Behind the great price reduction of automobile enterprises is the urgency of clearing the inventory of fuel vehicles
With the intervention of the Hubei government, all the major brands of Dongfeng series participated in the "strongest exclusive subsidy in history" activity in March, and a wave of rush buying was successful. It is reported that the order volume of the C6 model alone has exceeded 15000.
Crazy price reduction is only for sales. In January-February this year, the cumulative sales volume of Dongfeng Group was 262285 vehicles, down 48.48% year on year. Among them, all sectors, including Dongfeng Honda, Dongfeng Nissan, DPCA and Dongfeng passenger cars, fell by 50%, except Landu. However, after the subsidy, it is also followed by consumers' strong wait-and-see sentiment towards the market.
After the exclusive subsidy of Dongfeng Honda in Hubei Province, Yunnan, Guizhou and Anhui have also launched regional direct subsidy of Dongfeng Honda full-range models with limited time. At the same time, the policy support of Hubei Province has also begun to radiate to other brands. The Buick brand of SAIC General Motors has launched a Hubei exclusive government and enterprise subsidy of up to 70000 yuan. The seven main models of SAIC Roewe are for sale, and the total government and enterprise subsidies can reach 50000 yuan.
In addition, FAW Toyota, Volkswagen, Cadillac and other brands have also started to reduce their prices, with VW down to 70000 yuan, Cadillac down to 130000 yuan, FAW Toyota down to 50000 yuan Under the chaos of the market, Volkswagen seems to have seen the end of the era of fuel vehicles.
High warehouse stores fuel cars for sale
The survey results of "auto dealer inventory" in January 2023 released by the China Automobile Circulation Association showed that there were five brands with inventory depth of more than 2.5 months in January, among which the brands with the highest inventory depth were Jaguar Land Rover, Dongfeng Honda and FAW-Volkswagen. The high inventory level is mainly affected by the low sales volume.
In January this year, Honda's terminal sales in China's auto market was 64193 units, down 56.2% year on year. Among them, Dongfeng Honda's monthly terminal sales were only 23909 units, down 64.14% from the same period last year. Not only that, Dongfeng Honda also continued the trend of sluggish sales in February, with only 38313 vehicles sold, a year-on-year decline of 30.2%.
The precipitous decline in sales forced Dongfeng Honda to suspend its production plan. According to the "Auto Pull Talk", Dongben Factory has been on holiday since February 18 and on February 27. At the same time, the production lines of DPCA and Dongfeng Fengshen have also been notified that DPCA will be on March 1.
"What brand strength is maintained and what brand positioning is, we have to compromise under the condition of high inventory and no market prospect." An insider said to the "Auto Pickup Talk" that once the inventory explodes, the production line will be forced to stop, the workers will have a holiday, and at the same time, the high rent of the site will bring huge losses to the auto companies, especially under the impact of new energy vehicles, it is better to put the inventory in the warehouse to rot or sell it as scrap, It's better to get back a little. It's better to lose 20% than 90%.
In fact, the inventory pressure is not only on a few companies, but also on the current situation of the entire industry. According to the data released by China Automobile Circulation Association, the comprehensive inventory coefficient of automobile dealers in January was 1.80, up 68.2% month-on-month and 23.3% year-on-year, and the inventory level was above the warning line.
Among them, the inventory coefficient of high-end luxury and imported brands was 1.70, up 65.0% month-on-month; The inventory coefficient of joint venture brands was 1.89, up 81.7% month-on-month; The inventory coefficient of independent brands was 1.75, up 43.4% month-on-month. This also means that with the new energy vehicles in the passenger car market of 100000 to 250000, there will only be more traditional fuel vehicle brands that are similar to the reduced price sales inventory.
Accelerate electric transformation
For traditional car companies, the top priority is to clear up the unsalable fuel garages and try to collect cash to carry out the next transformation. Because with the passage of time, traditional fuel vehicles will only be less and less valued.
In particular, this year coincides with the switching stage between Guoliua and Guoliub. All new cars with Guoliua emissions in the hands of dealers of all brands need to be sold and licensed before July this year. Moreover, the emission standard of country 6 b is more strict than that of country 6 a. The content of carbon monoxide, non-methane hydrocarbon, nitrogen oxide and pm fine particles in the tail gas have higher emission standards.
This is also why while Dongfeng Honda is carrying out a "big sale", its world's first new energy vehicle factory is stepping up construction in Wuhan Economic Development Zone. After all, in the eyes of most people, it is better to accelerate the new energy transformation in one step rather than spend a lot of energy to meet the emission standards of different models.
To this end, we also saw that SAIC-VW announced its annual target in February, with the proportion of new energy vehicles reaching 25%; DPCA will launch 9 models in the next five years, including 8 new energy models; In 2023, Dongfeng Nissan will adhere to the line of dual development of pure electricity and e-POWER, introduce more new energy products to China, and comprehensively transform to new energy.
All kinds of signs show that the traditional vehicle enterprises, especially the joint-venture traditional fuel vehicles, will change from a lucrative model to a low-profit model to maintain sales and market, and accelerate the upgrading and replacement of new energy vehicles. In this process, the "shelf life" of fuel vehicles will only be shorter and shorter.
Is the price of electric vehicles also being dragged down?
However, it should be noted that due to the double drop of vehicle price and oil price, the cost of fuel vehicles will drop sharply, which will lead to the loss of the cost advantage of electric vehicles.
Recently, international oil prices have continued to decline, falling for six consecutive trading days, which is the longest consecutive decline since February 2020. In China, the price of No. 92 gasoline is expected to return to the era of 6 yuan.
Faced with the decline in the cost of fuel vehicles and the price advantage, the advantages of new energy vehicles have shrunk significantly. This also means that the "price reduction tide" of new energy vehicles at the beginning of the year will continue for a period of time, and recently the joint venture brand electric vehicles have taken action to compete for the market through substantial discounts.
"The future of electric vehicles lies in the sharp drop in battery costs caused by the fall in lithium prices. However, the rapid growth in the production and sales of electric vehicles has led to the rapid growth in the demand for lithium raw materials, making it difficult to reduce the price of lithium raw materials." Some insiders said that BYD, Tesla and other leading new energy vehicle brands have formed a scale, have cost advantages, can reduce prices frequently and maintain a very substantial sales growth. And those auto brands that fail to catch up with the reform of new energy vehicles will be forced to join the price war in the face of the pressure of strong brands, sacrificing profits for scale. At this time, consumers only need to wait for the opportunity.
Crazy price reduction is only for sales. In January-February this year, the cumulative sales volume of Dongfeng Group was 262285 vehicles, down 48.48% year on year. Among them, all sectors, including Dongfeng Honda, Dongfeng Nissan, DPCA and Dongfeng passenger cars, fell by 50%, except Landu. However, after the subsidy, it is also followed by consumers' strong wait-and-see sentiment towards the market.
After the exclusive subsidy of Dongfeng Honda in Hubei Province, Yunnan, Guizhou and Anhui have also launched regional direct subsidy of Dongfeng Honda full-range models with limited time. At the same time, the policy support of Hubei Province has also begun to radiate to other brands. The Buick brand of SAIC General Motors has launched a Hubei exclusive government and enterprise subsidy of up to 70000 yuan. The seven main models of SAIC Roewe are for sale, and the total government and enterprise subsidies can reach 50000 yuan.
In addition, FAW Toyota, Volkswagen, Cadillac and other brands have also started to reduce their prices, with VW down to 70000 yuan, Cadillac down to 130000 yuan, FAW Toyota down to 50000 yuan Under the chaos of the market, Volkswagen seems to have seen the end of the era of fuel vehicles.
High warehouse stores fuel cars for sale
The survey results of "auto dealer inventory" in January 2023 released by the China Automobile Circulation Association showed that there were five brands with inventory depth of more than 2.5 months in January, among which the brands with the highest inventory depth were Jaguar Land Rover, Dongfeng Honda and FAW-Volkswagen. The high inventory level is mainly affected by the low sales volume.
In January this year, Honda's terminal sales in China's auto market was 64193 units, down 56.2% year on year. Among them, Dongfeng Honda's monthly terminal sales were only 23909 units, down 64.14% from the same period last year. Not only that, Dongfeng Honda also continued the trend of sluggish sales in February, with only 38313 vehicles sold, a year-on-year decline of 30.2%.
The precipitous decline in sales forced Dongfeng Honda to suspend its production plan. According to the "Auto Pull Talk", Dongben Factory has been on holiday since February 18 and on February 27. At the same time, the production lines of DPCA and Dongfeng Fengshen have also been notified that DPCA will be on March 1.
"What brand strength is maintained and what brand positioning is, we have to compromise under the condition of high inventory and no market prospect." An insider said to the "Auto Pickup Talk" that once the inventory explodes, the production line will be forced to stop, the workers will have a holiday, and at the same time, the high rent of the site will bring huge losses to the auto companies, especially under the impact of new energy vehicles, it is better to put the inventory in the warehouse to rot or sell it as scrap, It's better to get back a little. It's better to lose 20% than 90%.
In fact, the inventory pressure is not only on a few companies, but also on the current situation of the entire industry. According to the data released by China Automobile Circulation Association, the comprehensive inventory coefficient of automobile dealers in January was 1.80, up 68.2% month-on-month and 23.3% year-on-year, and the inventory level was above the warning line.
Among them, the inventory coefficient of high-end luxury and imported brands was 1.70, up 65.0% month-on-month; The inventory coefficient of joint venture brands was 1.89, up 81.7% month-on-month; The inventory coefficient of independent brands was 1.75, up 43.4% month-on-month. This also means that with the new energy vehicles in the passenger car market of 100000 to 250000, there will only be more traditional fuel vehicle brands that are similar to the reduced price sales inventory.
Accelerate electric transformation
For traditional car companies, the top priority is to clear up the unsalable fuel garages and try to collect cash to carry out the next transformation. Because with the passage of time, traditional fuel vehicles will only be less and less valued.
In particular, this year coincides with the switching stage between Guoliua and Guoliub. All new cars with Guoliua emissions in the hands of dealers of all brands need to be sold and licensed before July this year. Moreover, the emission standard of country 6 b is more strict than that of country 6 a. The content of carbon monoxide, non-methane hydrocarbon, nitrogen oxide and pm fine particles in the tail gas have higher emission standards.
This is also why while Dongfeng Honda is carrying out a "big sale", its world's first new energy vehicle factory is stepping up construction in Wuhan Economic Development Zone. After all, in the eyes of most people, it is better to accelerate the new energy transformation in one step rather than spend a lot of energy to meet the emission standards of different models.
To this end, we also saw that SAIC-VW announced its annual target in February, with the proportion of new energy vehicles reaching 25%; DPCA will launch 9 models in the next five years, including 8 new energy models; In 2023, Dongfeng Nissan will adhere to the line of dual development of pure electricity and e-POWER, introduce more new energy products to China, and comprehensively transform to new energy.
All kinds of signs show that the traditional vehicle enterprises, especially the joint-venture traditional fuel vehicles, will change from a lucrative model to a low-profit model to maintain sales and market, and accelerate the upgrading and replacement of new energy vehicles. In this process, the "shelf life" of fuel vehicles will only be shorter and shorter.
Is the price of electric vehicles also being dragged down?
However, it should be noted that due to the double drop of vehicle price and oil price, the cost of fuel vehicles will drop sharply, which will lead to the loss of the cost advantage of electric vehicles.
Recently, international oil prices have continued to decline, falling for six consecutive trading days, which is the longest consecutive decline since February 2020. In China, the price of No. 92 gasoline is expected to return to the era of 6 yuan.
Faced with the decline in the cost of fuel vehicles and the price advantage, the advantages of new energy vehicles have shrunk significantly. This also means that the "price reduction tide" of new energy vehicles at the beginning of the year will continue for a period of time, and recently the joint venture brand electric vehicles have taken action to compete for the market through substantial discounts.
"The future of electric vehicles lies in the sharp drop in battery costs caused by the fall in lithium prices. However, the rapid growth in the production and sales of electric vehicles has led to the rapid growth in the demand for lithium raw materials, making it difficult to reduce the price of lithium raw materials." Some insiders said that BYD, Tesla and other leading new energy vehicle brands have formed a scale, have cost advantages, can reduce prices frequently and maintain a very substantial sales growth. And those auto brands that fail to catch up with the reform of new energy vehicles will be forced to join the price war in the face of the pressure of strong brands, sacrificing profits for scale. At this time, consumers only need to wait for the opportunity.