In 2023, the total output value of China's automobile industry has reached 11 trillion yuan, accounting for nearly 10% of the country's GDP, surpassing real estate for the first time and becoming China's first economic pillar industry. But behind this set of bright figures, there is an increasingly serious industry involution, and an endless "price war"!
Should the auto market be involuted? The bigwigs of car companies have torn their faces
Since Tesla fired the first shot of the "price war" in 2023, it has been out of control. Many car companies are under pressure and have begun to follow up with price cuts. In 2024, BYD will launch 79,800 Qin plus and 99,800 Qin L in a row, completely realizing the "same price of oil and electricity", and pushing the "price war" to another peak! Should the auto market be involuted, and should the "price war" continue? The bigwigs of car companies have different attitudes!
China Automotive Chongqing Forum
At the annual China Automobile Chongqing Forum, the CEOs of major car companies spoke sharply, obviously without a word of swearing, but every word seemed to be pointing at the nose and scolding, allowing the audience to experience a language art!
Opposition: Represented by Zeng Qinghong, chairman of GAC Group, they oppose the continued involution of the auto market and the bottomless price war. Zeng Qinghong said at the conference: "GAC is not against price wars, nor is it afraid of price wars, but it must be rational and have a bottom line, and cannot be excessive", "It is okay to make profits, but it is not sustainable to make profits", "When pure electric vehicles account for 50% of vehicle sales,"
Li Shufu, chairman of Geely Holding Group, believes that transparent and fair competition is a good thing, and vice versa. "China's auto industry has the world's largest degree of involution, and the price war is higher than the wave, which is also unparalleled in the world, which is both a good thing and a bad thing.
Supporters: Represented by BYD and Changan, they support the involution of car companies and believe that car companies should be rolled up to the end. Wang Chuanfu, chairman of BYD, said: "Why is the decline in the cost of battery raw materials not reflected in the pricing of products? I think it's immoral to consumers. ”、“”
Neutral: There is also a group of CEOs who choose to be with the mud, and both NIO and Ideal talked about the importance of cooperation: "Volume is normal, it is the inevitable result of market competition, but don't forget to cooperate." "China's auto industry is prosperous, and in the end, it is impossible to leave only one or two, and it must be a collective success." ”
The pros and cons of the involution of the car market
There are pros and cons to the involution of the auto market, and the "price war" is intensifying, and there are some potential risks while promoting the survival of the fittest of car companies.
Pros: 1. The biggest beneficiary of the involution of the car market is the consumer. The more car companies are involved, the louder the "price war" is fought, and the more benefits consumers can get. With the advent of the era of "the same price of oil and electricity", the prices of a large number of joint venture brands such as the Nissan Sylphy of 69,800 and the Toyota Corolla of 79,800 have plunged, and consumers have received more choices and greater discounts. This would have been unthinkable five years ago.
2. It can promote the scientific and technological innovation and industrial upgrading of car enterprises. Fierce industry competition can accelerate the innovation and upgrading of car companies and promote the improvement of products and services.
3. Speed up the market reshuffle, and good money drives out bad money. "If you can keep up, you can withdraw, if you can't keep up", the involution of the auto market will accelerate the market reshuffle and accelerate the survival of the fittest of car companies.
Disadvantages: 1. Car companies compress profits and cut corners to reduce costs. The automobile industry is quite mature, and in addition to brand value, profit margins have been compressed very little. Fighting a "price war" without emphasizing martial arts can only work hard to save costs, and "cutting corners" and "shoddy" have become the most effective way for some unscrupulous car companies to reduce costs.
2. Cause overcapacity and waste of resources. In order to seize market share, car companies will "cast a wide net" and continue to increase the style and number of models, resulting in overcapacity and a sharp increase in inventory pressure. As a result, a large number of new cars have become "zombie cars", resulting in a waste of resources.
summary
The "price war" is the catalyst for the reshuffle of the auto market. The auto market can be rolled, which can not only speed up the survival of the fittest, but also promote the launch of some high-quality products. But I'm afraid that the road will be crooked! For the automobile industry, healthy competition in accordance with the law is very important, and only healthy competition in accordance with the law can achieve sustainable and high-quality development.