Autonomous blood market leads to "butterfly effect"


Wang Jinyu

The current replacement effect of new energy vehicles has been very obvious, from the latest listed several new cars it is not difficult to see that many brands, especially independent brands, are actively competing for the pricing power of plug-in hybrid cars, such as Galaxy L7, the Great Wall Xiaolong MAX, from two-drive models to four-wheel drive models, are redefining the price range of the plug-in market. It also greatly impacted the price system set by BYD Song and Tang series. Independent brand plug-in hybrid product prices continue to decline, has been close to or even lower than the same level of hybrid models, because the plug-in hybrid models are exempt from the purchase tax, and the hybrid models do not enjoy the preferential purchase tax exemption, so the hybrid model market is greatly affected, by the independent brand of the hybrid market pricing power caused by the "butterfly effect" began to appear.


The price of independent intermixing continues to plummet


Listed on May 31, the official guide price of Geely Galaxy L7 fell to 138,700 yuan, as a smart SUV with a richer configuration, this price once again "breakdown" the bottom line of the plug-in market. At the same time as the price is falling, the configuration is full is another concern of the competition in the self-intermixing market. Official data show that the Galaxy L7 standard 8155 flagship cabin chip and the Star wisdom computing center double computing base supported by 8.1 billion times per second super cloud computing power, Yinhe NOS cockpit operating system, "8155+ super brain + Yinhe NOS" super intelligence combination has become the standard of the car.
Haval Xiaolong also put the price down to 130,000 yuan range, 139,800 to 179,800 yuan price range fully demonstrates the determination of Haval to compete for the plug-in SUV market sales crown. The 7-inch dashboard + 12.3-inch center control screen dual screen, level 2 driver assistance function, electric trunk, reserve door location memory, Bluetooth key, all car Windows one-click lift, rearview mirror power folding, rearview mirror heating and automatic folding, co-driver power adjustment and 64-color atmosphere light and other features also make this model's intelligent properties continue to improve.


The Dongfeng Nissan Qichen Big V DD-i super hybrid, which has just opened the pre-sale, launched two versions of 130,000 yuan and 142,000 yuan as the first plug-in hybrid model of Qichen DD-i super hybrid technology, and the configuration given by this car is equally wonderful. Equipped with IHS intelligent electric mixing system, the drive mode can be adjusted intelligently according to the actual working conditions. In the actual driving process, the user does not need to manually switch modes, and the system can automatically switch five intelligent working modes of pure electric drive, series charging, series discharge, engine direct drive and energy recovery according to the speed, battery SOC state and power demand. Whether it is urban road conditions or high-speed road conditions, the super hybrid big V can be easily adapted to the autonomous switch, always keep the vehicle in the best working area, through such a set of intelligent electric mixing system, to achieve energy saving effect, do not save power, only save fuel. Super hybrid large V can be electric and oil, the class leading 1132km (NEDC) comprehensive range, 18.4kWh battery capacity, pure electric range of up to 110km. At the same time, 0.85L 100km comprehensive fuel consumption, 4.3L 100km feed fuel consumption, 12.2kWh 100km power consumption, the comprehensive cost per kilometer is only 0.1 yuan.


The Auchan Z6 iDD, which has just completed 100,000 units off the production line, is also a spoiler of the autonomous hybrid market price, which will drop the price to 129,800 yuan. The largest battery pack in the same class - "28.4kWh large battery pack", the best intelligent configuration in the same class - "On-Style 5.1 smart happy cabin", Auchan also gives this car rich configuration, constantly refreshing the limit of the cost performance of the autonomous plug-in market.


It can be seen that in the traditional advantages of independent brands, that is, in the mid-end SUV market, independent brands have begun to carry out product iteration and replacement. A new crop of products is entering the market in the form of plug-in SUVs, whose prices are increasingly approaching those of the previous generation of conventional fuel vehicles. Byd Song series models before the starting price of 140,000 yuan, has been repeatedly broken down. The price is lower, the configuration is richer, and the determination of the independent brand shopping this market segment has been very obvious.


The outlook for plug-in hybrid models is promising


At present, the competition between independent brands has become white-hot, especially in the intermixing market competition is more intense. According to data released by the China Association of Automobile Manufacturers, the production and sales volume of plug-in hybrid models reached 195,000 and 194,000 units in May, up 91.7% and 94.4% respectively from a year earlier. From January to May, the production and sales of plug-in hybrid models were as high as 803,000 and 793,000, with growth rates of 88% and 90.5%, respectively. Although there is still a gap between the absolute production and sales of plug-in and pure electric models, it is "one ride clean" in terms of growth rate, showing a strong competitiveness.


Arte Automobile chairman Xuan Qiwu analysis: "In the past, hybrid power compared with fuel power, about 45,000 yuan expensive. Now there is no cost problem compared with pure electric models, which is one of the reasons for the rapid development of hybrid in recent years." He believes that the development of new energy vehicles has changed the hybrid car circuit. "The hybrid route must be sustainable." As Qi Hongzhong, assistant president of GAC Research Institute and deputy director of Powertrain Technology Research and Development Center, said, the prospects of plug-in hybrid models are generally optimistic.


In the view of Qi Hongzhong, the motor and the engine have defects, the motor defect is the torque output, the engine defect is the high energy consumption, but the combination of the two can solve the above problems, so the two are a perfect combination, natural perfect match, long-term existence is beyond doubt. In the past, the impression of the market and consumers on the Chinese auto industry has been that the engine is weak. At present, in the field of engines, especially in the field of hybrid special engines, the level of independent brands has done the world's leading, including the hybrid special transmission DHT, almost all mainstream automakers in China have their own DHT products. Therefore, hybrid power has long existed in China and has a certain degree of basic support.


Hu Tiegang, general manager of Changan Automobile Power Research Institute, stressed that electric vehicle sales in the Chinese market are mainly concentrated in two product ranges of less than 100,000 yuan and more than 300,000 yuan, but in 2022, sales of 100,000 to 200,000 yuan products are as high as 724,000. "In the future, A-class cars will have the largest user base in the Chinese market, and sales of products priced at 100,000 to 200,000 yuan per year will account for about 50%." Hu Tiegang said that the growth of A-class car sales will promote the further expansion of new energy vehicle sales. At the same time, once pure electric vehicles reach a certain amount, the low-cost state brought by residential electricity prices may change, which will also force the industry to take a diverse power route.


Ouyang Ming, academician of the Chinese Academy of Sciences, judges that at present, the price of pure electric vehicles is high, and the battery cost is also high, so the proportion of plug-in hybrid and extended range electric in the next 5 to 10 years will gradually increase from 22% last year to 30% to 40%, or even close to 50%. Among them, the highest proportion is mid-level mainstream cars and SUVs.


It is this general optimism about the plug-in hybrid market that makes car companies continue to increase their investment in this market, and competition is intensifying as various new models compete to be listed. Xuan Qiwu stressed that at present, the development requirements of autonomous vehicle companies for hybrid power systems are more and more subdivided, not simply run out of power and start the engine. In the future, the development of hybrid power will not be the same, but a combination of different models, different use scenarios, different ways of use for targeted development. While developing different products for different market segments, the battle for pricing power around plug-in hybrid products is becoming increasingly fierce.


"The battle for pricing power of independent brands in the plug-in hybrid market is fundamentally about the battle for market share." A senior expert in the automotive industry said in an interview with reporters that everyone is optimistic about the plug-in hybrid market, but the market is so large, and everyone wants to seize more market share, so, starting from the price, various means are frequent, and competition will become more and more fierce.
The butterfly effect is still expanding


The competition of independent brands in the intermixing market has developed from price war and configuration war to an unpredictable direction. Mu Feng, president of the Great Wall Motor, said at the Haval Thunder series listing conference: "Some car companies will 'control public opinion as the first productive force', some car companies' spontaneous combustion in the driving, the A-column deformation but silent ', and some car companies' win sales, lose the bottom line '." Li Ruifeng, chief growth officer of Great Wall Motor, also said: "Great Wall Motor just needs to hear the voice of consumers, build cars, work hard and treat people seriously."


Soon after, a letter of complaint triggered a strong response in the automotive circle. Subsequently, Li Shufu, chairman of Geely Holding, said that the challenges facing China's auto industry are still very severe, we must insist on laying the foundation and practicing internal skills, only the formation of core capabilities, in order to ensure the sustainable development of enterprises, whether it is "overtaking the corner" or "overtaking the lane", it is impossible to go smoothly. "I think that all competition is inseparable from one way, that is, the right way, the 100-year history of the automotive industry tells us that only by taking the right way can we win the world." There are mountains outside the sky, and there are mountains outside the mountains. The development of everything has its own objective laws. To study the law, understand the law, and respect the law, this is the 'right way' I just said."


Yin Tongyue, chairman of Chery Automobile, stressed that independent brands want to rise, but also regulate their own behavior, to civilized competition, the real competition is the duel between engineers, the duel of technology, rather than something outside of this. Zhang Xinghai, chairman and founder of Selith Group, also said that at present, the "hundred group war" in the automotive industry is intensifying, and the industry is accelerating its internal roll. "Today's achievements are hard-won, car companies should keep their homes, speak integrity, speak the bottom line, speak the rules, fear quality, fear life, fear users, fear capital, fear investment, vicious competition will destroy the enterprise, destroy the industry." Zhang Xinghai proposed that Chinese cars should be condensed into a chess game.


Affected by the fierce war of independent brands in the plug-in hybrid car market, the fierce competition in the automobile market is constantly expanding, and joint venture brands are not immune. The price of the new Buick Lacrosse, launched in May, has been reduced by nearly 40,000 yuan for the entry-level model; The new Honda Accord even put forward the slogan "the same price of gas and electricity"; Cadillac's new XT4 is about 30,000 to 80,000 yuan cheaper than the old model; Buick's first pure electric vehicle Electra E5 starts at 208,900 yuan; The two models of hybrid Qijun are priced at 189,900 yuan and 1999,900 yuan respectively, not only "the same price of oil and electricity", but even claimed that "this is the lowest price in the world".


Huaxi Securities research report shows that the overall discount rate of the automotive industry continued to be liberalized in April. As of late April, the industry's overall discount rate was 10.5%; Among them, the discount rate of fuel vehicles is 11.2%, and the discount rate of new energy vehicles is 8.5%. The joint venture discount rate reached 13.8 per cent, significantly higher than the autonomous discount rate of 6.3 per cent. In addition, the discount rate of independent new energy vehicles is 5.0%, and the discount rate of joint venture new energy vehicles is 14.1%. Since 2020, the discount rate of mainstream joint venture car companies has remained above 10%, and since August last year, the decline in terminal demand has further released the discount, and the price reduction is the long-term volume price transmission brought about by the decline in share. Ping An Securities also pointed out that the A-class car is the largest market for traditional joint venture car companies, and this market is being impacted by autonomous plug-in models led by BYD, such as the Qin Plus champion edition price has almost the same price as the fuel car of the same level.


With the continuous improvement of the efficiency and market share of independent brands, the competition between independent brands has intensified at the same time, the joint venture brand can no longer "watch the fire", and has to join the more intense market competition. Especially under the impact of the epidemic and other factors, the market share of joint venture brands in China is facing a huge challenge, so that they have to make more attempts for the Chinese local market. Affected by independent brands and consumer demand, while launching a variety of plug-in hybrid and pure electric models, they are also making more compromises on the price, and the price system of the joint venture brand is also quietly adjusting.


Yang Jing, director of China corporate research at Fitch Ratings, said that the leading independent brands in areas such as new energy vehicles have made joint venture brands feel pressure. "If joint venture car companies want to achieve a certain sales scale in China's new energy vehicle market, they need to match their own brands in terms of cost performance." Yang Jing said. In fact, the lack of fuel vehicle product strength of the joint venture brands has been difficult to support their premium in the Chinese market, so their market share has declined, and they have to make more attempts, including price exploration and promoting the market promotion of more new energy models.


Liu Peng, deputy general manager of Toyota Motor (China) Investment Co., LTD., judged that the market must be diversified in the coming period, "because Chinese consumers have a high acceptance of new energy vehicles, and China's infrastructure is very good." Liu Peng believes that due to the diversity of energy, the diversity of consumer demand, regional conditions are also different, so it is not possible to "bet" on a certain technical route, hybrid power, hydrogen energy, etc., will be Toyota's technical route.


According to the statistics of the China Association of Automobile Manufacturers, from January to May, traditional energy passenger cars, A0 and C-class vehicles showed positive growth year-on-year, and A00, A-class and B-class vehicles showed varying degrees of decline year-on-year. At present, sales are still mainly concentrated in the A-class, with cumulative sales of 3.481 million units, down 2.9% year-on-year. From January to May, new energy passenger cars, with the rich variety of new energy vehicle models, model prices and other factors, A00 class cars decreased significantly year-on-year, sales at other levels showed varying degrees of growth, of which D class cars increased the most due to the impact of low base in the same period, up to 16.8 times. At present, sales are still mainly concentrated in the A-class, with cumulative sales of 1.109 million units, an increase of 68.2%. From January to May, among traditional energy passenger vehicles, models in the price range of 80,000 to 100,000 and more than 250,000 showed positive growth year-on-year, of which more than 500,000 rose the most, accounting for 28.7%. At present, sales are still mainly concentrated in the price range of 100,000 to 150,000, with cumulative sales of 2.11 million vehicles, down 1.9% year-on-year. From January to May, more than 100,000 new energy passenger vehicles showed positive growth year-on-year, of which 350,000 to 400,000 price range rose the most. Models in the price range of 100,000 yuan and below fell year-on-year. At present, sales are still mainly concentrated in the price range of 150,000 to 200,000, with cumulative sales of 878,000 units, an increase of 85.4%. Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, said that the 100,000 to 150,000 yuan market has become a key segment of the competition between new energy vehicles and traditional fuel vehicles. Independent brands for this market to put a large number of products, will make the competition in this market segment more intense, the price war and configuration war will continue.


Some analysts said that due to the expanding "butterfly effect" of independent brands competing in the plug-in hybrid car market, hybrid models are likely to become the first products to be replaced in the future domestic market. From the price point of view, at the same price and at the same level, plug-in hybrid models have certain advantages in purchase cost and use cost, and with the continuous improvement of domestic charging infrastructure, this advantage may continue to expand. Following the hybrid model, the product power of the previous generation of autonomous explosive SUV may end quickly, because there is a large gap with the current mainstream autonomous plug-in models in terms of performance and configuration. If the plug-in hybrid market trend continues to rise, it is likely that this technology will also be popularized on high-end models in the future, so that the competition will continue to expand. From this point of view, the "butterfly effect" caused by the competition of independent brands in the plug-in hybrid market will continue.


Originally published by China Automotive News, June 25, 2023