Author: Tao Yanyan
Zhizheng weekly newsletter tracks the on-board insurance data of passenger cars in China. The analysis for this week is the 4th week of February 2023, specifically from February 20, 2023 to February 26, 2023.
As we enter the final days of February, we are gradually returning to a normal work state. With life returning to its pre-pandemic state, there are currently two different states of life. In the areas of dining and entertainment, everyone is enjoying the rare pleasure after three years of difficulty, while automobile sales are still in a trough and have not yet recovered.
Looking at the overall data for on-board insurance of passenger cars in China, this week’s sales volume was 337,700 units, a year-on-year decrease of 13.1% and a month-on-month increase of 9.6%. In terms of power source, the new energy vehicles performed comparatively well, with a sales volume of 112,400 units this week, a year-on-year increase of 12.6% (due to the high base effect of last year) and a month-on-month increase of 11.5%. The traditional fuel vehicles, on the other hand, performed quite poorly, with only 225,000 units sold, a year-on-year decrease of 22%, which dragged down the overall sales volume.
In the current sluggishness of automobile consumption, the group in China with purchasing power pursues innovation while also considering cost-effectiveness. Therefore, on the one hand, new energy vehicles are highly recognized, and on the other hand, their practicality is also being evaluated. From the current trend, the automobile consumption market in China should be following in the footsteps of the United States, with new car prices increasing and first-time buyers of mid- to low-end vehicles being replaced by second-hand cars.
Key Automobile Companies
The recovery rate of the following key companies differs during the tracking process.
- BYD: This week’s sales volume was 39,400 units, a year-on-year increase of 41.8% and a month-on-month increase of 6.6%.
- Tesla: This week’s sales volume was 10,000 units, a year-on-year decrease of 21.6% and a month-on-month increase of 81.0%.
- NIO: This week’s sales volume was 3,357 units, a year-on-year increase of 34.1% and a month-on-month increase of 4.2%.
- XPeng: This week’s sales volume was 1,685 units, a year-on-year decrease of 49.7% and a month-on-month increase of 15.2%.
- Ideal: This week’s sales volume was 5,387 units, a year-on-year increase of 65.4% and a month-on-month increase of 27.1%.- Challenge: This week’s sales volume of 888 is not particularly good overall.
Starting from March, it is the beginning of the adjustment strategy for the automotive industry. From the Shanghai Auto Show, it will directly enter the intense battle in 2023.
Automobile Manufacturers with High Attention
Tesla’s domestic delivery data has returned to 10,000 units. The timing of Tesla’s price reduction was not good. The first round of price reduction was not ideal due to factors such as the approach of the Spring Festival and the epidemic. Consumers looked around, and those who wanted to buy still chose to take delivery. After this round of concessions ended, the expected price of Model 3 or the expected upgraded Model 3 made the sales relatively worse.
However, the demand for Model Y was well demonstrated, and the deviation between Model 3 and Model Y was that consumers were avoiding the old Model 3 that might be upgraded and priced. There was no pressure and impact on Model Y that was un-upgraded, and the demand for Model Y has surged. For a budget of about RMB 250,000, choosing a pure electric vehicle with good performance is certainly a good deal with Model Y.
NIO, XPENG, and IDEAL have now shown differentiation:
◎ NIO: After the promotion of ES6 ended, NIO still focuses on the sales of EM5, and the sinking and promotion of battery swapping stations may promote the sales of NIO.
◎ IDEAL: L7 is the follow-up increment. With the diversion of L9’s popularity, L8 has surpassed L9. Although IDEAL does not reduce the price later, consumers will choose more cost-effective models.“`markdown
◎XPeng Motors: Currently, the four models sold by XPeng Motors have not demonstrated strong competitiveness. The G9’s one-wave flow has cost XPeng more than a year.
◎WM Motor: WM Motor’s performance is poor, and there are currently no good measures to boost sales.
BYD’s sales have recovered relatively quickly. The DM-i and pure electric two lines also need price adjustments to further increase their sales.
Volkswagen’s several car models have been in a downturn in sales. With Japanese pure electric cars beginning to reduce prices, the south and north Volkswagen also need a strong wave of price promotion to restore the ID series to its former glory.
February has finally ended, and we will gradually welcome the dawn in March. The delay in car consumption is a normal choice for consumers, so short-term measures may indeed only allow powerful companies to take the lead in price reductions and further enhance the cost-effectiveness of the entire market.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email firstname.lastname@example.org.