury car brand, is understandable that it has made relatively large price cuts. But first-tier luxury car brands like BMW are also following suit, which also shows that the survival pressure of BBA (BMW, Mercedes-Benz, Audi) is not small. Ren Wanfu said bluntly, "Looking at the global automobile market, they still occupy a leading position, but in the Chinese market, their leading edge is shrinking, and they are also constantly affected by external impacts, market sales are shrinking, market share is gradually declining, if there is no such strong measures to follow up, the next few years may face greater pressure to survive." ”

The "price war" continues to be fierce

On June 11, data released by the Passenger Car Association showed that the retail sales of the national passenger car market in May were 1.71 million units, a year-on-year decrease of 1.9% and a month-on-month increase of 11.4%.

Specifically, the retail sales of self-owned brands in May were 980,000 units, a year-on-year increase of 12% and a month-on-month increase of 12%. In May, the domestic retail share of domestic brands was 57.6%, up 7.3 percentage points year-on-year, and the cumulative share of domestic brands in 2024 was 56%, up 6.6 percentage points year-on-year. In May, the wholesale market share of self-owned brands was 64%, an increase of 9.2 percentage points over the same period last year.

The reporter noticed that the performance gap between joint venture brands and independent brands is more obvious. In May, the retail sales of mainstream joint venture brands were 490,000 units, a year-on-year decrease of 21%; the retail share of German brands was 18.6%, down 2 percentage points year-on-year; The retail share of Japanese brands was 14.8%, down 3.2 percentage points year-on-year, while the retail share of American brands reached 6.7%, down 1.4 percentage points year-on-year.

The performance of the luxury car market also weakened. Retail sales of luxury cars in May were 240,000 units, down 3% year-on-year and up 19% month-on-month. The retail share of luxury brands in May was 14%, down 0.2 percentage points year-on-year, and the demand for traditional luxury cars was not very strong.

"Now the domestic automobile consumption is getting younger and younger, under the guidance of policies and markets, consumers are more and more receptive to new energy vehicles, but the traditional luxury car brands are not very optimistic about the new energy transformation in China." Zhang Xiang added, "The market is now extremely involuted, both 'volume' technology and 'volume' price, and price reduction may be one of the most effective ways for car companies to increase sales." ”

"In the automotive industry, economies of scale are a key factor. In previous years, these luxury car brands have been expanding their production capacity, and if the market does not increase the number of orders, the factories will have overcapacity, so that the enterprises face more cost pressure. ”

Ren Wanfu also said frankly: "From the current point of view, if you want to keep the Chinese market, price reduction is only a means, and it is fundamentally necessary to develop towards new energy and intelligence, so that they may continue to occupy a place in the luxury car market in the future." ”

Since the beginning of this year, the degree of "involution" in the domestic auto market has been upgraded again, and this "involution" is not only reflected in price and technology, but also in the executives of car companies.

Taking the price competition in the automobile market this year as an example, Cui Dongshu, secretary general of the Passenger Association, released an article on June 6 showing that the scale of price reductions from January to May 2024 has exceeded ninety percent of the whole year of 2023 and exceeded the total scale of price reductions in 2022.

Cui Dongshu said: "In the past few years, the price war in the national passenger car market is generally about 4 points higher than the promotion growth level at the end of each year compared with the end of the previous year, but in 2024, the price war in the national passenger car market will continue to be fierce, and the promotion peak of new energy vehicles has risen by 7 points and solidified into a price reduction." New energy vehicles have been drastically reduced in price, but due to the current promotion of fuel vehicles has reached a certain bottom line, some price reduction models have not reached the expected price reduction effect, so the new energy 'involution' price reduction will gradually encroach on the fuel vehicle market The situation will continue. With the sharp abdication of the price reduction tide in May, the market will gradually return to the normalized competition situation of promotion increments. ”

For the outlook for the national passenger car market in June, the passenger association said that there were 19 working days in June this year, two days less than last year's 21 working days, which is not conducive to the half-year sales sprint in June. "The passenger car market has entered the half-year closing period, and the willingness of various localities and car companies to strive for sprint sales performance is very strong, and the delivery of new models is accompanied by the improvement of the system capacity of manufacturing enterprises, and the rapid release of production capacity occupies the leading opportunity, so June is still a good month for sales trends."