Pure tram sales exceed fuel vehicles, the inflection point has arrived?

Written by / Zhang Linyu

Editor/ Zhang Nan

Design / Zhao Haoran

Foshan, Guangzhou, a FAW-Volkswagen 4S store outside the city, if you do not count the non-store channel, the total amount of pure electric ID. for the first time exceeded the fuel vehicle, for this store, this may be a historic moment.

Generally speaking, in addition to the store-side car sales, 4S stores have other channels, such as wholesale of large customers. In March, the store sold 23 ID-only electric cars, 19 fuel vehicles, and 4 more electric cars than oil trucks.

Coupled with non-store-side channels, the store's fuel vehicle sales from January to March 2022 were 39, 13 and 41, and the pure electric models were 5, 3 and 23 respectively, which can be seen that fuel vehicles have risen and fallen in 3 months, while pure electric vehicles have increased sharply in March, accounting for more than 50% of sales, and the year-on-year growth rate is much higher than that of fuel vehicles.

"By April, by the 20th, ID. sales had exceeded half of the store's overall target, but the fuel car had not yet rushed up." The store's salespeople told Auto Business Review.

At another FAW-Volkswagen dealership in Foshan, the share of pure electricity sales increased from 10% in January to 30% in March.

AutoMotive Business Review also visited FAW-Volkswagen, SAIC Volkswagen and Changan Ford dealerships in Beijing, and salespeople generally reported a sharp increase in pure electric vehicle sales in March, while fuel vehicles remained unchanged or declined.

Among them, SAIC Volkswagen Beijing dealership, tram sales showed a continuous upward trend, pure electricity and fuel vehicles single month sales ratio of about 1:3 overall, the person in charge said that the second half of the year is expected to reach 1:2.5.

From the overall perspective of the market, pure electric models have been at the top of the list of subdivided models. The Tesla Model Y replaced the previous overlord Great Wall Haval H6 as the single-month sales title of the SUV in March; the Hongguang MINIEV replaced Changsheng General Xuanyi, ranking first in the sedan list.

In addition, it is worth mentioning that in March, the total sales of fuel vehicles faw-Volkswagen were 126,000 units, while the total sales of new energy champion BYD were 104,000 units, and the gap between the two was shortened to 22,000 units.

As a major consumer province of new energy models, in addition to climate reasons, Guangdong's high subsidy policy is also one of the reasons for driving demand. The sales manager of the Foshan 4S store told Auto Business Review that it is not only they who are catching up with the sales of fuel vehicles with pure electric models, but also other distribution stores in the surrounding area.

Why are Foshan's trams so good?

"Guangdong Province itself has a subsidy of 8,000 yuan for new energy models priced at less than 250,000 yuan." There is also a replacement subsidy in Foshan, up to 12,000 yuan, if not replaced, there is also a subsidy of 10,000 yuan, and the two subsidies add up to a maximum of 20,000 yuan. The sales manager of the Foshan dealership told auto business review reporters.

However, on April 1, the Foshan Municipal Bureau of Commerce issued a new supplementary notice to advance the deadline for new energy vehicle sales subsidies from the original August 31, 2022 to April 30. This is also one of the reasons for the sharp increase in sales of new energy vehicles in Foshan stores in March.

In addition to local subsidies, FAW-Volkswagen also provides many preferential policies.

In general, manufacturer subsidies plus local government subsidies, consumers buy an ID. At least 30,000 to 40,000 yuan, some even more than 40,000 yuan.

Foshan is not a purchase restriction city, theoretically, the sales of new energy vehicles lack of motivation, but under the continuous support of policies and manufacturers' publicity and preferential efforts, coupled with the current rise in oil prices, local residents' willingness to consume new energy vehicles is significantly high.

"The city is small, and the southern climate does not have to worry too much about the problem of endurance, and the cost of driving a tram in a city like Foshan is very low." An auto industry veteran said.

In March, an analysis report on the Foshan New Energy Vehicle Questionnaire released by a local think tank in Foshan showed that nearly 90% of respondents were willing to buy new energy vehicles.

Statistics show that in 2021, Foshan's new energy vehicle sales will be 33,700 units, an increase of 357% year-on-year, ranking fifth in the country.

Adjustment of the mass agency model

North-South Volkswagen's total sales of ID in China in the first quarter were 27,100 units, an increase of more than 60% year-on-year. The growth trend of ID sales in Foshan and 4 dealerships in Beijing also confirms this data.

The importance of the Chinese market to the Volkswagen Group is self-evident. Last year's pure electric model was unfavorable, north and south Volkswagen's ID. just listed for 1 month, the total sales of less than 3,000 vehicles, the whole year is only 70,000 vehicles, which is slightly different from the minimum annual sales target of 80,000 vehicles set by the German headquarters.

At the end of 2021, Stephen Woellenstein, CEO of Volkswagen China, abruptly dropped out of class, and many people speculated that this was related to the sluggish sales of ID. In order to push up sales, this year, the north and south volkswagen began to cross the sea, the original agency system model has been loosened, but also adjusted, in fact, the initial results.

The earliest FAW-Volkswagen and SAIC Volkswagen launched the agency system model, mainly refers to the manufacturer's unified market price, do not give dealers a warehouse, do not batch sales, complete order system, consumers pay for the car directly into the manufacturer, similar to the manufacturer's direct sales model. Dealers only need to cooperate with users to see the car offline, do a good job in service experience and deliver the car in the later stage, and the final income is the commission of the transaction vehicle.

North and South Volkswagen soon discovered that this approach made the dealership lose its initiative. The person in charge of a SAIC Volkswagen dealership in Beijing told auto business reviews that after 2 months of operation, the manufacturer and dealer eventually returned to the original batch sales model, but the person in charge said that it is not exactly a batch sale now, the manufacturer no longer gives the batch sales target, if the dealer wants to prepare more inventory cars, they can voluntarily buy. Consumers pay the dealership in the adjusted model, which means that the dealer has a lot of room to play.

The adjustment of the agency system returns autonomy to the terminal store. From price and subsidies to the distribution of incentives to salespeople, they can adjust the proportion and magnitude according to their own situation, but on the other hand, it seems to have re-triggered the price war.

After the adjustment of the agency system, the total sales of ID. in China gradually improved, and the Foshan store was one of the representatives.

From the perspective of the general environment of the automobile market, subsidies have declined, coupled with the general price increase of models, many people are worried about whether the sales of new energy vehicles can continue to grow.

It can be predicted that car manufacturers, especially international car companies like Volkswagen Group, which are determined to conquer the Chinese market, will increase subsidies, and the insurance subsidies of the new ID.4 and ID.6 have been at least 3,000 yuan higher than the old ones, but it is interesting that the prices of the new ID.4 and ID.6 have risen by 5400 yuan.

This article was originally produced by Automotive Business Review

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