Real car market exploration | Car import volume continues to shrink, domestic brands continue to take market share of imported cars
2024-08-12
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"The discount for Panamera is now 100,000 to 150,000 yuan, and the discount amount varies for different configurations. The higher the configuration, the more discounts you get. You can also enjoy a five-year interest-free policy if you buy the car in installments." On August 9, a sales consultant at a Porsche 4S store in Tianjin told the Beijing News Shell Finance reporter, "In addition, the Macan also has a discount of about 20 percentage points, but the discount range for choosing bank loans and 4S store financial services is different."
A Porsche 4S store. Photo by Wang Linlin, a reporter from Beijing News Shell Finance
Recently, a reporter from Beijing News Shell Finance visited and consulted many 4S stores of automobile brands in Beijing, Tianjin and the surrounding areas of Beijing and found that many brands of imported models have different degrees of discounts. Behind the price reduction promotion of imported models is the decline in domestic automobile imports.
Data from the Imported Vehicle Working Committee of the China Automobile Dealers Association showed that the volume of automobile imports in the first half of this year was 332,000 units, a year-on-year decrease of 4.1%; after four years of continuous decline in automobile imports, "destocking" remains the main task this year; in June, sales of imported vehicles fell further, and the inventory depth rose to 6.6 months, a record high.
Wang Cun, director of the Imported Car Committee of the China Automobile Dealers Association, said in an interview with Beijing News Beike Financial reporter that the main reason for the decline in automobile imports is market supply. Due to excessive supply before, inventory is high, and it is still in the destocking period, so the supply is reduced and imports decline. The current market demand is relatively stable, but overall sales are still relatively low.
Many imported models have discounts of more than 100,000 yuan, and sales have declined due to the price war.
"There is a Chinese Valentine's Day promotion this weekend with a lot of discounts." On August 10, a salesperson at a Lexus 4S store in the Beijing area told reporters, "Take the ES200 as an example. There are special-priced cars in the store this weekend. In addition, the discount for the current models is also around 90,000 yuan. We can negotiate if you are sure about the purchase price." In addition, she said that models like the Lexus RX and RX New Energy and Lexus RZ also have discounts of tens of thousands of yuan.
A Lexus 4S store. Photo by Wang Linlin, a reporter from Beijing News Shell Finance
A salesperson at a Land Rover 4S store in Beijing said that currently the Range Rover Sport can offer a discount of up to 170,000 yuan, while the Defender and Range Rover can also offer discounts of tens of thousands of yuan. If the purchase price is confirmed, further negotiations can be conducted. In addition, there will be big gift packages and other preferential benefits. In addition, a salesperson at a Mercedes-Benz 4S store in Beijing told reporters that the current Mercedes-Benz A-Class AGM can offer a discount of nearly 120,000 yuan, and the Mercedes-Benz E-Class can offer a discount of 60,000 yuan.
A salesperson at a Volvo 4S store in the Beijing area said that the current XC90 import discount is very strong, with a cash discount of nearly 180,000 yuan. A salesperson at a BMW 4S store in the Beijing area said that the imported BMW 5 Series can be discounted by 100,000 yuan, and the cash discount for the BMW X2 is also over 100,000 yuan. Salespeople at 4S stores of many car brands said that many imported models in the store have great discounts. The current car market is under great competition, and imported models are not as easy to sell as in previous years.
"The store has a sales target for imported models every month, so the discounts are relatively large." A salesperson at a certain brand 4S store said, "The sales pressure on imported cars is greater than in previous years. Now there are fewer people coming to the store to look at imported cars."
However, not all imported models have price cuts. The reporter found that Toyota Alphard is still subject to price increases. A salesperson at a GAC Toyota 4S store said that the Alphard has a choice of colors, and the highest price increase is currently 200,000 yuan.
The terminal sales price of imported cars has long been affected by the relationship between supply and demand, showing a polarized phenomenon: unpopular models are discounted for promotion, while popular models even require a premium to purchase; but with multiple factors such as the intensified competition in the domestic automobile market, the situation has changed.
Data from the Imported Car Working Committee of the China Automobile Dealers Association showed that after the average customs declaration price of imported cars in March fell below the average customs declaration price in 2023 for the first time, the average customs declaration price of imported cars fell further in June. In addition, the imported car market continued its overall downward trend. From January to June, super luxury cars fell by 34.15%, non-luxury car sales fell by 17.94%, and luxury cars fell by 10.07%. The price war in the domestic auto market also affected the imported car market.
Zhang Junyi, managing partner of Oliver Wyman, said that luxury brands already account for about 90% of imported cars, and the performance of luxury brands can also reflect the performance of the final imported car market.
The rise of domestic brands impacts the imported car market, and new energy vehicles grab a piece of the pie
Data from the Imported Vehicle Working Committee of the China Automobile Dealers Association shows that the number of imported vehicles in China has continued to decline at an average annual rate of about 10% from 1.24 million vehicles in 2017 to 799,000 vehicles in 2023; in the first half of this year, vehicle imports continued to decline.
The volume of automobile imports in recent years.
Zhang Junyi analyzed that many demands in the Chinese automobile market have turned into demands for electrification, and the market for mid-range imported fuel vehicles is shrinking extremely, which actually reflects the relative shrinkage of corresponding joint venture brands; the price competition situation in the domestic automobile market is severe, and if imported cars cannot adapt to the price war, it will also affect the import volume. Both car companies and sellers hope to earn a certain gross profit through imported models.
Zhang Junyi added that the current electrification layout of imported car brands does not fully meet the imagination and expectations of the new generation of Chinese consumers for electric vehicles, and the level of intelligence is also relatively backward.
In addition, the localization of imported models has also had a certain impact on the imported car market. In 2021, "SIENNA" was localized and officially launched on the market, with a price far lower than that of the previous imported version; in 2022, the BMW X5 was localized and its price was lower than the imported version, which also led to a decline in sales of imported BMW X5; the localization of Tesla has also reduced the sales scale of imported new energy vehicles to a certain extent.
Cui Dongshu, secretary-general of the National Passenger Car Market Information Joint Conference, said that on the one hand, the rise of domestic brands of cars has exerted a certain squeeze on the imported car market, and on the other hand, imported cars have not launched many new products, and consumers have limited choices; in addition, the rapid development of domestic brand new energy vehicles, the continuous layout of new car-making forces and domestic brands in the high-end market have also shared the imported car market to a certain extent.
Wang Cun believes that 2014 was a turning point in the number of imported cars, and the import volume continued to decline after the peak of 1.42 million vehicles; from the perspective of imported car sales, 2017 can also be considered a turning point. He further stated that due to multiple factors such as more imported cars being localized, consumers' increased awareness of domestic brands, and the improvement of the competitiveness of the entire industry, imported cars have gradually become a demand for high-end luxury and personalized products, and therefore the import volume has continued to decline.
In Wang Cun's opinion, the main task of the current imported car market is still to destock. Judging from the development of the imported car market, it is almost difficult to return to the import volume stage of 1 million vehicles.
Beijing News Shell Financial Reporter Wang Linlin Editor Chen Li Proofreader Zhang Yanjun
