Source: Financial Services Association Author: Zhang Yipeng

Since BYD launched the first “Honor Edition” in the Year of the Dragon, the “price war” in the car market has spread to mid-March. According to incomplete statistics, up to now, more than 60 models from more than 20 brands have joined the team, including traditional fuel vehicle brands.

On March 14, NIO adjusted the BaaS battery rental service price system. After the adjustment, when purchasing a standard battery pack and using BaaS, the vehicle price was reduced by 70,000 yuan, and the monthly service fee was 728 yuan/month; if a long-life battery pack was purchased and BaaS was used, the vehicle price was reduced by 128,000 yuan, and the monthly service fee was 1,128 yuan/month. Prior to that, the above two service fees were 980 yuan and 1,680 yuan respectively, a decrease of 2,532%.

The industry generally believes that this move appears to be an adjustment to the battery rental service price system; it is actually a “disguised” price cut by NIO in response to the increasingly heated price war in the car market. “Although our intention was not to cut prices, in today's market environment (this adjustment) is very cost-effective for new car users.” Li Bin, founder, chairman and CEO of NIO, said.

On the same day, Dongfeng Yipai, one of Dongfeng's top three autonomous passenger car brands, brought the first model, the “ePI007,” and the car's “go on sale and get a discount” strategy attracted much attention. Dongfeng Yipai said that from March 14 to April 30, there is a limited-time cash discount of 30,000 yuan for the epi007 pure electric model. Users who have made a reservation before March 14 can choose not to use the big benefits released on February 14, but choose the new benefits plan on March 14 and enjoy the insured benefits.

Rantu, another independent brand owned by Dongfeng Motor, recently launched a “luxury supplement” policy. In March, it began a limited-time replacement subsidy of 1 billion yuan. Among them, the new Rantu Dreamer, Xinlantu FREE, and Rantu Chase Guang have replacement subsidies of up to 30,000 yuan, 20,000 yuan, and 50,000 yuan respectively.

Rantu's move is unquestionably responding to the country's call for a “trade-in” policy. On March 13, the State Council issued the “Action Plan to Promote Large-scale Equipment Renewal and Consumer Goods Trade-In”. Develop automobile trade-ins, increase policy support, clear circulation blockages, and promote gradual automobile consumption and renewal consumption. A few days ago, the reporter learned from a number of industry people that policy rules for implementing the automobile trade-in action plan and standards are being formulated. If progress goes well, they are expected to be introduced in the second quarter.

Independent brands have taken the initiative, and joint venture brands have spared no effort to follow suit. According to FAW-Volkswagen's latest car purchase policy, all models can enjoy a replacement subsidy of up to 21,000 yuan, a maximum 5-year zero interest rate, up to 100% commercial insurance subsidy, etc.; Changan Mazda shouted the slogan “oil is better than electricity”. After adding up the car purchase vouchers, the starting price of the Mazda 3 Onksera and Mazda CX-5 was as low as 59,800 yuan and 95,800 yuan respectively.

Judging from the car market terminal situation, sales in mid-early March increased compared to the same period last year. According to the latest data from the Passenger Transport Federation, from March 1 to 10, the passenger car market retailed 355,000 vehicles, up 4% from the same period last year, down 4% from the same period last month. Since this year, retail sales of 3.497 million units have increased 16%; the NEV market has retailed 154,000 vehicles, up 39% from the same period last year, up 64% from the same period last month, and has sold 1,214,000 vehicles since this year, up 38% year on year.

In the context of the accelerated implementation of the “trade-in” policy, Cui Dongshu, Secretary General of the Passenger Transport Association, said that the recent introduction of trade-in incentives in Shanghai and other regions has had a good effect on guiding consumption. “The trade-in policy is a complicated task. It takes a certain period of time to launch and implement it. In the past two months, the car market still needs to pay attention to the increase brought about by incentive policies such as regional trade-in. ”

“Although continuous price cuts by some car companies have brought about a serious short-term wait-and-see phenomenon, the price reduction cycle will eventually be completed, so the market is gradually recovering.” Looking ahead to the first quarter, Cui Dongshu believes that due to the new round of price cuts after the holiday season, a certain increase in customer orders will provide a certain guarantee for the March turnover. Sales are expected to increase by more than double digits year over year in the first quarter.

However, a recent research report by global management consulting firm McKinsey shows that although the price war is intensifying, the direct effect on consumers is limited. 80% of consumers say that the price war has not had a positive impact on their car purchase decisions. “Although the price war has had a stimulating effect on the Chinese car market as a whole, the magnitude is extremely slight. Furthermore, the proportion of people with 'neutral' and 'negative' views was over 80%, meaning that most respondents did not believe that the price war had a positive effect on their car purchase decisions, which undoubtedly shows that the overall effect of the price war was extremely limited.” McKinsey said in the report.

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