New cars are piled up for the first time, and the price continues to be ＂discounted＂! The Guangzhou Auto Show starts the final battle of the auto market

On November 18, 2023, the 21st Guangzhou International Automobile Exhibition ushered in the first professional audience day. ic photo

The Guangzhou Auto Show is the last large-scale auto show of the year, and it has naturally become the starting gun for the final battle of car companies at the end of the year.

This year’s Guangzhou Auto Show is still hot, and car companies have brought their blockbuster products and huge sales teams to the show. According to the organizers of the Guangzhou Auto Show, the total number of vehicles on display at this year’s Guangzhou Auto Show is 1,132, including 469 new energy vehicles.

It is worth noting that in the increasingly fierce competitive environment, car companies have accelerated the pace of new car launches in order to boost sales. There are as many as 59 cars in the world for the first time at this year’s Guangzhou Auto Show, and new car launches have been held intensively. Many brands have launched new blockbuster models, which will also add to the national auto market’s year-end impulse.

The competition for new products is intense, and price reduction is the main theme

New products have been an effective way for automakers to boost sales, especially in the first year of a new car’s launch. In the Chinese market, automakers have "rolled" the development cycle of new energy vehicles from the past five years or so to 48 months or even 36 months.

According to the organizers of the Guangzhou Auto Show, at this year’s Guangzhou Auto Show, there are as many as 59 cars in the world, including 8 first cars from multinational companies. In comparison, there were 38 cars in the world at last year’s Guangzhou Auto Show, including 9 first cars from multinational companies.

There are many models with high attention in the first car, such as BYD Ocean Network’s first medium-sized pure electric SUV, Hishi07 EV, Great Wall’s tank 700 Hi4-T, Huawei Hongmeng Cockpit 4.0-blessed Zhijie S7, Xiaopeng’s first MPV model X9, Li Auto’s first pure electric flagship model MEGA, and so on.

An employee of a car company participating in the exhibition told the surging news reporter, "This year’s Guangzhou Auto Show new car launches are so crowded that there are many overlapping parts in the same hall, and the leaders are simply selling cars at the top of their throats."

In addition, in this year’s model launch, it can be seen that car companies are cautious in pricing. The official price announced by many first models is lower than market expectations or lower than the price of previous generation models.

For example, the delivery price of Polaris 4 released by Polaris during the Guangzhou Auto Show was 299,900 yuan to 399,900 yuan. Compared with the price displayed at the Shanghai Auto Show in April, it decreased by about 50,000 yuan. It is not difficult to see from this price adjustment that in the face of competition in China’s new energy vehicle market, Polaris is eager to participate in it by reducing prices.

At the Guangzhou auto show, car companies have offered sincere discounts. Similarly, car company executives no longer give a negative or secretive attitude to the "price war".

"In addition to price, customer trust is also one of the factors to maintain brand competitiveness," Meng Xia, chief executive of Volkswagen’s passenger car brand in China, said at the auto show. "Volkswagen will not compete solely on price." He also said that in China, it is committed to providing consumers with excellent products at attractive prices, but not just reducing prices.

Volkswagen can be said to be the beneficiary of the price war in the car market. After launching a sharp price reduction of the pure electric ID family in July this year, the sales of the Volkswagen ID series soared. In particular, the Volkswagen ID.3 achieved a nearly four-fold increase in sales in the second month after the price reduction.

The car market has intensified, making it difficult for car companies to make money

Driven by a large number of new cars at the Guangzhou Auto Show, as well as price cuts and promotions by car companies, the auto market at the end of the year was generally optimistic.

The latest data from the Passenger Federation shows that from November 1st to 12th, the retail sales of the passenger car market was 538,000, an increase of 18% over the same period last year. The Passenger Federation believes that with the gradual strengthening of the car market, car companies are looking forward to working hard to achieve the annual target. The confidence of the car market is enhanced, and the year-on-year growth of the car market in November is expected to reach more than 20%.

The passenger association believes that this year’s car market can steadily reach the expected sales of 9 million vehicles in the whole year. Some institutions have also given more optimistic expectations.

Dongguan Securities believes that the fourth quarter is the traditional peak season of the automobile market, the national and local policies to promote the consumption of new energy vehicles are expected to continue to exert force, new products of car companies have been launched one after another, and at the same time, another round of price reduction promotions has been opened to stimulate further release of demand.

However, the increase in sales of new energy vehicles has not eased the current intense "involution", and the profitability problem is still a major problem plaguing car companies.

During the Guangzhou Auto Show, Zhuang Jingxiong, general manager of SAIC General Motors, was even more blunt, saying that selling new energy vehicles "is too embarrassing to say hello if you don’t lose money now."

Huatai Securities said in its latest research report that the auto industry discount rate has still been rising since November. The agency’s tracking data shows that the current average discount rate in the auto industry is 5.93%, compared with less than 3% in the same period last year. The latest data from the National Bureau of Statistics also showed that the price of new energy passenger vehicles fell by 4.6% year-on-year in October.

As competition in the auto market intensifies, the survival of the fittest in the industry is accelerating. Liu Jie, vice president of Li Auto’s business, said in an interview with The Paper and other media, "2023 to 2025 is the elimination stage of new energy vehicles. By the end of next year, the top few winners should have basically stabilized, and the new energy companies on the card table will further expand their market share in the later stage."

In fact, this year’s Guangzhou Auto Show has already seen the absence of many well-known brands, such as GAC Mitsubishi, which has just announced its withdrawal from the Chinese market, Weimaraner and Aichi, which are in business difficulties, and Dongfeng Peugeot Citroen, which launched a price war at the beginning of this year.