Cui Dongshu: Autumn price war cools down, end-of-year car market will return to sales promotion increase.

The secretary-general of the China Automobile Dealers Association, Cui Dongshu, stated in an article that from January to August 2024, a total of 173 domestic market brands reduced their prices, exceeding the total number of 150 models for the entire year of 2023 and also surpassing the total number of price reductions before 2022. Among them, 61 conventional fuel vehicle models reduced their prices by an average of 32,000 yuan, with an average price reduction rate of 11%, while 63 pure electric vehicle models reduced their prices by an average of 32,000 yuan, with an average price reduction rate of 15%. As the autumn price reduction wave gradually stabilizes, the automobile market will gradually return to a normal competitive situation of promoting sales growth. At the same time, the promotion subsidies for national scrappage renewal are being strengthened, and with the market recovering, the pull effect on the automobile market is very obvious, thereby alleviating the pressure of price wars, and the auto market entering a good state of continued strengthening towards the end of the year. I. Overall price reduction tracking Analysis of the lowest prices of vehicle models Currently, the main focus of price competition is to directly break through the lower limits of the original prices, rather than the model of adding features without reducing prices. Therefore, the main focus of the research is on new car models that break through the lower limits of the prices in the previous period, which is the narrow definition of price reduction behavior. Some new car models started out very cheap in the first two years after launching, then increased in price, and are now announcing price reductions. Although they have not exceeded the lowest price when they were launched, in order to reflect the phenomenon of price reduction, they are also counted as price reductions in this analysis. Due to multiple price adjustment actions for some power-specific vehicle models within the year, the number of models is not simply cumulative, but a combination of duplicate models. As of August, there were a relatively large number of price-reduced vehicle models, mainly new energy vehicles. The price reduction follow-up for petrol vehicles was more significant in March and July, but still within normal range. The scale of price reductions from January to August 2024, with 173 models, has already exceeded the total scale of 150 models for the entire year of 2023, and has significantly surpassed the total scale of 95 price reductions in 2022. The main influence on price reductions is new energy vehicle models such as pure electric and plug-in hybrids, with fewer price reductions for petrol vehicles. In 2024, 26 plug-in hybrid vehicles reduced their prices by an average of 21,500 yuan with an average price reduction rate of 13%; 63 pure electric vehicle models reduced their prices by an average of 32,000 yuan with an average price reduction rate of 15%; 12 extended-range vehicle models reduced their prices by an average of 17,000 yuan with an average price reduction rate of 7%; 10 hybrid vehicle models reduced their prices by an average of 13,000 yuan with an average price reduction rate of 11%. In 2024, 61 conventional fuel vehicles reduced their prices by an average of 32,000 yuan with an average price reduction rate of 11%. Monthly price reduction tracking In terms of the pace of price reductions, the overall price reductions in 2023 were relatively balanced, but the price reductions in 2024 reached a very strong level in March and April, with 24 models reducing their prices in February, 53 models in March, and 43 models in April. The number of price-reduced models from February to April is also a remarkable level compared to history, reducing to 29 models in August. Monthly price reduction tracking for various brands The price reduction wave in March-April 2024 was relatively strong, averaging 48 models per month, with a decrease to 12 models in May-June, and rising again to 26 models per month in July-August. The indigenous new energy vehicles and new forces in August did not reduce prices much, but petrol vehicles saw a strong reduction in prices from May to July. II. Automobile market promotion tracking Trends in promotion of new energy vehicles The promotion of new energy vehicles has gradually reached a high level. Promotion has continued to increase in recent months, with a significant decrease in promotion intensity after April due to price reductions. With the introduction of new models after the spring price reduction, promotions are expected to decrease, and they have returned to normal promotion levels after September 2023. Trends in promotion of petrol vehicles Promotion of traditional petrol vehicles increased significantly in August 2023 and relatively decreased by 18.2% in February 2024, rising again from March to August, reaching a recent high of 22%. Trends in promotion of luxury vehicles Although the upgrade in consumption drives strong demand for high-end vehicles, the diversion of new energy vehicles has led to a continuous increase in the promotion of luxury vehicles to 25.1% in July, reaching a historical high. With BMW reducing production to stabilize prices, promotion of luxury vehicles decreased to 24.3% in August, resulting in a loss in GDP. Trends in promotion of mainstream joint venture vehicles Promotion for joint venture vehicles has increased significantly from a low of 13% in 2023 to a further increase this year, exceeding 22.9% in August. Trends in promotion of indigenous petrol vehicles Promotions for indigenous automakers have been relatively stable in recent months. With promotions for new energy vehicles from indigenous brands being less than petrol vehicles and an increased share in exports, the overall promotion remained relatively stable. III. Tracking of specific price-reduced models Analysis of plug-in hybrid price-reduced models In 2024, the average price reduction for plug-in hybrid models was 21,500 yuan, with an average price reduction rate of 13%. The intensity of price reductions was mainly seen in high-end individual models and low-end models. High-end models with higher price reductions have low sales, while low-end models with higher price reductions have large sales volume. This reflects the intense competition in plug-in hybrids, and the price reductions have been sustained for a long time, with the continuous reduction in nearly two months having a significant impact. Analysis of pure electric vehicle price reductions In 2024, the average price reduction for pure electric vehicle models was 32,000 yuan, with an average price reduction rate of 15%. The overall scale of price reductions for pure electric vehicles is also significant, especially with price reductions of over 20% for some models, combined with adjustments in some models, the intensity is still remarkable. Analysis of extended-range vehicle price reductions In 2024, the average price reduction for extended-range vehicle models was 17,000 yuan, with an average price reduction rate of 7%. The price reductions for extended-range vehicles were relatively moderate, at an average of about 7%, with some price reductions being more symbolic. Overall, the competition for extended-range vehicles is still relatively mild, with only high-end models facing relatively fierce competition. Analysis of conventional hybrid vehicle price reductions In 2024, the average price reduction for conventional hybrid vehicle models was 13,000 yuan, with an average price reduction rate of 11%. The price reductions for hybrids were more reactive, testing whether there could be a significant increase in sales. Analysis of petrol vehicle price reductions In 2024, the average price reduction for conventional petrol vehicle models was 32,000 yuan, with an average price reduction rate of 11%. Due to the larger price reduction intensity of imported petrol vehicles, the average price reduction amount was higher. Petrol vehicles are gradually following the price reductions of new energy vehicles, with some mid-to-high-end models showing strong price reductions, with all parties observing the loss in price reductions and the effect on sales growth.