Since last year, the "price war" between car companies has intensified. In 2024, this "price war" will spread to the new car market. At the new car launch, car companies competed to advertise themselves as "the lowest price in the same class", as if low price had become the only competitive advantage. However, can this strategy really give a long-term market advantage? The answer is clearly no.
Wei Jianjun, chairman of Great Wall Motors, put forward a clear point of view in an interview, calling on the industry not to participate in disorderly price wars and vicious competition, but to pursue a bottom-line, credibility and quality market share. Wei Jianjun's remarks are undoubtedly a profound reflection on the current status quo of the industry.
"There is no car that cannot be sold, only the price that cannot be sold", this sentence has become a portrayal of the involution of Chinese car prices. Every time sales fall, a wave of price cuts follows, but can this short-term stimulus really solve the underlying problem? Long-term low-price competition will not only erode brand value, but also lead to a decline in product quality, and ultimately damage the interests of consumers.
In fact, this involution of competition has led to serious industry consequences. According to the report of the China Automobile Dealers Association, as of August this year, the upside-down data of dealers' purchase and sales has reached a maximum of -22.8%, and the overall retail loss of the new car market is as high as 138 billion yuan. Some old dealer groups, such as Guangdong Yongao Group and Senfeng Group, have even fallen into trouble due to financial crises, and Guanghui Group has been delisted due to serious financial difficulties.
In the capital market, car companies that have not yet achieved profitability are constantly raising funds in exchange for cash, but this cash-burning model is clearly unsustainable. New energy vehicle brands such as Weilai, Xiaopeng, and Nezha Automobile have attracted much attention in the capital market, but their huge losses are also shocking. NIO has lost 86.6 billion yuan in 6 years, Xiaopeng has a cumulative loss of 38.4 billion, Nezha Automobile has lost 18 billion yuan in 3 years, and AVATAR, a subsidiary of Changan, has a cumulative loss of more than 8 billion.
Behind these figures, it is not only the financial difficulties of car companies, but also the crisis of the entire automotive industry. Price wars and involution competition have made the industry pay a heavy price. Under the wave of car company closures, consumers are facing not only the lack of vehicle maintenance and after-sales service, but also the sharp decline in the value of vehicles.
In this context, the industry urgently needs to reflect and adjust. Car companies must jump out of the cycle of low-price competition and find new development paths. This could mean a greater focus on product quality, technological innovation, and brand building, rather than simply relying on price wars. At the same time, the industry also needs to be more rational and long-term planning to avoid short-term actions to damage long-term development.
At present, people in the industry have different voices on the "price war" of the market, here the tram wants to express that it can be rolled and supported, so as to motivate car companies to progress and promote the development of the automobile industry, but the premise is to "benign volume", not the kind of play, do not advocate "hurt the enemy a thousand, self-damage eight hundred" play, lose money and make money, and eventually will only end up in a lose-lose situation.
