The automobile price war has brought about industry reshuffle

时间：2023-4-23 14:28:17 发布者：管理员

Since the beginning of this year, the automotive industry has ushered in the largest price war in history, which has sparked a wait-and-see sentiment in the market. According to the latest retail sales data from the Automotive Market Research Branch of the China Association of Automobile Manufacturers (CAAM), from January to March, the cumulative sales of narrow passenger cars in China reached 4.262 million units, a year-on-year decrease of 13.4%. At the same time, the price war has also made the unprofitable new forces of car manufacturing even more uncomfortable.
A reshuffle in the automotive industry is slowly unfolding, and the automotive industry is looking around in confusion for direction.
Price war leads to industry reshuffle
The beginning of this round of car price war comes from Tesla. This giant car company announced a significant global price reduction in January of this year.
Subsequently, BYD (002594) (002594. SZ) released a new model for its main sales model, Qin, with an entry-level price lowered to within 100000 yuan, in order to gain more market share.
At the beginning of March this year, all brands under Dongfeng Motor (600006) Group launched a limited time subsidy policy, shifting the price war from the new energy vehicle market to the entire automotive market, and allowing most car companies to maintain market share through "price for quantity".
Being in the wilderness of automotive marketing, I witnessed this unprecedented 'price frenzy'.
At first, the company did not intend to participate in the price reduction, but with the price reduction of competitors, the sales of stores significantly declined, and customer flow also began to sharply decrease. "Kono recalled the scene in early March.
Faced with such pressure, wilderness is also very anxious and keeps communicating with the company headquarters, hoping to strive for more discounts to resist the decline in sales.
After sales decline, the market's voice decreases, which can easily lead to a vicious cycle, making it even harder to buy cars, "said Kuano. The car company where the wilderness is located has even launched a regional marketing policy with a maximum discount of 130000 yuan, hoping to maintain its position in the regional market.
However, the 'price frenzy' did not bring a boost to sales, but instead pulled down sales data. Everyone is buying up instead of buying down, "said wilderness.
According to the analysis of the Passenger Car Association, retail sales in March were weak, reaching 1.59 million units, which was flat on a year-on-year basis. This was the result of a combination of factors such as weak consumption and increased wait-and-see atmosphere caused by market price chaos.
Behind the price war, for car companies with larger profit margins, the loss is profit. But for many unprofitable new forces in car manufacturing, they face greater pressure.
According to the 2022 annual report disclosed by the three major new car manufacturers, NIO Motors (9866. HK) achieved a total revenue of 49.27 billion yuan for the year, an increase of 36.3% year-on-year; Xiaopeng Automobile (9868. HK) had a total annual revenue of 26.86 billion yuan, a year-on-year increase of 27.9%; Ideal Automobile (2015. HK) had a headquarters revenue of 45.29 billion yuan for the year, a year-on-year increase of 67.7%.
Although the revenue of the aforementioned new forces in car manufacturing has increased, there is a phenomenon of selling more and losing more.
According to the annual report, NIO Automobile's net loss for the entire year of 2022 reached 14.437 billion yuan, a year-on-year increase of 259%; Xiaopeng Automobile's net loss for the entire year of 2022 reached 9.14 billion yuan, an increase of 88.1% year-on-year; Ideal Automobile's net loss for the entire year of 2022 reached 2.03 billion, an increase of 1313% year-on-year.
The new force of car manufacturing is facing a difficult situation.
To maintain sales, it is necessary to participate in this round of price war, and there may be even greater losses; Without participating in this price war, it may be difficult to maintain sales.
As Li Xiang, the chairman and CEO of Ideal Automobile, said, whether a price war can bring sales may not be certain, but it will definitely hit competitors.
Where is the way ahead?
The competition in the automotive industry has made every car company and individual face a choice.
One morning in April, several Autobots from Anting, Shanghai were driving together to work. As they chatted, they were surprised to find that everyone was both confused about the future and looking out for new opportunities.
The field I am responsible for was highly valued by the company last year, but this year the wind has started to change. After all, it is a place where money needs to be burned, and whether this business should be done this year has been a matter of internal controversy. "Chen Qiang, a middle-level member of a leading car making new force, told Times Finance.
Chen Qiang had previously worked in the field of the internet, and in the past few years, many new car making forces had hoped to use the internet to change traditional car making, so they recruited a large number of employees from this field.
Starting this year, the company where Chen Qiang works has quietly begun to shrink its internal business lines. Due to the fact that Chen Qiang's business is still in the "burning money" stage, it is inevitable that it cannot be spared.
The good situation is that if I merge with other departments, my team may dissolve on the spot. The bad situation, including myself, may face unemployment, "Chen Qiang told Times Finance.
In fact, some details have long made many automotive professionals working in the new forces of car manufacturing feel the changes in the industry.
Many teams do not have recruitment staffing at all, but HR is still sending out recruitment needs to create a false prosperity. Our department's interns also do not have the opportunity to retain them, but they do not tell them, hoping to find cheaper labor. "A middle-level car making new force working in Caohejing, Shanghai told Times Finance.
Last year, Yu Wenting, who left a new energy vehicle brand, also felt the changes in the industry and the discomfort caused by some "foam".
There is not enough collaboration among various departments, and the annual sales orders even have some moisture. The company also requires employees to find ways to place orders with friends first, but it's really not feasible to just return them, "Yu Wenting told Times Finance.
The new energy vehicle brand she belongs to was once favored by the market and received investment from many industry giants. However, due to the slow entry speed of the product into the market and the delay, coupled with the poor sales of the product in the early stage of the market, she is not optimistic about the company's prospects.
Where is the road? Who can win in this shuffle? This has become a question that many car enthusiasts are thinking about in their hearts.
Cui Dongshu, Secretary General of the China Passenger Transport Association, said that the price war will continue, and companies with small sales, low scale, and poor technology are easily eliminated.
In addition, over the past year, new energy vehicles have made great strides, expanded production capacity, and also increased overall inventory.
According to data from the China Automobile Association, last year China's production and sales of new energy (600617) vehicles completed 7.058 million and 6.887 million respectively. However, according to the statistics of the Ministry of Public Security, in 2022, only 5.35 million new energy vehicles were newly registered nationwide, which is a gap of 1.708 million compared to last year's production. Excluding the 679000 vehicles exported that year, there is also a gap of nearly 1.03 million vehicles in the middle.
Pressing on distributors is a common pattern in the industry, which is equivalent to overdrawing next year's sales ahead of schedule, "Kuano told Times Finance.

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