The price war is hard! FAW Toyota's vehicle prices have collectively plunged, how long can the joint venture car "make profits"?

Gasgoo Cars

2024-06-19 10:24Posted on the official account of Shanghai Gasgoo

Almost half a year has passed, and now it seems that the long-tail effect of BYD's "punch" on fuel vehicles at the beginning of this year has not yet ended.

Gasgoo noticed that taking advantage of the popularity of "618", some joint venture car companies took advantage of the situation to engage in "price reduction promotion".

On June 18, FAW Toyota's official Weibo announced that a 24-hour limited-time sale would be held on the same day.

Among them, the price of the compact SUV Corolla starts at 99,800 yuan, with a comprehensive discount of 30,000 yuan for a limited time, and the price of the compact car Corolla starts at 79,800 yuan, with a comprehensive discount of 43,000 yuan for a limited time.

Source: FAW Toyota Weibo

The price is refunded again and again

In other words, the Toyota Corolla, which used to be bought for about 150,000 yuan, is now only 79,800 yuan. The price has plunged by almost half.

In fact, FAW Toyota is not only cutting prices for the above two models.

It is reported that the terminal prices of FAW Toyota's RAV4 Rongfang, bZ3, bZ4X, Asia Dragon and other models have long been "unbearable", and there are different price reductions, ranging from 55,000 yuan to 70,000 yuan.

It is reported that in the Beijing area, the preferential range of RAV4 Rongfang has exceeded 60,000 yuan, and the money that used to be low-level for two-wheel drive can now be landed with four-wheel drive high.

There is no doubt that the price cuts of car companies must be related to the urgent need to boost sales. However, Gasgoo found that even though the prices of FAW Toyota's models have "retreated" repeatedly, sales still seem to be unsatisfactory.

According to the data released by the National Passenger Car Market Information Association, in May this year, FAW Toyota's retail sales were 54,650 units, a year-on-year decrease of 21.9%, ranking 11th in the manufacturer's retail sales list. From January to May this year, FAW Toyota's overall sales also declined, with cumulative retail sales of 260,500 units, a year-on-year decrease of 12.4%.

In contrast, in April this year, FAW Toyota ranked 9th in the retail sales ranking of automakers.

In addition, Corolla, as the "star model" of FAW Toyota, led the decline in retail sales. In May this year, Corolla retail sales were only 7,693 units, down 54.96% year-on-year from 17,080 units in the same period last year.

Source: FAW Toyota

Approaching the critical point of bicycle "profit and loss"?

At the end of March this year, Wang Chuanfu, chairman of BYD, threw out a rather bold forecast at the performance communication meeting after the release of the 2023 annual financial report.

He said: "At present, the new energy industry has entered the knockout round, and 2024-2026 is a decisive battle of scale, cost and technology. In the next 3-5 years, the share of joint venture brands in China's auto market will drop from 40% to 10%, of which 30% is the growth space of domestic brands. ”

As mentioned earlier, when consumers can buy a Corolla at almost half the price they previously had, it makes one wonder how much profit margins the JV has had in the past, so much so that they have been able to reduce prices so dramatically in response to market changes.

In this regard, Gasgoo analysts predicted: "From the perspective of single vehicles, the current traditional fuel vehicle joint venture car companies still have cost advantages, and it has not yet reached the point of loss, but it is estimated that it is about to reach the critical point of profit and loss, and it may be difficult to cope with the decline." ”

In addition, Gasgoo observed that for FAW Toyota, the trouble it faces is not only the problem of price reduction.

It is reported that on a domestic automobile complaint website, FAW Toyota Corolla has climbed to the second place in the complaint list in the past 30 days, and the more prominent problems are the cracking of the instrument panel, the aging of components and service-related problems.

According to the information of Cheqq.com, the 2023 Corolla has a large number of complaints about the blockage of particle traps, accounting for 86.27% of all quality problem complaints.

Judging from the relevant complaints, this problem is mainly focused on the 1.8L dual-engine model. Some car owners complained that they frequently encountered the problem of blockage of particle traps, and the solution given by FAW Toyota manufacturers was to "reduce the sensitivity of exhaust gas detection".

Coupled with the recent Toyota "counterfeiting scandal", it has once again challenged the public's brand recognition of this traditional car company.

On June 18, Gasgoo learned that it was reported that Tsuneji Sato, president of Toyota Motor Co., Ltd., apologized for the violations of automobile safety and performance testing at the annual general meeting of shareholders, admitting that it had caused concerns and troubles to customers and shareholders.

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