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Reporter of China Business Network: Huang Xinxu Editor of China Business Network: Sun Lei

"Previously, we lost a lot of money when we cut prices, but this year, we lost a lot of money. The price system of the entire car market is outrageous now. We may recover some of the discounts from August." A few days ago, aDongfeng HondaA salesperson told the Daily Economic News reporter that they were planning to raise prices recently.

Since mid-July,BMWAfter withdrawing from the price war,Benz、AudiThere was also news of price adjustments.ToyotaJoint venture brands such as Toyota Motors and Volkswagen are reported to follow suit and increase prices. From luxury brands to joint venture brands, a wave of price increases is spreading in the terminal market.

"The development of the auto market this year is completely different from previous years. From the current perspective, it is still uncertain whether prices will rise again, but at least they will not fall sharply again."SAIC VolkswagenThe car salesperson said.

A ShanghaiBuickThe sales staff of the 4S store analyzed to the reporter that many OEMs usually have seasonal rest in the summer, and the factories may reduce production. In addition, the terminal market has experienced a surge in June, and the inventory status is also at a low level. In previous years, there have been cases of "shrinking" summer discounts. This time, the companies' decision not to follow up on the "price war" is also related to the terminal inventory. The subsequent price changes are still unknown.

Next, what will be the price trend of joint venture brands in the terminal market? Have joint venture brands emerged from the "price war" cycle? Can they maintain their market share without engaging in "price wars"? The reporter of "Daily Economic News" visited the first-tier market with these questions.

Many brands are planning to raise prices

"Prices are indeed at the bottom now, and there should be some price adjustments in the future. We are still waiting for notification on the specific time. The adjustments may start from the week of July 22, or next month." The salesperson at the Buick 4S store mentioned above believes that the adjustment fluctuations in the terminal prices of luxury brands are transitive.

According to him,Buick E5For example, the standard endurance version of the car, whose current guide price is 203,900 yuan, can enjoy an internal preferential price of 34,000 yuan, but there may be a discount reduction of 3,000 yuan in the future.

"Before, other brands were desperately lowering prices. They had to lower prices if they wanted to sell cars. But the reality is that most brands in the entire automotive terminal market are losing money on every car they sell. After such a period of internal competition, many brands can no longer bear it. Now that luxury brands have increased their prices, the terminal prices in the automotive market may begin to stop falling and rise again." A salesperson from SAIC Volkswagen told reporters that some of SAIC Volkswagen's fuel vehicles may see discount adjustments in the future.Tiguan LFor example, the current cash discount in the terminal market is 40,000 yuan, and if you choose to purchase with a mortgage, it is 50,000 yuan. This price has the largest discount in recent months, and the discount may be reduced by 2,000 to 3,000 yuan in the future.

A Toyota salesperson in Shanghai also revealed that Toyota's current car models have seen a certain increase in price, and that you can still take advantage of the last preferential policy if you buy a car this week, but there is a high possibility that subsequent models will see price increases.

In fact, the reporter browsed the Dongchedi community and found that the car price details shared by car owners showed thatHonda Accord、Civic,publicPassatThe prices of other models have increased to varying degrees. For example, car owners in Hunan said that the price of Honda's entire series has increased by about 10,000 yuan, and the price of Honda Civic Dynamic Edition in Guangdong has also increased by more than 10,000 yuan compared with June. Car owners in Xi'an said that the price of Civic Dynamic Edition has increased by 6,000 yuan compared with last month.

However, not all joint venture brands are planning to raise prices. A Jetta brand car salesperson told reporters: "Our terminal discounts have been relatively stable, averaging 10,000 yuan, and there will be no changes in the near future. Sometimes consumers see some discounts online, but after going to the store to understand, they find that it is just a gimmick."

In addition to joint venture brands, the reporter found during the visit thatNIOThe prices will increase on July 22, with ET5/5T increasing by 3,000 yuan and ES6/EC6 increasing by 5,000 yuan. "However, this is just our normal adjustment of the discount, not because of the price increase of luxury brands. In fact, we also tightened the preferential policy in May and June, and relaxed the subsidy in early July. The car price fluctuated throughout the process." A salesperson of NIO told reporters.

The reporter learned thatZhiji AutoIn mid-JuneZhiji L6The listing price will be increased by 5,000 yuan, and the starting price of the new car will be adjusted from 199,900 yuan to 204,900 yuan. "We no longer simply stimulate sales by lowering prices, but hope to attract consumers by improving product configuration and user experience," said a Zhiji Auto salesperson.

During the visit, the reporter found that "current prices are the lowest" and "price increases are planned later" were the common statements of many sales staff. "July and August are also the usual off-season for sales, and the order conversion rate is not high. The large discounts in June are also for the purpose of boosting sales in the half-year period. In previous years, some discounts would be weakened in July. It's just that under this year's price war, everyone is more sensitive to changes in these preferential policies." said the above-mentioned SAIC Volkswagen sales staff.

Relieve dealer operating pressure

“BYDThe essence of this year's price increase is to gain pricing power for A-class cars. Previously, the A-class car market was usually dominated by joint venture cars. Joint venture brands cannot retreat, and they must follow up even if times are tough. "A staff member of a joint venture brand once analyzed the origin of this year's "price war" to reporters.

But it is worth noting that after half a year of price war, joint venture brands seem to have not increased their market share while giving up profits.

The latest sales data from the China Passenger Car Association shows that in the first half of this year, the market share of German brands has dropped from 20.4% last year to 19.4%, the market share of Japanese brands has dropped from 17% to 14.9%, and the market share of American brands has dropped from 7.9% to 6.7%. On the other hand, the market share of domestic brands has increased from 51.9% at the end of last year to 56.5% in the first half of this year.

As the price war in the auto market intensifies, the operating pressure on many dealers is increasing. The latest issue of the "Vehicle Inventory Alert Index Survey of Chinese Auto Dealers" (VIA) released by the China Automobile Dealers Association can more directly reflect the operating pressure on dealers.

Data shows that in June 2024, China's auto dealer inventory warning index was 62.3%, up 8.3 percentage points year-on-year and 4.1 percentage points month-on-month. The inventory warning index is above the boom-bust line, and the auto distribution industry is in a recession.

The above survey results show that more than 80% of auto dealers failed to complete their sales targets in the first half of 2024, and only 18.4% of dealers completed their targets. At the same time, dealers often "trade price for volume", new car prices have dropped sharply, and the gross profit of bare cars is low.

"The price system collapsed a bit because of excessive volume before. The price correction now is returning to a reasonable and healthy track." The Honda salesperson mentioned above believes that the price correction brewing in the terminal market is a good phenomenon.

"Previously, the price war was fought to clear inventory and recover funds. Even though we lost money on every car we sold, it was much better than losing everything if we couldn't sell any. Now many brands are adjusting their prices, which will reduce the operating pressure on dealers, and everyone supports it."RoeweThe brand's sales staff said.

However, many car company executives have said that this year is the first year for Chinese auto brands to enter the "bloody sea" of competition, that is, the first year of the elimination round. Many executives also said that the competition landscape of smart electric vehicles is fierce, and in the end, only five companies may be left to occupy the main market share. Under such a competitive situation, whether the subsequent "price war" in the terminal market will continue is worth continued attention.

Daily Economic News