More than 10 car companies have lowered their prices, with discounts as low as 40% for purchasing cars Has a new round of car price wars begun?

Over 10 car companies have reduced prices, with discounts up to 40% Is this the start of a new car price war?

【Phoneauto】 Although nearly half a year has passed, I believe many people still remember the price war in the domestic car market in March this year. The phrase “the dignified and stable Citroen C6 priced at 120,000 yuan” is probably still lingering in many people’s minds. After a nearly half-year ceasefire, it seems that a new round of price wars has started in August.

Jike 001

On August 11th, Jike announced that its model Jike 001 has started a limited-time price reduction promotion, which will continue until December 31st this year. The price of the YOU version with a 100kWh battery has been reduced from 386,000 yuan to 349,000 yuan, a reduction of 37,000 yuan; the price of the ME version with a 100kWh battery has been reduced from the previous 349,000 yuan to 3.19 million yuan, a reduction of 30,000 yuan; and the price of the WE version with an 86kWh/100kWh battery has been reduced from the original 300,000 yuan to 269,000 yuan, a reduction of 31,000 yuan.

• Tesla announced another price reduction, with the price of the Model Y once again falling below 300,000 yuan
• BYD enters the Philippines and will sell multiple electric vehicles, challenging Toyota and Mitsubishi
• Rivian is planning to launch an 800V architecture platform, but the current models R1T and R1S are not included

Jike 001 price reduction

In addition to the price reduction, Jike also announced that all models of Jike 001 can be equipped with a free Arctic Blue exterior worth 6,000 yuan. The YOU, ME, and WE versions with a 140kWh battery will also come with a free set of 7kW intelligent home charging service package. Although some netizens pointed out that the 28,000 yuan optional fund previously launched by Jike is not much different from the amount of this price reduction, compared to forcing users to choose options, this direct price reduction method undoubtedly attracts consumers more.

Jike is not the first car company to announce price reductions in August. On the first day of August, SAIC Volkswagen announced price reductions for 9 SUV models, with the highest reduction of up to 60,000 yuan. The discounted models include both fuel vehicles and new energy vehicles. Among them, the Touareg series offers the highest discount, with a 60,000 yuan discount for the 2023 Touareg and the all-new Touareg X. The plug-in hybrid Touareg L has a comprehensive discount of up to 55,000 yuan, the 2023 Touareg X model has a discount of 35,000 yuan, and the new Tayron and TuoKai have discounts of 30,000 yuan. The discounts for the two pure electric SUVs ID.6X and ID.4X are 50,000 yuan and 42,000 yuan, respectively.

On the same day, Zero Run, which had performed well in July sales, also lowered the prices of some pure electric models, with the highest price reduction reaching 20,000 yuan. The price of the Zero Run C11 580 four-wheel drive performance version is now 209,800 yuan, while the C01 630 four-wheel drive performance version is also priced at 208,800 yuan. After that, three models under Chery New Energy, Xiaomayi, QQ Ice Cream, and Unbound Pro, also received a maximum subsidy of 10,000 yuan. Among them, the subsidies for Xiaomayi and QQ Ice Cream include cash subsidies and financial subsidies, while Unbound Pro directly enjoys a cash discount of 10,000 yuan per unit.

Price reduction for Zero Run

In addition, NIO Automotive announced on the 5th of this month that the 2022 NIO S model has started to reduce prices. The cheapest 520 Lite version is priced at 159,800 yuan, which is 30,000 yuan lower than before the price reduction. Great Wall’s Haval Xilong series also launched the “818 Limited-time E-commerce Welfare Season” activity, where users can enjoy a cash expansion gift of 2,000 yuan to 8,000 yuan when placing an order, and can snap up a coupon worth up to 12,000 yuan for 99 yuan from August 5th to August 26th.

NIO price reduction

In addition to the car companies that have announced the price reduction, some car companies have adjusted the prices through dealers. It is reported that BYD recently lowered the price of the Qin PLUS DM-i Champion Edition by 3,000 yuan to a starting price of 96,800 yuan for a limited time. However, the most explosive one is Ford’s electric horse. On August 9th, an automotive blogger revealed that Ford China launched an internal purchase activity for the electric horse Mustang Mach E model for internal employees, with a maximum discount of 40%. Among them, the recommended retail price of the rear-wheel drive version, which starts at 249,900 yuan, is only 149,520 yuan for employee purchases, a reduction of more than 100,000 yuan.

The blogger revealed that Ford’s electric horse has greatly reduced its price.

Why did many car companies choose to reduce their prices in August? On the one hand, as early as July 6th, companies such as NIO, SAIC Volkswagen, and Cadillac had already started price reduction activities. Among them, NIO, as a new force in car manufacturing, had the most obvious effect. After announcing a price reduction of 30,000 yuan for the entire NIO lineup in June, its sales in July immediately soared, increasing from the previous monthly sales of five to six thousand vehicles to over 20,000 vehicles in July. This also made other car companies see the benefits of price reduction on sales, so they decided to follow suit.

On the other hand, current automobile inventory in China is still at a high level. According to the “China Automobile Dealer Inventory Warning Index Survey” released by the China Automobile Dealers Association, in July 2023, the inventory warning index for Chinese automobile dealers was 57.8%, an increase of 3.4 percentage points year-on-year and 3.8 percentage points month-on-month. Looking at the sub-indices of inventory warning for dealers, the inventory in July increased month-on-month, while market demand, average daily sales, and business conditions all showed a month-on-month decline.

China Automobile Dealer Inventory Warning Index Survey

In recent years, it is obvious that automobile dealers have a heavy burden. In addition to the heavy workload mentioned above, new car prices have dropped significantly, resulting in low gross profit margin for bare cars and insufficient demand and circulation of funds, making their survival situation less optimistic. The report shows that in 2022, only 29.7% of dealers were profitable, and nearly half of the dealers were in a loss state, leading many dealers to choose to exit the network. In order to ensure the survival of dealerships, many car companies have to attract more attention by reducing prices.

However, how much positive impact can car companies bring to sales through a new round of price wars is still unclear. But from previous years’ situations, car companies would spend a lot of effort to seize the “golden September and silver October” period each year. Price reduction is one of the methods. In addition, many models including BYD Song L, Zhi Ji LS6, NIO EC6, FCB-P5, Haval M6, and many others will be unveiled at the Chengdu International Auto Show to be held at the end of August. Most of these models are expected to be officially launched in the second half of this year. The appearance of many heavyweight new cars will undoubtedly make the automotive market in the second half of the year more lively, but this gives consumers another reason to wait.

BYD Song L, which will be unveiled at the Chengdu Auto Show

Fortunately, since the second half of 2023, many regions have successively introduced policies to promote automobile consumption, such as Changsha in Hunan, Changchun in Jilin, Haikou in Hainan, Jinjiang in Fujian, and Huairou in Beijing, which have all increased automobile consumption subsidies. On July 21, the National Development and Reform Commission, the Ministry of Commerce, and other thirteen ministries and commissions also issued the “Several Measures to Promote Automobile Consumption”. On July 31, the country officially issued the “Measures to Restore and Expand Consumption”, in which automobile consumption was also highlighted.

In the subsidies provided by car companies and local governments, the domestic automobile market in the second half of the year may break away from the previous months of sluggishness and show signs of gradual recovery. However, for consumers, as automobiles are non-essential goods, there are still many other expenses with higher priority than them. Whether they can truly impress the majority of consumers who are in a wait-and-see attitude through quality and price depends on what car companies will do.

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