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On April 22nd, Ideal Automobile announced that the 2024 Ideal L7, Ideal L8, Ideal L9, and Ideal MEGA models will adopt a new pricing system from now on. New ordering users and those who have already ordered but not yet delivered can enjoy the new prices. At the same time, Ideal Automobile will provide cash feedback to the owners of the 2024 Ideal L7, Ideal L8, Ideal L9, and Ideal MEGA who have already picked up their vehicles.
Compared to the previous selling prices, the prices of these four products have all been lowered. Among them, the Ideal L9 series has been reduced by 20000 yuan, the prices of L7 and L8 have been reduced by 18000-2000 yuan, and the prices of MEGA have been reduced by 30000 yuan to 529800 yuan.
The 2024 L7, L8, L9, and MEGA models were launched on March 1st of this year. Shortly thereafter, Ideal Automobile announced an adjustment to the naming of the 2024 Ideal L7 and L8 models, with Air, Pro, and Max being changed to Pro, Max, and Ultra respectively; The naming of the 2024 Ideal L9 Max has also been adjusted to the Ideal L9 Ultra. Compared to the previous models, the starting prices of the 2024 L7 and L8 have been reduced by 18000 yuan.
Relying solely on the three products of the L series, Ideal Automobile achieved a delivery volume of 376000 units in 2023, ranking first among the new forces in car manufacturing. With the launch of MEGA, Ideal Automobile had expected to deliver 100000 to 103000 vehicles in the first quarter of this year. However, MEGA fell into a crisis of public opinion after its launch, and the market did not meet expectations. On March 21st, Ideal Automobile (LI. NASDAQ/2015. HK) announced that due to lower than expected sales orders, the company now expects vehicle deliveries in the first quarter of 2024 to be between 76000 and 78000 units, lowering the delivery guidelines of 24000 to 25000 units.
Behind the price reduction of ideal cars is an increase in the intensity of market competition. BYD took the lead in lowering prices at the beginning of this year, and then the industry entered a wave of price reductions. After Xiaomi's first product was launched, more car companies began to lower prices, including Wenjie. On the other hand, after MEGA's failure, the growth of Ideal Automobile sales also encountered bottlenecks.
Since the beginning of this year, the sales of Ideal Automobile have been surpassed by Wenjie for several consecutive months. In the first quarter, the sales volume of Ideal Automobile was 80400 units, a year-on-year increase of 52.9%, lower than Wenjie's 85800 units. Retail data shows that the top selling car in the first quarter was the Ideal L7, with 32800 units sold. The sales of the Ideal L8 and Ideal L9 were 24000 and 20900 units respectively.
In addition, it is worth noting that a few days ago, the L series launched its fourth product, L6, with a starting price of 249800 yuan. This is the cheapest product currently launched by Ideal Automobile, bringing the price threshold below 250000 yuan for the first time. The design of L6 is identical to L7, L8, and L9, with dimensions very close to L7, except for some differences in configuration. Industry insiders believe that L6 may compete with L7 in the same field. And this may also be one of the reasons for this price adjustment. The official announcement from Ideal Automobile shows that the new Ideal L6 has exceeded 10000 orders within 72 hours of its launch.
On March 21st, Li Xiang, CEO of Ideal Automobile, stated in an internal letter that there were two main issues with Ideal Automobile in March. Firstly, there was a rhythm issue with Ideal MEGA, mistakenly treating its stage from 0 to 1 (commercial validation period) as operating from 1 to 10 (high-speed development period); The second issue is the desire to overly focus on sales, from top to bottom, focusing too much on sales and competition, allowing desire to surpass value and significantly reduce the value and operational efficiency of users who were originally best at it.
Recently, Ideal Automobile has also made internal adjustments. On April 3rd, it released an upgrade announcement for the matrix organization 2.0 targeting a scale of billions, announcing multiple organizational structure adjustments. In this adjustment, Ideal Automobile will focus on solving the problem of the value transmission chain being too long, to avoid reducing the quality and efficiency of decision-making through overly complex processes.
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