BMW X1 as low as 160,000! The price war in the 618 car market has heated up again, and 136 models have been reduced in price from January to May

Times Finance

2024-06-18 19:32Posted on the official account of Guangdong Times Finance

Source of this article: Times Finance Author: He Qing

In 2024, the price war is still not "extinguished".

The topic of "BMW's half-cut price cut" that has been hotly discussed on the Internet has not cooled down, and new promotions have been released. "The 618 preferential car purchase campaign began, and the BMW X1 was as low as 160,000 yuan. After the comprehensive discount, the BMW 2 Series and iX1 are as low as 170,000 yuan. Discounts are available for all car models. A BMW sales in Guangzhou said to Times Finance. For reference, the guide price of the BMW X1 starts at 288,900 yuan.

Image source: BMW

Not only luxury brands have lowered their status, from independent to joint ventures, from new energy vehicles to fuel vehicles, the price war is full of smoke, discounts are gradually expanding, and there are more and more models with price reductions...... According to the statistics of Cui Dongshu, secretary general of the passenger association, from January to May this year, 136 models have been reduced in price, and the scale of price reduction has exceeded 9% in the whole year of 2023 and the total scale of price reduction in 2022.

Under the vigorous price war, the auto market is showing two days of ice and fire.

According to the national passenger car market data released by the Passenger Car Association in May, the retail sales of the national passenger car market in May were 1.71 million units, a year-on-year decrease of 1.9%. Among them, the retail sales of new energy vehicles in May were 804,000 units, an increase of 38.5% year-on-year and 18.7% month-on-month. In contrast, the retail sales of conventional fuel vehicles in May were 910,000 units, a year-on-year decrease of 23%. From January to May, the retail sales of conventional fuel vehicles were 4.82 million, a year-on-year decrease of 9%.

The 618 price war heats up again

The price war is still ongoing, and the competition pattern of the auto market is quite interesting.

Specifically, in May, the retail sales of self-owned brand passenger cars reached 980,000 units, an increase of 12% year-on-year and month-on-month, and the retail share of the month reached 57.6%, a year-on-year increase of 7.3 percentage points. From January to May this year, the cumulative retail share of own-brand passenger cars was 56%, an increase of 6.6 percentage points compared with the same period last year.

On the other hand, the sales of mainstream joint venture brands and luxury car markets both decreased year-on-year and increased month-on-month. Among them, the retail sales of mainstream joint venture brands in May were 490,000 units, a year-on-year decrease of 21% and a month-on-month increase of 8%; Retail sales of luxury cars were 240,000 units, down 3% year-on-year and up 19% month-on-month.

From the perspective of the top 10 brands in terms of sales, the retail sales of chivalrous passenger cars of the joint venture brand declined significantly, with FAW-Volkswagen and SAIC Volkswagen falling 17.5% and 11.9% year-on-year respectively, GAC Toyota falling 10.2%, and FAW Toyota falling out of the top 10 in May.

Image source: Passenger Association

The loss of market share has led to further price offensives among mainstream joint venture brands and luxury brands. In terms of mainstream joint venture brands, GAC Honda and GAC Toyota, both subsidiaries of GAC Group, have launched "618" preferential activities. Among them, Guangqi Honda Zhizai offers a discount of 60,000 yuan, as low as 99,800 yuan, GAC Toyota Highlander offers a discount of 50,000 yuan, as low as 217,800 yuan, and the ninth-generation Camry Shuangqing offers a discount of 30,000 yuan, as low as 149,800 yuan.

FAW-Volkswagen Lanjing and Lancun launched the public model in June, and the guide price of the whole series was as high as 43,000 yuan, with the Lancun public sharing model starting at 242,900 yuan and the Lanjing public enjoying model starting at 261,900 yuan. FAW Toyota is playing the slogan of "618 trade-in, a good time to buy the bottom", and can enjoy a replacement subsidy of up to 23,000 yuan. FAW Toyota Corolla has a limited-time comprehensive discount of 43,000 yuan, and only sells from 79,800 yuan.

Luxury brands are also in close combat. A BMW salesman in Guangzhou told Times Finance, "BMW X1 is as low as 160,000 yuan. After the comprehensive discount, the BMW 2 Series and iX1 are as low as 170,000 yuan. Discounts are available for all car models. A BMW salesperson in Shenzhen also told Times Finance, "The X1 with a starting price of 288,900 yuan is currently priced at about 160,000 yuan, and the landing price is about 180,000 yuan." The iX1 landed about 170,000 yuan. ”

According to the Chedi, the guide price of BMW X1 is 288,900-349,900 yuan, and the dealer quotation is 173,900-234,900 yuan, the guide price of BMW iX1 is 299,900-339,900 yuan, and the dealer quotation is 178,000-201,000 yuan, and the guide price of BMW 2 Series is 272,900-419,800 yuan, and its dealer quotation is 177,900-389,800 yuan. In addition, the Mercedes-Benz C-class with a guide price of 334,800 yuan will be discounted by 100,000 yuan from 234,800 yuan. The discount margin of Audi A6L exceeds 100,000 yuan.

On the other hand, independent new energy brands are still pursuing greater sales growth. GAC Aion launched an AION Y limited-time discount in "618", and Aion AION Y superimposed various policy discounts of 25,000 yuan, as low as 99,800 yuan. Li Auto launched the "618" limited-time car purchase gift, including a limited-time car purchase right worth 10,000 yuan.

"From the perspective of the pace of price reduction, the price reduction in 2023 is generally relatively balanced, but the price reduction in 2024 has reached a super level in March and April, with 29 models cutting prices in February, 49 models cutting prices in March, and 54 models cutting prices in April, and the number of models with price reductions from February to April is also an astonishing level relative to history." Cui Dongshu said.

According to the data released by Cui Dongshu, from January to May this year, 136 models have been reduced in price, and the scale of price reduction has reached 9% of the whole year of 2023, exceeding the total scale of price reduction in 2022. It also pointed out that the autonomy of new energy vehicles and new forces basically did not reduce prices in May, and the price reductions of fuel vehicles will follow up. The squeezing effect of new energy vehicles is fully reflected.

When will the "involution" be closed?

"Recently, I noticed that everyone paid attention to profits and put profits first, but now they have entered the stage of survival of the fittest, and the market share has become the first, which is not particularly wrong, but companies have thrown away profits to maintain market share, which is not sustainable." Shen Jinjun, president of the China Automobile Dealers Association, recently said at the 16th China Automobile Blue Book Forum.

Looking at the financial reports of various car companies in the first quarter of 2024, the net profits of traditional automakers such as SAIC Group, Guangzhou Automobile Group, and Changan Automobile all declined.

In the first quarter, SAIC's total revenue was 143.072 billion yuan, down 1.95% year-on-year, and the net profit attributable to shareholders of listed companies (hereinafter referred to as "net profit attributable to the parent company") was 2.714 billion yuan, down 2.48% year-on-year.

GAC Group achieved operating income of about 21.346 billion yuan, a year-on-year decrease of 19.12%; The net profit attributable to the parent company was about 1.220 billion yuan, a year-on-year decrease of 20.65%.

Changan Automobile achieved a total operating income of 37.023 billion yuan, a year-on-year increase of 7.14%; The net profit attributable to the parent company was 1.158 billion yuan, a year-on-year decrease of 83.39%.

On the other hand, BYD achieved revenue of 124.944 billion yuan in the first quarter, a year-on-year increase of 3.97%; The net profit attributable to the parent company was 4.569 billion yuan, a year-on-year increase of 10.62%.

In the first quarter of this year, Cialis achieved a positive net profit. Its revenue in the first quarter was 26.561 billion yuan, a year-on-year increase of 421.76%; The net profit attributable to the parent company was 220 million yuan.

In the context of the price war, the profits of many car companies are showing a downward trend, and where will the auto market go in the future? At the 2024 China Automobile Chongqing Forum in early June, the top leaders and executives of the car circle debated the "involution" of the market, and they had different opinions.

Zhu Huarong, chairman of Changan Automobile, said that volume is the normal process of good money driving out bad money, and it is the best way to let the industry quickly return to healthy competition.

Li Shufu, chairman of Geely Holding Group, said that the healthy development of any industry must be manifested in the input-output ratio to achieve better economic benefits, endless involution, simple and crude price wars, the result of which is to cut corners, counterfeit sales, non-compliant disorderly competition.

It is worth mentioning that the share of fuel vehicles is gradually losing in the involution. In May this year, the retail sales of conventional fuel vehicles were 910,000, a year-on-year decrease of 23%. From January to May, the retail sales of conventional fuel vehicles were 4.82 million, a year-on-year decrease of 9%, and in this context, the industry has recently discussed more about the "equal rights of oil and electricity".

"We have always suggested that oil and electricity have the same rights, and the industry environment will gradually return to a fair environment of reasonable competition." Cui Dongshu said: "With the ultra-rapid development of China's new energy vehicle penetration rate, which has reached a penetration rate of about 50%, the society needs to consider establishing a reasonable competitive environment with the same rights of oil and electricity. ”

Cui Dongshu further said that the current development of the automotive industry is the transformation of old and new production momentum. The current competition is not a simple low-level volume, but a necessary stage of great industrial change. Enterprises are the most effective combination of social competition, so the competitiveness of enterprises is extremely important. Enterprises should be involved, but also to ensure the reasonable rights and interests of employees.

Yang Jing, director of Fitch Ratings' Asia Pacific Corporate Ratings, believes that in the Chinese market, the replacement of fuel vehicles by new energy vehicles has become an inevitable trend. In the early years, the advantages of fuel vehicles over new energy vehicles (pure electric) mainly lay in price and convenience of energy replenishment. However, with the rapid development of China's plug-in hybrid and extended-range hybrid technologies in the past two years, the product strength has improved, the market acceptance has increased, and the policy has maintained a supportive attitude towards such technical routes, and the Chinese auto market will accelerate electrification driven by these two intermediate technology routes. If there is no significant improvement in the intelligence and cost performance of the fuel vehicles of the joint venture brand, they will continue to be directly impacted by new energy vehicles in the next 1-2 years.

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