"BYD will engage in price wars in the next 3-5 years, or in a certain segment, and BYD is fully prepared for this." This was Wang Chuanfu's speech at the 2023 semi-annual performance meeting.
As BYD launched its "first shot of year-end promotion" in November, the "price war" that has been going on throughout the year in the domestic auto market also reached its final climax at the end of the year.
FAW Toyota, Leap Motors, Jiyue Automobile and many other brands released various discounts in early December. In addition, Lexus ES series, SAIC Volkswagen Tiguan and other models have recently launched large-scale preferential policies.
is coming to an end, and major car companies have significantly increased their promotional efforts to launch the final sprint for the full-year goals.
price reduction "impulse"
According to recent observations by TMTpost App, BYD has conducted multiple rounds of large-scale preferential promotions since November. First, in early November, BYD Ocean Network reduced the prices of five models, ranging from 5,000 yuan to 18,000 yuan.
On November 24, BYD took advantage of the opportunity of its 6 million vehicles to roll off the assembly line to expand the cash discount range for Qin, Han, Tang, Song and other models under Dynasty.com to 3,000 yuan to 10,000 yuan. Regarding the price reduction promotion in November, BYD's official response was "This promotion is limited to November, not an official reduction. The purpose of the promotion is to accelerate the conversion of oil to electricity."
However, after entering December, BYD's series of operations directly It is equivalent to "withdrawing the preamble". On the first day of December, Biya officials couldn't wait to launch large-scale limited-time discounts on some of its Dynasty and Ocean models. Among them, the starting price of the popular model Qin PLUS DM-i has dropped to 89,800 yuan after a discount of 10,000 yuan.
In fact, it is not difficult to see that the main reason why BYD has successively cut prices is because of the annual sales target of 3 million.
From January to November this year, BYD's cumulative sales reached 2.6834 million vehicles, which is 316,600 vehicles short of its sales target of 3 million vehicles set at the beginning of the year (refer to the official data released by BYD for the statistical caliber here). Stimulated by the discounts in November, BYD sold a total of 302,000 vehicles that month.
But this performance will be extended to December. If BYD's sales growth rate continues to be 0.33% in November, then there still seems to be a slight gap between the target of 3 million vehicles. Because of this, BYD's price reduction promotions have also been extended to December, and the new discounts are even greater.
Comparing the preferential policies of these two months, we can see that compared with November, BYD added discounts on some models in December and increased the intensity of discounts. According to feedback from BYD’s front-line sales staff to TMTpost App, this round of price reductions by BYD is still continuing, with some models offering even greater discounts than in November.
As for whether the company can complete 3 million sales before the end of the year, the above-mentioned sales staff did not seem to show any pressure. In his view, annual sales of 3 million are now just a step away. BYD also chose to increase the price reduction for a limited time. Although the method is a bit crude, it is also the most effective.
The pricing of Song L is “surprising”
As BYD’s final product this year, the pricing of Song L is beyond the “expectations” of many people, including BYD itself.
Earlier, when seeing the pre-sale price announced by BYD Song L, many people's first impression was that it was "too expensive". Its pre-sale price of 220,000-280,000 yuan was obviously beyond many people's expectations. In fact, if you really want to talk about it, BYD has rarely given such an "expensive" impression in recent years. Although
has the word Song in its name, the price difference between Song L's price and Song PLUS's price of 169,800-209,800 is still obvious. In Dynasty.com, the Song family is BYD's most widely used product, including Song Pro, Song PLUS and Song MAX. It has always been BYD's leading car series because of its rich variety of models and high cost performance.
At that time, many people believed that BYD’s pre-sale price was not to expand competition in this segment. Instead, it was more willing to rely on its previously accumulated high sales volume and high brand premium to carry out high-end branding through this car. to “cash out”.
However, when BYD Song L was officially launched, its starting price was a full 30,000 yuan lower than the pre-sale price. On December 15, BYD's new hunting SUV - Song L was officially launched, with a total of 5 configurations launched, with a price range of 189,800-249,800 yuan.
According to the official introduction, Song L adopts BYD’s popular e3.0 platform, CTB battery body integration and Yunnan-C intelligent damping body control system in its core technologies, which respectively correspond to the vehicle’s driving kinetic energy, safety and comfort. , and in terms of intelligence, it is equipped with DiLink intelligent cockpit and DiPilot intelligent assisted driving system.
In addition, as a model positioned as a hunting SUV, BYD Song L naturally has some eye-catching configurations. Mixed tires with narrow front and wide rear, frameless doors, and adaptive electric rear wing not only add points to the appearance, but also reduce energy consumption. Improving driving stability helps.
Taken together, BYD tends to be more traditional in the design of its pure electric SUV models, which are more or less divorced from the popular sports aesthetic. The Song L launched this time adopts a sporty fastback shape, and the combination of sports elements such as an electric tail wing is the biggest feature of this car, and it is also what distinguishes it from BYD's traditional car-making concept.
But in the final analysis, the biggest bargaining chip of this car is still the price.
From the perspective of market prospects, first of all, internally, the appearance style of the Song L, which is positioned as a hunting SUV, and the Denza N7 are relatively similar, and various technologies are also in common, including the same model of motors. But in fact, there is a certain gap in the brand positioning of Dynasty.com and Denza. The Denza N7 and Song L, priced at 301,800-379,800, retain enough "safe space".
Externally, the domestic pure electric SUV market of RMB 200,000 to RMB 300,000 cannot bypass the Tesla Model Y. Its comprehensive strength is indeed comprehensive enough. After multiple rounds of price adjustments, the price/performance ratio has also been improving. Many consumers are even waiting for the new Model Y to be launched next year.
Regarding this, some netizens joked: "At the beginning of this year, Tesla was cutting prices, and BYD was raising prices. By the end of the year, BYD was cutting prices, and Tesla was raising prices." Combined with the end of this year, BYD and Tesla In order to create a "sense of contrast" in the selling price, Song L with this kind of pricing may have more capital to "turn the table".
However, what cannot be ignored is that in fact, BYD's wave of price cuts at the end of the year also "collapsed" its own stock price due to successive price cuts.
On November 24, when news of the second wave of price cuts spread, BYD (002594) fell sharply due to heavy volume. It fell 5.24% as of the close. The stock price closed at 216.85 yuan/share, a new low in a year and a half. By the morning of November 30, the stock price had fallen below the 200 yuan mark and returned directly to the level of 2021. At that time, BYD's annual sales were only about 700,000 vehicles.
Obviously, the news that 6 million vehicles were rolled off the assembly line that day failed to retain the hearts of investors in the secondary market. After entering December, BYD's new car promotions are still continuing, which just confirms the concerns of the secondary market.
As the stock price has been falling, on December 6, BYD issued an announcement stating that Wang Chuanfu, BYD’s actual controller, chairman and president, proposed to repurchase the company’s A shares for 200 million yuan in order to stabilize the confidence of the capital market.
It is true that BYD is familiar with the strategy of reducing prices in exchange for scale, but what is reflected in the secondary market is the continuous decline in stock prices. Many investors believe that BYD's era of large-volume and high-growth may be coming to an end. Moreover, BYD has not shown sufficient industry leadership in intelligence.
In other words, in front of BYD, on one side is the bottom line of price that continues to drop, and on the other side is the need to stand out in terms of intelligence.
Intelligent needs to break through
The price of Song L is indeed attractive enough, but intelligent driving and other sectors are still BYD's "shortcomings". For comparison, the entry-level Zhiji LS6, priced at 214,900 yuan, is already equipped with lidar and OrinX chips; while the Xpeng G6, priced at 229,900 yuan, is equipped with dual lidar and dual OrinX chips.
But this time Song L, the official has made it clear that a version with lidar will not be launched for the time being. Although driving assistance functions have become popular in recent years, BYD has always adhered to its own pace. Whether it is due to cost considerations or based on user needs, it has not "radically" followed the market trend. In short, Song L did not have an advantage under the intelligent offensive of many opponents.
Wang Chuanfu has emphasized on many occasions that the first half of smart electric vehicles is electrification, and the second half is intelligence. But judging from the current market volume, the protagonist of intelligence in the car manufacturing industry this year is not BYD, but Huawei.
In the second half of this year, Huawei, which has repeatedly reiterated that it does not build cars, stole the show in the field of new energy vehicles. Since the release of Wenjie's new M7, Huawei's automotive products have continued to receive strong attention from the outside world.
As Huawei's car BU has become independent, it has issued equity invitations to many car companies such as Cyrus, Chery, JAC, and BAIC. In the recent capital market, the stock prices of listed car companies that cooperate with Huawei are almost all rising.
Perhaps before this, there was no obvious "intersection" between BYD's and Huawei's products, but as Huawei's car BU business moves toward independent operation, both parties will inevitably compete in the main price segment of less than 200,000 yuan.
BYD, which has "a small target per day", is pushing the scale effect and bicycle cost reduction to the extreme. But at the same time, BYD's upward breakthrough at the brand level still faces many obstacles. According to BYD's financial data for the third quarter of this year, the proportion of mid-to-high-end models worth more than 200,000 yuan, represented by Han, Tang, and Denza, accounted for only 22% in the third quarter, a decrease of 3.2 percentage points from the previous quarter.
In recent years, BYD has successively launched sub-brands such as Denza, Fangfangbao, and Yangwang in an effort to fill its gaps in the high-end market. However, before the delivery of Fangbaobao 5 and Yangwang U8, only Denza D9 can bear part of the sales burden. . At present, BYD's pure electric products are still mainly two small cars, Seagull and Dolphin, both priced at less than 150,000 yuan.
At this time, the Song series, as BYD's leading car series, has become stronger in its "willingness" to seize more shares in the mid-to-high-end market. At present, with its excellent gross profit margin performance, BYD can give Song L a certain price advantage and thereby win more market share.
But from a long-term perspective, if BYD cannot quickly establish its own "moat" for intelligent technology, its growth potential may continue to weaken.
(This article was first published on Titanium Media App, author | Chang Xiao, editor | Zhang Min)
