The auto market in 2024 will start with a vigorous price war, and when the hands of the clock are drawn to June, even if the chess is in the middle of the game, the "involution" continues. Although the price war is a normal phenomenon in the early stage of the development of the new energy vehicle industry, which helps the good money to drive out the bad money, is it really beneficial to the development of the industry to blindly fight the price war and excessively fight the price war? Probably not. Behind the difficult upward sales curve, negative impacts such as backstabbing initial users, damage to brand reputation, reduced residual value of used cars, and rising cost of car ownership are also secretly breeding.
In the second half of the high-quality competition, consumers' views on the price war are becoming more and more rational, and the enthusiasm for following the trend of price reduction and impulsive car purchase is gradually receding, and the contestants must escalate from the price war to the value war, from focusing on short-term interests to pursuing long-termism, and pursuing a win-win situation between enterprise benefits and user experience. Recently, SAIC Volkswagen has played a set of value-preserving repurchase "combination punches" based on the same rights of oil and electricity, creating a classic example for car companies to deepen their cultivation in the second half.
The value retention rate is leading the industry, and users have a "bottom" in their hearts
Affected by various factors such as battery life, technology iteration, infrastructure, and ownership, the value retention rate of new energy vehicles is not as stable as that of fuel vehicles. On this basis, the tide of price reduction once again makes users fall into the gains and losses of car price fluctuations, and the value retention rate of new energy vehicles has been upgraded to a major slot in the development process of new energy vehicles.
According to the latest "May 2024 China Automobile Retention Rate Report" released by the Circulation Association and Jingzhen Valuation, the three-year value retention rate of pure electric models is about 53%, of which the model with the highest value retention rate is the Porsche Taycan, but it is only 62.4%, which is not only a large gap compared with fuel vehicles of the same level, but also shows a downward trend month by month.
In order to solve this pain point, in April this year, SAIC Volkswagen launched the ID.Care value preservation policy, and its star models ID.3, ID.4 X and ID.6 X can enjoy the manufacturer's official 6% discount repurchase for 3 years, with a value retention rate of 7 percentage points ahead of the industry average, comparable to the Porsche Taycan, greatly reducing the cost of car ownership for users, and "supporting the bottom" for users who buy new energy vehicles.
"When the market share of new energy vehicles and pure electric vehicles reaches 50%, it is recommended that government departments study the 'same rights of oil and electricity'." At the Chongqing Auto Show on June 6, the chairman of an automobile group openly made such an appeal. For example, as early as the end of 2023, Cui Dongshu, secretary general of the passenger association, suggested that fuel vehicle users should also enjoy the same rights as new energy vehicle users.
In the early stage of the development of new energy vehicles, in order to support the development of new energy vehicles, the state has set up a lot of preferential policies. However, with the intensification of competition in the new energy vehicle market, how to improve the happiness of fuel vehicle users and stabilize the base of fuel vehicles has also become an important matter hanging in the minds of car companies.
SAIC Volkswagen also has an insight into this trend, and in May, the Tiguan L Pro launched a time-limited purchase tax exemption and a 3-year 20% hedging repurchase policy, which is converted into the cost of owning a car and only spending a cup of coffee a day. According to the latest data from the China Association of Automobile Manufacturers, the average value retention rate of mid-size SUVs in May 2024 is around 56%, with the Tiguan L Pro leading by 24 percentage points.
In fact, SAIC Volkswagen is not the only car company that has launched a hedging repurchase policy, but compared with the implied conditions of other car companies that often have five or six articles, SAIC Volkswagen's hedging policy has no routine, and only puts forward two key points: one is that the annual mileage is less than 30,000 kilometers; The second is that the cumulative claim for 3 years does not exceed 30% of the car price. According to relevant statistics, among all car users, only 5% of the population drives more than 30,000 kilometers per year, and only 1% of users have a cumulative insurance loss amount of more than 30% of the new car insurance amount in 3 years, which also means that SAIC Volkswagen's 3-year 20% discount hedging repurchase policy has taken care of at least more than 95% of users.
Facts have proved that SAIC Volkswagen's sincerity has also received positive feedback from the terminal. It is understood that since the first launch of the hedging repurchase policy on Lingdu in 2020, no user complaints have been received so far.
Lock in the "mass" market and practice long-termism with strength
SAIC Volkswagen's "combination punch" of oil and electricity hedging repurchase can be described as killing two birds with one stone: through the repurchase price much higher than the industry standard and concise and clear repurchase conditions, it avoids the negative impact of the price reduction tide on the hedging rate, reduces the cost of car ownership, and protects the interests of users; At the same time, it also takes into account the needs of high-frequency iteration of technology, so that users will not be troubled by the outdated car they just bought, but fully enjoy the dividends of the latest technology application in the new automobile era through the update frequency of every three years.
Frankly speaking, the launch of this series of hedging repurchase policies, in addition to benefiting the "public heart" of users, SAIC Volkswagen also has its own "selfishness": I hope to continue to lock in "Volkswagen" users, and repurchase SAIC Volkswagen's models again after three years, bringing predictable increments to itself.
However, not all car companies have such confidence and confidence, and SAIC Volkswagen can have such a decisive force, which comes from its brand appeal in the Chinese market, the strategic determination of both shareholders, and the market courage of oil and electricity to advance together, oil and electricity with the same intelligence, and oil and electricity with the same rights.
As one of the first joint venture car companies to enter the Chinese market, SAIC Volkswagen, which is not confused, is not aging, but is increasingly vibrant. Based on the cumulative production and sales of 27 million units, SAIC Volkswagen is enjoying the fun of the joint venture 2.0 era from the "waltz" played by both shareholders.
In a previous interview, Jia Jianxu, general manager of SAIC Volkswagen Automotive Co., Ltd., mentioned that unlike the previous decades, when China passively accepted "gifts" from foreign parties, the dominance is shifting, and the German side has fully understood the importance of China's auto market, and the two shareholders have transformed into a competition and cooperation relationship of common support: "Everyone will jointly open their own 'arsenals', and put the best products and technologies into the country, and even feed back to foreign countries." ”
While most other car companies are hesitant to transform into new energy, SAIC Volkswagen has strengthened its determination to develop new energy and creatively put forward the strategic concept of advancing oil and electricity together. In 2024, SAIC Volkswagen plans to bring the Tiguan L Pro and Passat Pro to the market, and is committed to starting with these two new cars, breaking the cognitive misunderstanding of "decoupling oil vehicles and intelligence", and making up for the intelligent shortcomings of joint venture brands and fuel vehicles for electric vehicles.
In the long run, in SAIC Volkswagen's plan, there will be new product iterations every year in the next three years, whether it is gasoline vehicles, hybrids, or electric models. Three years later, SAIC Volkswagen will complete the product structure of one-third electric vehicles, one-third hybrid vehicles, and one-third gasoline vehicles.
Just a few days ago, SAIC Volkswagen had another good news: the cumulative sales from January to May were 430,000 units, an increase of 5.6% year-on-year; The cumulative sales of new energy vehicles were nearly 50,000 units, doubling year-on-year, leading the joint venture pure electric camp; Fuel models also soared, with Passat sales exceeding 18,000 units in May, a year-on-year increase of 232%, and the Tiguan family selling nearly 14,000 units in May, up 18% year-on-year, outperforming the market in the involution market.
Reporter's Notes
History has proven that the essence of business is always long-termism, and great enterprises always need to go through the baptism of practice.
Under the unprecedented wave of change, it is not easy for traditional car companies with stable chassis and large fundamentals to "turn around", every decision and every step is related to life, and the current strategic upgrade is testing SAIC Volkswagen's adherence to long-termism and deep understanding of China's auto market.
For the current SAIC Volkswagen, stability is more important than winning, endurance is more important than explosiveness, rather than following the crowd and becoming a follower of the price war, it is better to bind users and become the ultimate player in the value war. Under a series of adjustments, it is expected that SAIC Volkswagen will have more bright spots in the future.