Author: Tao Yanyan

Zhi Neng weekly report tracks the data of insurance for passenger cars in China, and the analysis is for the second week of March 2023, from March 6th, 2023 to March 12th, 2023.

Industry situation

In March, Hubei Province united with multiple car companies to launch car purchase subsidies, mainly targeting Dongfeng series brands (including the “Dongfeng Series” brand). The highest discount reached 90,000 yuan. Behind the price reduction is the crisis of the entire auto industry.

Looking at the overall data of China’s passenger car insurance, the sales volume this week was 313,700 units, a year-on-year decrease of 8.5% and a month-on-month decrease of 10.7%.

In terms of power types, the sales volume of new energy vehicles this week was 108,000 units, a year-on-year increase of 8.8% and a month-on-month decrease of 7.2%. The growth of new energy vehicles is also only single-digit.

Traditional fuel vehicles cannot sell at all, with only 205,500 units sold, a year-on-year decrease of 15.6%, and a month-on-month decrease of 12.4%.

We believe that after the subsequent price war of fuel vehicles opens regardless of cost, the entire automobile market will experience an irreversible price collapse, which will indeed have a huge impact on consumers’ purchasing mentality, and cars will begin to become unsalable products. As the largest consumer item outside of real estate, consumers have started to buy high and not low.

Key automotive companies

The following key companies have varying degrees of recovery during the tracking process.

1) BYD: The sales volume this week is 37,147 units, a year-on-year increase of 52.1% and a month-on-month decrease of 4.6%;

2) Tesla: The sales volume this week was 17,030 units, a year-on-year increase of 16.7% and a month-on-month increase of 28.4%.

3) NIO: The sales volume this week was 2170 units, a year-on-year increase of 8.7% and a month-on-month decrease of 35.1%;

4) XPeng: The sales volume this week was 1636 units, a year-on-year decrease of 51.9% and a month-on-month increase of 15.0%.

High-attention Automotive Companies

1) Tesla

Tesla still demonstrates foresight by offering big discounts during the off-season, which allows them to find their ultimate selling point (cost-effectiveness). Currently, the Model Y is very popular and Tesla’s market share in new energy vehicles exceeds 15%.

2) Emerging Brands

NIO, XPeng, and Li Auto are all relatively stable under current circumstances.

NIO: NIO’s sales declined this week due to poor communication about the no-discount strategy on the second-generation model, causing some customers to cancel their orders.

Li Auto: With the delivery of the L7, the L9, L8, and L7 have a strong sense of competition. L8 has consistently overtaken L9, and L7 is rapidly growing, with plenty of room to climb in the next step of data.

XPeng: XPeng’s sales hopes rest entirely on the redesigned P7, as the sales of the G9 have dropped sharply. Based on the information currently available, XPeng is more focused on improving their own products and ignoring the current state of competitors. We expect a very compelling price to win over consumers.

5) Ideal: This week’s sales target is 4243 vehicles, a year-on-year increase of 37.6% and a month-on-month increase of 31.7%.

6) Question: This week’s sales were over 800 vehicles, with a lot of potential after Huawei’s support. Starting from March, the whole of China has been waiting for price cuts.# Questions in the Automobile Market:

The performance of Wanjie (WEY) needs to wait for the assistance from Huawei to improve. At present, there is no effective measure to boost sales.

3) BYD

BYD’s market share in new energy vehicles exceeds one-third. Pure electric vehicles revolve around two cars, the Dolphin and the Yuan Plus. The proportion of Qin series is also increasing. As for plug-in hybrid models, the Song series has begun to shift towards the Qin series, which is a relatively sudden change.

4) Volkswagen brand

Volkswagen’s sales of gasoline vehicles have declined significantly this year, and there is also great pressure on sales of new energy vehicles.

As ordinary consumers, of course, we can ignore the car market. The price reduction of cars is a good opportunity for everyone to “pick up bargains”. But what we should be concerned about is whether the car price will continue to drop. Buying a car has also become as difficult as buying stocks.

We can see that under the impact and squeeze of new energy vehicles, the price reduction of gasoline cars is an inevitable trend. The joint efforts of the government and enterprises to reduce prices are both reasonable and unexpected. Therefore, it will intensify the differentiation between head and marginal companies in China’s domestic-branded car market.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.