Since BYD launched the first shot of the "Glorious Edition" of the the Year of the Loong, the "price war" in the car market has spread to the middle of March. According to incomplete statistics, as of now, more than 60 car models from over 20 brands have joined the battle, including traditional fuel vehicle brands.
On March 14th, NIO adjusted the pricing system for BaaS battery rental services. After adjustment, purchasing a standard battery pack and using BaaS will result in a sudden reduction of 70000 yuan in the vehicle price and a monthly service fee of 728 yuan; Purchasing a long-term battery pack using BaaS method will result in a reduction of 128000 yuan in the overall vehicle price and a monthly service fee of 1128 yuan. Prior to this, the service fees for the above two items were 980 yuan and 1680 yuan respectively, a decrease of 2532%.
The industry generally believes that this move may seem like an adjustment to the pricing system of battery rental services, but it is actually a disguised price reduction by NIO in response to the increasingly fierce price war in the automotive market. "Although our original intention was not to lower prices, in today's market environment, this adjustment is very cost-effective for new car users," said Li Bin, founder, chairman, and CEO of NIO.
On the same day, as one of the three major independent passenger car brands of Dongfeng, Dongfeng Yipai brought its first model, the "e π 007", and the strategy of "offering discounts as soon as it is launched" received much attention. Dongfeng Yipai stated that from March 14th to April 30th, the e π 007 pure electric version will receive a limited time cash discount of 30000 yuan. Users who have already placed orders before March 14th can choose not to use the large order benefits released on February 14th, but to choose the new benefit plan released on March 14th and enjoy the insurance benefits.
Another independent brand under Dongfeng Motors, Lantu, recently launched a "luxury subsidy" policy, offering a limited time replacement subsidy of 1 billion yuan in March. Among them, the new Lantu Dreamer, new Lantu FREE, and Lantu Chasing Light will receive maximum replacement subsidies of 30000 yuan, 20000 yuan, and 50000 yuan, respectively.
Lantu's move is undoubtedly in response to the call of the country's "trade in" policy. On March 13th, the State Council issued the Action Plan for Promoting Large scale Equipment Renewal and Consumer Goods Exchange. Carry out the trade in of old cars, increase policy support, unblock circulation bottlenecks, and promote the consumption of cars in a tiered and updated manner. Recently, the reporter learned from multiple industry insiders that the policy details for the implementation methods and standards of the car trade in action plan are being formulated. If progress is smooth, it is expected to be introduced in the second quarter.
Independent brands are taking the initiative, while joint venture brands are also making every effort to follow up. According to the latest purchase policy of FAW Volkswagen, all models in the series can enjoy up to 21000 yuan in exchange subsidies, up to 5 years with zero interest rates, and up to 100% commercial insurance subsidies; Changan Mazda has shouted the slogan "oil is stronger than electricity", and after adding car purchase coupons, the starting prices of Mazda 3 Axela and Mazda CX-5 are as low as 59900 yuan and 95800 yuan respectively.
From the perspective of the terminal situation in the automotive market, sales in mid to early March have increased compared to the same period last year. The latest data from the China Association of Automobile Manufacturers shows that from March 1st to 10th, the retail sales of passenger cars in the market reached 355000 units, an increase of 4% year-on-year and a decrease of 4% year-on-year. Since the beginning of this year, the cumulative retail sales have reached 3.497 million units, an increase of 16% year-on-year; The retail sales of new energy vehicles in the market reached 154000 units, a year-on-year increase of 39% and a year-on-year increase of 64%. Since the beginning of this year, the cumulative retail sales have reached 1.214 million units, a year-on-year increase of 38%.
Against the backdrop of the accelerated implementation of the "old for new" policy, Cui Dongshu, Secretary General of the China Association of Automobile Manufacturers, stated that the recent implementation of the "old for new" incentive policy in Shanghai and other regions has a good promoting effect on guiding consumption. "The policy of 'exchanging old for new' is a complex task, and its implementation requires a certain period of time. In the past two months, the car market still needs to pay attention to the increment brought by regional incentive policies such as' exchanging old for new '."
"Although some car companies' continuous price cuts have caused a serious short-term wait-and-see phenomenon, the price reduction cycle is finally about to be completed, so the market is gradually recovering. Looking ahead to the first quarter, Cui Dongshu believes that due to the new round of price cuts after the holiday, there will be a certain increase in customer orders, which will provide some guarantee for the transaction volume in March.". It is expected that sales in the first quarter will achieve double-digit growth year-on-year.
However, a latest research report from global management consulting firm McKinsey shows that although price wars are intensifying, their direct impact on consumers is limited, with 80% of consumers saying that price wars have not had a positive impact on their car purchase decisions. "Although price wars have brought stimulus to the Chinese car market as a whole, their magnitude is extremely small. In addition, more than 80% of respondents hold 'neutral' and 'negative' views, meaning that the majority of respondents do not believe that price wars have had a positive impact on their car purchase decisions, which undoubtedly indicates that the overall effect of price wars is extremely limited." McKinsey stated in the report.