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The monthly sales competition has been staged again recently, and many car companies have submitted their sales performance reports for the first seven months.

Among the more than ten automakers that have disclosed their sales volume counted by the reporter of 21st Century Business Herald, only BYD and Geely Auto have achieved more than 50% of their annual targets; four companies, including Ideal Auto, NIO, Leapmotor, and Zeekr Auto, have achieved annual target completion rates of more than 40%; Great Wall Motor, GAC Aion, Avita, Lantu Auto, and Xiaomi Auto have achieved about 30% of their annual targets; and the target completion rates of three automakers, namely, Deepin Auto, Xpeng Motors, and Zhiji Auto, are less than 30%.

The automobile business is a business that pursues scale and efficiency to the extreme. After 19 months of price war, the supply and demand relationship has undergone profound changes. Excessive competition in technology and price has damaged the gross profit margin of each automaker. The profits of the automobile industry have been greatly reduced, and the pressure has also been transmitted to the upstream and downstream. Automakers need to find a balance between scale and efficiency.

"Di Wang" is far ahead, Geely raises its annual target

Pricing power is a brand’s most important asset and is often in the hands of the industry’s biggest profit makers.

BYD, which sold 3.02 million vehicles in 2023, became one of the most profitable automakers, with a gross profit margin of 23.02%. With a huge sales base and higher gross profit margin, BYD took the initiative in 2024 and launched 15 honor versions of its main models in one month. Without changing the battery and chassis, the new cars added wireless charging and seat massage, with the largest price reduction exceeding 30,000 yuan. Subsequently, the fifth-generation DM technology once again aimed at joint venture automakers, trying to squeeze their market share from 40% to 10%.

Low prices kill everything, and the move of opening the way with prices is always pure and efficient - from January to July this year, BYD's cumulative sales of new energy vehicles reached 1.9554 million units, a year-on-year increase of 28.83%, which has completed more than half of the annual target (3.6 million units). In the next five months, the monthly sales can be maintained at more than 330,000 units to complete the annual target. BYD has exceeded 340,000 units in June (341,700 units) and July (342,400 units) for two consecutive months.

From the perspective of product structure, BYD's plug-in hybrid models continue to expand their advantages, surpassing pure electric vehicles. In the first seven months of this year, BYD sold about 1.0918 million plug-in hybrid models, accounting for 56.05% of the overall sales of new energy passenger vehicles in the same period, an increase of 44.1% year-on-year, exceeding the 13.91% year-on-year growth rate of pure electric passenger vehicles.

BYD is still strengthening its competitiveness in the plug-in hybrid market. Following the launch of Qin L DM-i and Haibao 06 DM-i in May, BYD Song L DM-i and the new Song PLUS DM-i were recently launched, with prices ranging from 135,800 to 175,800 yuan. Auto blogger Sun Shaojun revealed that BYD's cumulative orders in the last week of July were 90,000 to 95,000 vehicles, "The overall orders are relatively stable, and the new orders come from the launch of the 'two Songs'."

Following closely behind is Chery, which has declared that it will "become the second in the industry by the end of this year and surpass BYD". Its cumulative sales in the first seven months of this year reached 1.296 million vehicles, a year-on-year increase of 45.4%.

Yin Tongyue, Party Secretary and Chairman of Chery Holding Group, said at the beginning of the year that the situation will be more severe in 2024 and is expected to be at a low growth rate. Based on the rapid growth in 2023, Chery Group's goal this year is to exceed the industry by 10 to 20 percentage points in sales growth rate.

However, Chery Automobile, whose revenue and sales volume increased significantly year-on-year, was revealed to have issued 14-dimensional cost-cutting measures within the company, including design optimization, reducing the number of parts, using integrated components, reducing unnecessary processing and transportation, etc. Earlier, a Chery employee revealed that "overtime is forced to work for more than 20 hours without overtime pay", which also exposed the pressure behind Chery's rapid development.

Another company that is full of confidence and has achieved more than 50% of its annual sales target is Geely. In July, Geely Auto adjusted its annual target for 2024 from 1.9 million vehicles to more than 2 million vehicles. Specifically, in the domestic market, Geely brand sold 1.15 million vehicles, Lynk & Co brand sold 270,000 vehicles, and Zeekr brand sold 200,000 vehicles; in the overseas market, Geely brand and Lynk & Co brand sold 350,000 vehicles in total, and Zeekr brand sold 30,000 vehicles.

The rapid progress in the new energy sector is the basis for Geely Auto to raise its annual target. From January to July this year, Geely's new energy vehicle sales totaled 379,200 units, a year-on-year increase of 105%. Among them, Galaxy increased by 397% year-on-year to 98,100 units, accelerating the rapid penetration of Geely's new energy; Zeekr Auto delivered more than 103,500 new vehicles, completing 45% of the annual sales target (230,000 units). In the second half of the year, Zeekr will also launch two new products, the first medium and large SUV Zeekr 7X and the large five-seater Zeekr MIX.

"Two new cars will be launched in the second half of the year, with monthly sales stabilizing at over 20,000 units, and even reaching 30,000 units. We will challenge the goal of delivering over 30,000 units of China's high-end pure electric vehicles in a single month, and we are confident that we will achieve the annual target." said Lin Jinwen, vice president of Zeekr Intelligent Technology.

Great Wall Motors is slightly inferior to other private car companies. From January to July this year, Great Wall Motors sold 651,000 vehicles, a year-on-year increase of 3.60%, and only achieved 34.3% of the annual target (1.9 million vehicles). This performance is not only far behind BYD, whose sales volume is close to 2 million vehicles in the same period, but also far behind Geely, whose sales volume exceeded one million vehicles, and the growth rate is less than double digits.

Euler failed in the new energy market, Great Wall pickups failed to sell well, and WEY failed to replicate Great Wall's sales "myth" in SUV models. With only Haval as the mainstay and the Tank series shouldering the heavy responsibility, it is still not easy for Great Wall to achieve the sales explosion it desires. Previously, Wei Jianjun, the head of Great Wall Motors, personally took action to build his own IP and tried to communicate with users through new forms such as live broadcasts and short videos, creating a new marketing paradigm for the brand in the traffic era. However, the effect of converting volume into sales was not obvious.

It is worth mentioning that while BYD, Chery, Geely and Great Wall are continuously expanding their brands and product portfolios, they are also simultaneously adapting to the "going global" trend of their own brands, setting their sights overseas and seeking new growth points.

In the first seven months of this year, BYD's overseas sales of new energy passenger vehicles totaled 233,400 units, a year-on-year increase of 152%, which is close to the 243,000 units sold overseas in the whole of last year. From a horizontal perspective, this performance is less than half of Chery's export volume of 622,400 units in the same period, and compared with Geely's 229,800 units and Great Wall's 239,700 units, it has not opened up a significant gap like the domestic market, but BYD can achieve this result entirely relying on new energy models, and has obvious advantages in the international market. A reporter from 21st Century Business Herald previously learned from BYD executives that BYD's overseas sales target is anchored at 500,000 units in 2024 and 1 million units in 2025, and plans to double in the next three years.

New car companies' performance is differentiated

In addition to traditional car companies, from January to July this year, the sales of new car companies showed obvious differentiation, and the market share accelerated to concentrate on the top - Ideal and Hongmeng Intelligent Driving both exceeded 200,000 vehicles, firmly occupying the first echelon; Leapmotor, NIO, Deep Blue, Zeekr and others followed closely behind, all exceeding 100,000 vehicles; Xpeng and Nezha hovered around 60,000 vehicles; Arcfox, Zhiji, Lantu and others have not yet exceeded 40,000 vehicles. It is worth paying attention to which new energy brands incubated by traditional car companies will increase sales first.

A reporter from 21st Century Business Herald found that the annual target completion rate of Ideal Auto, NIO, Leapmotor and Zeekr Auto exceeded 40%.

Specifically, after the failure of its first pure electric model, layoffs, model upgrades and iterations, and organizational structure adjustments, Ideal Auto once again surpassed the 50,000 monthly sales mark in July, six months after the last monthly sales breakthrough of 50,000. From January to July this year, Ideal delivered a total of about 240,000 vehicles, completing 42.9% of the lower limit of its annual target (560,000 to 640,000 vehicles). During the same period, Leapmotor delivered 108,800 new vehicles, achieving 43.5% of the lower limit of its annual sales target (250,000 to 300,000 vehicles); NIO delivered nearly 108,000 new vehicles, achieving 46.9% of its annual sales target (230,000 vehicles).

Xiaomi Motors, which has been very popular and has delivered more than 10,000 vehicles for two consecutive months, has delivered more than 45,000 vehicles in total. Lei Jun, the founder of Xiaomi, revealed that Xiaomi Motors is expected to complete the annual delivery target of 100,000 vehicles in November ahead of schedule and strive for the annual delivery target of 120,000 vehicles. So far, Xiaomi Motors has delivered more than 30,000 vehicles.

Since June, Xiaomi's auto factory has started double-shift production, and the delivery cycle of each model has been shortened by about two weeks, but the waiting period is still long. Currently, the delivery period of Xiaomi SU7 standard version and Max version is more than half a year. The long waiting time and the preferential strength of competing models have diverted some users of Xiaomi SU7. A Xiaomi auto salesperson told the 21st Century Business Herald reporter that "the number of new orders has slowed down significantly compared with before."

Some are happy while others are worried. GAC Aion, whose sales are expected to soar in 2023, has sold 213,000 vehicles in the first seven months of this year, completing only 30.4% of its annual sales target of 700,000 vehicles. Previously, GAC Aion's AION S, AION Y and other models have become hot-selling models in the online car-hailing market due to their high cost performance, but as the new energy online car-hailing market gradually becomes saturated, GAC Aion is also facing considerable growth pressure. Data show that the share of pure electric vehicles in the online car-hailing market has risen sharply from 10.4% in 2016 to 84.9% in 2023. In addition, the Haobo brand, which GAC Aion has high hopes for, does not have a strong presence in the mid-to-high-end market, and its competitive advantage over Xiaomi SU7, Tesla Model 3, and Zhijie S7 is not obvious.

"In the first half of this year, neither Haobo nor Aion launched new cars, and PHEV is not yet covered in the technical route. It is normal to encounter difficulties temporarily." Gu Huinan, general manager of GAC Aion, said in an interview with a reporter from 21st Century Business Herald that three products will be launched in the second half of the year, with a new car every two months, with prices ranging from 100,000 to 700,000 yuan.

Among them, the second-generation AION V was launched in July, with a starting price reduced by more than 20,000 yuan compared with the current model. Considering the delivery cycle, the contribution of the new car to sales will be reflected in August.

In addition to the above-mentioned car companies, Xpeng Motors and Nezha Motors still have a large gap from the goals set at the beginning of the year, having only completed 22.6% and 21.6% respectively.

Xpeng Motors regards MONA M03 as the next tool to boost sales. On August 1, the first batch of exhibition cars of the model arrived at stores in 100 cities across the country. How much it will contribute to its full-year sales remains to be tested by the market. Nezha Auto will also fully upgrade its brand in the second half of the year and plans to launch a new sedan in the third quarter.

An Xiaopeng Motors salesperson told the 21st Century Business Herald reporter that the Xiaopeng MONA M03 series is not equipped with laser radar and only has L2-level assisted driving. "The price is between 100,000 and 150,000 yuan, directly targeting BYD Qin and Dolphin models, and will not be equipped with Xiaopeng's XNGP intelligent assisted driving system."

"The continued intensification of large-scale sales promotions in the first half of the year disrupted the normal price trend of the auto market. It will take some time to adapt to the recovery of terminal prices. In addition, the super-strong promotional efforts in the second quarter have had an overdraft effect on car buyers in the second half of the year, and the effect of exchanging price for volume is likely to weaken." Cui Dongshu, secretary-general of the China Passenger Car Association, told reporters that automakers will optimize and adjust market expectations, product structure and listing rhythm based on previous market performance, and may enter a period of accumulation of strength.

Cui Dongshu pointed out that sales performance in the second half of the year is generally better than that in the first half. Referring to the progress of completing 43% of the total annual sales in the first half of 2023, the annual sales this year is expected to exceed 22 million vehicles.

An industry analyst told the 21st Century Business Herald reporter that before the old production capacity of fuel vehicles is cleared and the new energy vehicle market structure stabilizes, price competition will remain fierce. Leading companies can amortize costs and increase market share by reducing prices, but unprofitable automakers, especially weak brands, will be eliminated faster if they are involved in price wars.

At present, traditional car companies that are seeking change, new car companies seeking to reduce costs and increase efficiency, and latecomers such as Huawei and Xiaomi who are eyeing the market are all brought to the same starting point to find a way out. Almost all players present have reached a consensus - the elimination round in the automotive industry will be decided around 2025.