Smart and Sustainable Electric Mobility
Xpeng believes that expanding volumes is critical, and will continue to prioritize volumes into 2024, as well as improving profitability through cost reductions.
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Model Y Long Range AWD price in China is now 304,400 yuan (42,930 USD).
The post Tesla showing confidence in China: Third slight price hike in two weeks appeared first on CarNewsChina.com.
The statement in the pledge, "not to disrupt the fair competition order of the market with abnormal prices," was inappropriate and inconsistent with the principles of China's anti-monopoly law, the CAAM said.
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SAIC-Volkswagen is offering discounts of up to RMB 42,000 for the ID.3, while FAW-Volkswagen's ID.6 CROZZ is priced at RMB 63,000 less than its website shows.
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Auto industry players should not disrupt fair competition with abnormal prices and should avoid cutting prices in a reckless manner, a MIIT official said.
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Price wars are clearly not what China's main industry regulator wants to see.
An official from China's Ministry of Industry and Information Technology (MIIT) said at the 2023 China Auto Forum in Shanghai on July 6 that participants in the country's auto industry should not compete with abnormal prices, according to a report on state broadcaster CCTV today.
So far this year, the Chinese auto industry has seen the largest wave of price cuts in its history, including more than 100 models from more than 30 brands, some at any cost, the report noted.
In response to the phenomenon, the MIIT source said that the development of China's auto industry has entered a new phase, with new energy vehicles (NEVs) forming a certain lead and auto companies should regulate their marketing activities, the report said.
Auto industry players should not disrupt fair competition with abnormal prices and should avoid reckless price cuts, while strengthening technological innovation and improving product quality, the MIIT official Miao Changxing was quoted as saying in the report.
Yesterday, the China Association of Automobile Manufacturers (CAAM) and 16 major automakers jointly signed a pledge to maintain fair market order in the auto industry.
The 16 car companies include BYD, Nio, Li Auto, Xpeng, Tesla, SAIC, Geely and Great Wall Motor, who pledged to maintain a fair competition order and not to disrupt the order in the market with abnormal prices.
The initiative is just the beginning, and further restraint on bad behavior, including malicious price cuts, will depend on self-regulation and regulatory means, Fu Bingfeng, executive vice-president and secretary general of the CAAM, was quoted by CCTV in the report today.
Separately, Xu Changming, vice director of the National Information Center, said yesterday at the 2023 China Auto Forum that Tesla's average profit per vehicle is high enough that it has ammunition if it wants to fight price wars.
Tesla has previously cut its price in China by RMB 30,000 yuan ($4,140), and its average profit per vehicle is $10,426, leaving room for a 40,000 yuan price cut if the price war continues, Xu said, according to a video circulating on social media.
The calculation is based only on Tesla's 1.31 million global deliveries last year, and if it reaches its 1.8 million delivery target this year, then costs are expected to fall further, Xu noted.
Tesla's average profit per vehicle is 8.5 times that of BYD, whose figure last year was RMB 8,854 yuan per vehicle, according to Xu.
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Premium EV market in China poses significant challenges even for Tesla
The post Tesla slashes prices of premium models by 45,000 yuan (6,204 USD) in China appeared first on CarNewsChina.com.
Discounts on passenger cars in China continued to expand in April, but the industry is seeing some positive changes heading into May.
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The price wars that erupted in the Chinese auto industry in March carried over into April. However, analysts see fewer car discounts heading into May.
Discounts on passenger cars in China continued to expand in April, but the industry saw some positive changes heading into May, with price competition, especially for fuel vehicles, expected to ease, said CITIC Securities analyst Zhang Ruohai's team in a research note today.
These changes include the fact that some automakers are no longer offering increased discounts to dealers, and have even scaled back compared to the first quarter, according to the team.
With China allowing some fuel models based on existing emission standards to extend their sales period by six months until the end of this year, there is much less urgency for these models to clear inventory in the short term, the team noted.
In addition, inventory levels in the Chinese auto industry fell in April, with dealer inventory levels returning to a relatively balanced position, the team said.
From January to April, discounts offered by the Chinese auto industry were generally increasing, with actual selling price to manufacturer guide price ratios of 91.3 percent, 92.4 percent, 90.8 percent and 90.2 percent, respectively, according to an indicator compiled by the team.
This means that in addition to the price pickup in February, discounts expanded in March and April, the team said, adding that the indicator was 88.1 percent and 87.3 percent for fuel cars and 96.84 percent and 96.78 percent for new energy vehicles (NEVs) in the past two months, respectively.
Against the backdrop of overall weak consumer demand for cars, the price wars had a boost to sales of some models, but depressed total sales as consumer wait-and-see sentiment increased, according to the team.
In March, when the price war was at its most intense, Chinese passenger car retail sales were 1.587 million units, up 0.3 percent year-on-year and up 14.3 percent from February, according to the China Passenger Car Association (CPCA).
In April, China's passenger car retail sales were 1.63 million units, up 55.5 percent year-on-year and up 2.5 percent from March.
From May 1 to 14, China's passenger car retail sales were 706,000 units, up 55 percent year-on-year and up 24 percent from the same period last month, according to data released yesterday by the CPCA.
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Price war has been the most talked about topic in China's auto industry this month, and the imminent implementation of a new emissions standard is seen as a major factor.
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The imminent implementation of a new emissions standard in three months is seen as a major factor behind the price war launched by internal combustion engine (ICE) automakers this month. Now, these automakers may be able to get some respite.
China's policy on extending the sales period for vehicles built to the 6a emissions standard may be announced soon, National Business Daily reported today, citing Shen Jinjun, president of the China Auto Dealers Association (CADA), as saying at a forum.
A government document on the switch to the China 6b standard and the extension of the sales period for 6a-compliant models will be released soon, Shen said, without revealing any more information.
China released the final rule for stage 6 light vehicle emission limits and measurement methods (China 6 standard) in December 2016, a new standard that combines best practices from European and US regulatory requirements.
The standard is being implemented in two phases, with the 6a standard already taking effect on July 1, 2020, and the 6b standard coming into effect on July 1, 2023.
During this month, price war has been the most talked about topic in the Chinese auto industry, and the upcoming entry into force of the 6b standard is seen as an important factor.
There are still some older models on the market that do not meet China 6b emissions regulations, and the de-stocking of these models could have an impact on production, sales and prices in the auto industry, a team from CITIC Securities said in a March 13 research note.
In early March, authorities in Hubei province joined forces with many local car companies to offer subsidies to consumers for car purchases, with some models being subsidized by as much as 90,000 yuan ($13,060). This was seen as the beginning of the massive outbreak of the price war.
Subsequently, several brands, including Volkswagen and BMW, announced similar large discounts. At the same time, some car companies made it clear that they would not participate in the price war, trying to dispel the wait-and-see sentiment of potential consumers.
The price war has had an unprecedented impact on China's auto industry, and on March 22, the China Association of Automobile Manufacturers (CAAM) called on all parties to return to rationality and bring order to the market.
On March 23, China's Auto Dealers Chamber of Commerce (CADCC) called on regulators to delay the implementation of the China 6b emissions standard.
Since the beginning of the year, the CADCC has received feedback from many auto dealer groups that they are under significant pressure to survive because of the impending full implementation of the China 6b emissions standard.
A study covering nearly 100 auto dealer groups showed that nearly 98.89 percent of them strongly recommended that China delay the implementation of the China 6b emissions standard until January 1, 2024, according to the CADCC.
These dealer groups suggest that regulators allow sufficient switchover time for car companies and dealers to deal with the existing inventory of vehicles that do not meet the China 6b emissions standard.
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China's transition to new emission standard: How will this affect auto market?
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Reducing prices to deal with inventory and properly recover costs are normal business practices, but these tactics should not turn into price wars, the CAAM said.
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The price war is one of the most talked-about topics in China's auto industry this month, creating operational challenges for many car companies. Now, an industry association is calling for a return to rationality for all parties to bring order to the market.
The hype about this round of price cuts in China's auto industry should be cooled down as soon as possible so that the industry can return to normal operation and ensure healthy and stable development throughout the year, the China Association of Automobile Manufacturers (CAAM) said in an article posted on its WeChat account today.
In the article, titled "The current round of auto promotions should be treated rationally and the market should return to normal order as soon as possible," the CAAM argues that price wars are not a long-term solution and the auto market should return to normal order as soon as possible.
In the fourth quarter of last year, especially since the Covid outbreak in China in December, the pace of auto production and sales has been seriously affected, the article noted.
The overall sales of China's auto industry dropped significantly in January-February, inventories rose sharply, and automakers saw their operating pressure increase and took various measures to reduce inventories, the article said.
Some local governments have launched pro-consumption policies aimed at boosting local auto consumption and easing difficulties for car companies.
The reasons for this round of short-term promotions are multifaceted, and the companies offer a lot of discounts on models that are mostly long-stocked, old and stagnant inventory cars that have previously been available at considerable discounts, the CAAM said.
However, some marketing in the sales channels exaggerated price reductions to attract attention in order to increase customer acquisition, which is easily misleading, the CAAM said.
The CAAM calls for proper marketing and objective and accurate media reporting.
With the accelerated pace of transformation of the auto industry, traditional car companies are under the dual pressure of maintaining stable operations and making the transformation, with weaker profitability, the CAAM said.
Price cuts to deal with inventory and proper cost recovery are normal business measures, but these means should not turn into price wars, the CAAM said.
Price wars don't last, and value for money is the eternal law of business, according to the article.
Automakers should look at the long term and make more efforts in product technology, quality, service and brand power. Local governments should take the right approach in the process of stabilizing growth and promoting consumption, the article said.
"The government, enterprises and the media should look at this rationally and work together to maintain market order," the CAAM said.
The article also mentioned that China's new energy vehicle (NEV) sales reached about 7 million units last year, and the number is expected to reach 9 million in 2023.
However, internal combustion engine (ICE) vehicles are also accelerating technology upgrades and constantly adapting to changes in market demand, the CAAM said, adding that NEVs and ICE vehicles will coexist for a long time to come and can meet different consumer needs.
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The offer has a deadline of April 30, and SAIC-Volkswagen plans to offer up to RMB 3.7 billion in subsidies for car purchases.
(A screenshot from SAIC-Volkswagen's website shows the automaker's marketing of discounts.)
A Volkswagen joint venture in China has started offering official discounts as the price war in the Chinese auto industry continues.
SAIC-Volkswagen is offering limited-time discounts of up to RMB 50,000 yuan ($7,250) on its entire model lineup, the Volkswagen-SAC joint venture announced yesterday.
The offer has a deadline of April 30, and SAIC-Volkswagen plans to provide up to RMB 3.7 billion in subsidies for car purchases, according to a poster on its website.
The campaign involves 20 SAIC-Volkswagen models, the vast majority of which are conventional internal combustion engine vehicles, that can enjoy discounts ranging from RMB 15,000 to RMB 50,000.
The Volkswagen Phideon, with an official guide price of RMB 343,000 to RMB 449,000, received an RMB 50,000 discount, while most other models received discounts of RMB 25,000 to RMB 30,000.
SAIC-Volkswagen is offering discounts of RMB 20,000 for the ID.3 pure electric vehicle and RMB 30,000 for both the ID.4 X and ID.6 X.
In addition to the cash discounts, SAIC-Volkswagen is also offering trade-in benefits of up to RMB 12,000, as well as a zero-interest entitlement for 2-to-5-year loans.
One of the reasons SAIC-Volkswagen chose to cut prices is that the company is responding positively to China's policies as well as the consumer environment, sources at the automaker were quoted as saying in a report by Beijing News today.
On the other hand, SAIC-Volkswagen was able to get closer to consumers after the marketing changes and respond more quickly to consumer feedback, the source said.
Last week, both SAIC-Volkswagen and FAW-Volkswagen, another Volkswagen joint venture in China, began offering discounts of up to 40,000 yuan on ID. family models as the price war in China's auto industry intensified.
Volkswagen is one of the top car companies in China in terms of vehicle sales. SAIC-Volkswagen's retail sales in February were 74,013 units, down 7.7 percent from a year earlier, with a 5.3 percent share of the Chinese auto market, according to data released earlier this month by the China Passenger Car Association (CPCA).
FAW-Volkswagen sold 110,511 units in February, up 5.3 percent year-on-year, with an 8 percent share in China.
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