Can't go back to 2004

There are more and more signs that the winter of the Chinese auto market is coming.

In addition to the slump in market sales data, more and more companies are joining the ranks of price warfare. A month after Shanghai Volkswagen announced the official price cut in early April, Shanghai GM came to an All-in.

On May 12th, Shanghai General Motors announced that it had adjusted the retail guide price of 40 models of the four brands of Buick, Chevrolet and Cadillac brands in a total of 40 models, with a decrease range of 10,000 to 53,900 yuan, a decrease of approximately 5% to 20%. During this period, Changan Ford, Beijing Hyundai, FAW-Volkswagen and other mainstream car companies have also adopted different promotional forms to follow up.

If the price reductions of previous car companies were more of a short-term sales promotion behavior in response to market pressure, then the downsizing of the entire series of Shanghai GM products really touched the market's sensitive nerves. With or without it is no longer a difficult multiple choice question. Failure to follow does not mean that market share will be taken away by opponents. It may not keep up in the future.

This scenario has brought people's memories back to 2004. In that year, it was Shanghai GM that spearheaded a comprehensive "price war."

2004: Price cuts push the golden decade

2004 is destined to be an unforgettable year for the Chinese auto industry. From January 1, the price cut became the main theme of the Chinese auto market that year.

According to the statistics of the year, in the first half of 2004, there were more than 45 price reductions in domestic cars, and the price reduction scope covered more than 90% of the models. On average, 25 models participated in the price reduction each month, a drop of more than 9%.

However, under the background of macro-control, the growth rate of the auto market still slowed down sharply. The year-on-year growth rate dropped from 50% in the previous year to 16%.

On May 17th, 2004, Shanghai General Motors launched a price reduction campaign for cars that was codenamed "Breakthrough 2005" - the prices of its Buick Regal series and Buick GL8 commercial vehicle were lowered, with the largest drop of 40,000 yuan. Judging from the subsequent results, Shanghai GM took the initiative in the market through this price cut action. It took the lead in the market game in the second half of the year and took the throne of the sales championship in June of that year.

On June 16, North and South Volkswagen jointly launched a price cut action code-named "Olympic Wind." Shanghai Volkswagen and FAW-Volkswagen have successively announced that they will lower the prices of the full range of products.

On August 8th, Beijing Hyundai branded a small price adjustment, and sales rose rapidly to 12,100 units in the month. Prior to this, Beijing Hyundai sold less than 10,000 vehicles per month. On September 7, Beijing Hyundai lowered its prices again. After the price cuts, Beijing Hyundai sales reached 15,570 vehicles in the month. It eventually reached the annual target of 150,000 vehicles, and it has since started the growth of "modern speed."

In addition to the deceleration in the auto market caused by macro-control, the return of auto value is also one of the important factors in the price reductions in that year. Due to the high profitability of automotive products, many home appliance companies have entered the automotive industry. At the same time, the state announced the reduction of tariffs on imported cars in 2005, which also stimulated the decline in the prices of domestic cars.

The car market price has greatly reduced the consumer demand in the domestic auto market after this year’s nearly melee price cuts. In the following six years, the average annual growth rate of the domestic passenger car market reached 29%, and in 2009 it exceeded 13 million, making it the world's largest automotive market.

2015: Price cuts hard to change the new normal trend

This year, the domestic auto market is lukewarm, and all companies should have a long-term forecast, which can be seen from the annual sales targets announced by various companies at the beginning of the year. However, the cooling rate of the market still exceeds the expectations of many people.

From January to April, one-third of the year has passed, but of the top ten companies in sales, only two companies have completed more than one-third of their annual sales. (For more details, please refer to the Automobile's Sankei.com's "Only January-April-October-October-October-Rate Completion Rates of the Two Automotive Companies Outperformed Last Year" on May 20.

Faced with this situation, many manufacturers once again released a big price cuts.

On April 6, Shanghai Volkswagen decided to cut the official prices of its two models, Polo and Touran. The total price of Touran models was reduced by 10,000 yuan, Polo models by 8,000 yuan to 10,000 yuan, and Cross Polo by 8,000 yuan. This is also the first time that Shanghai Volkswagen has announced price cuts by manufacturers since 2010.

One stone provoked thousands of layers of waves. On April 11th, Changan Ford took the first move, announcing that by April 30th, the full line of sales vehicles (except Sharp and Neo Mondeo) could enjoy car purchase and full purchase tax. Tax exemption policy. Only one day later, Beijing Hyundai launched a two-year interest-free campaign for all models except the ix25, which is equivalent to savings of 5,000 to 20,000 yuan in interest.

On April 23rd, Dongfeng Peugeot launched the "Five Free Lion" campaign on the official website. From April 20 to May 31, all models (excluding the 308S and 2008 models) can enjoy the purchase tax and the vehicle and vessel tax. The full amount of the five items of the five major projects, namely, strong insurance, licensing fees, and credit interest rates, will be exempted.

Until May 12, Shanghai GM announced full follow-up. The retail guide price of 40 models for the three major brands of Buick, Chevrolet and Cadillac brands in 11 product lines has dropped by approximately 5% to 20%.

Comparing the two price wars 11 years ago and today, there are indeed some similarities. For example, the market's growth rate suddenly slows down and the market price returns in the future. Nowadays, more and more imported cars have been made domestically, and this will affect the price of cars one by one.

Compared with 11 years ago, this year's price war also has many differences. Today's car prices are more diversified, and in addition to the official drop, tax-free, interest-free, original price buyback and other tricks are almost used all over again. This year's price war, more significance is in the promotion.

Surprisingly, the price war did not bring about an increase in sales.

After the price reduction, Shanghai Volkswagen’s April sales dropped 6% year-on-year (Volkswagen brand). Chang’an Ford also sold less than 1,800 vehicles in March compared to March. Beijing Hyundai also decreased from the 7.9% year-on-year increase in March to the same period in April. 1%.

Why is the price reduction promotion invalid?

The first is the huge difference in the market environment. 11 years ago, China’s auto market was still in its infancy, and buying a car was still an unattainable event for many people. The price cut by car manufacturers has promoted a rational return of the value of the car market and has greatly stimulated the release of market demand. From the results, this role has obviously been achieved.

In today's Chinese auto market, capacity is nearing its peak. The average annual growth rate of China's passenger vehicle market in the last 4 years is only 10%. Continuous micro-growth has been recognized as the new normal of the auto market, and the ceiling of the auto market is getting closer and closer.

In such a market environment, no one is willing to use the tactics of policing down, because the downgrade means that the standard level is lowered and it is difficult to go back. So we see more car companies choosing various kinds of promotional policies to test. Market Reaction.

If the price reduction in 2004 objectively achieved the effect of jointly expanding the size of the cake, today when the size of the cake has basically taken shape, the direct direction of the large-scale price reduction in the industry is more to let out the unqualified players.

Even if everyone has confidence in the outside world, I believe that some companies must feel the spine is cold. Those companies still adjusting are applying a classic saying: "There is not much time left for them."