At the start of the Year of the Dragon in 2024, BYD initiated a new round of price wars, causing a stir in the market.
Recently, the BYD Qin PLUS Honor Edition and Destroyer 05 Honor Edition were officially launched, with a starting price of 79,800 RMB. The price range for the DM-i model is 79,800-125,800 RMB, while the EV model is priced between 109,800-139,800 RMB.
Compared to the previous champion edition models, the Honor Edition has directly reduced the price by 20,000 RMB. In early last year, BYD made a sensation by offering the champion edition Qin DM-i for as low as 99,800 RMB, with the slogan "Same price for hybrid and gasoline vehicles," successfully bringing hybrid models into the below 100,000 RMB price range.
Following BYD's "first shot" in the Year of the Dragon, SAIC-GM-Wuling, Changan Qiyuan, NIO, and even Beijing Hyundai quickly followed suit, joining this competition.
Do not underestimate the "mere" 20,000 RMB reduction, as it may signify the end of joint venture gasoline vehicles priced below 100,000 RMB in the Chinese market.
The price war lasted for an entire year last year. Now, with BYD initiating another price war, what impact will it have on the auto market this year? How will the market landscape reshuffle?
From "Same price for hybrid and gasoline vehicles" to "Electric is cheaper than gasoline"
The starting prices of the BYD Qin PLUS and Destroyer 05 Honor Edition models are 20,000 RMB cheaper than the previous champion edition versions, and it's even more astonishing as it involves an "increase in quantity and decrease in price."
The configuration of the Qin PLUS Honor Edition and Champion Edition has not changed significantly, but the price has been reduced by 20,000 CNY, according to BYD.
Based on the currently released specifications, there haven't been any major changes in terms of power and range for the Honor Edition and Champion Edition. However, there have been some minor adjustments in certain details. For example, the Qin PLUS Honor Edition introduces a new exterior color called "White Enamel Blue" and adds a feature for intelligent voice continuous calling. Additionally, the entire series has undergone an upgrade in smart power on and off. Overall, both the Qin PLUS Honor Edition and Destroyer 05 Honor Edition achieve not only an increase in quantity but also a reduction in price.
BYD's pricing strategy is not just about engaging in a price war for their products; it is a war within the industry ecosystem. Li Yunfei, the General Manager of BYD's Brand and PR Department, stated that due to economies of scale and advantages throughout the entire industry chain, the price of BYD's plug-in hybrid vehicles can be lower than that of similar fuel vehicles.
This means that BYD, through its large sales volume, cost control, and technological strength, has the ability to demonstrate sincerity in new car pricing and provide consumers with more affordable options.
In other words, Chinese manufacturers have completely gained control over pricing in the A-segment car market, with prices around 100,000 CNY.
The intention behind this price reduction is for BYD to once again ignite a market transformation and achieve a historic shift from "electric equal to fuel" to "electric lower than fuel." Looking back at the launch of the Champion Edition in 2023, it significantly boosted BYD's sales volume.
The successful launch of the Champion Edition brought the selling price below 100,000 CNY, breaking the final barrier of joint-venture fuel cars and achieving monthly sales of over 40,000 units. Ultimately, it changed the landscape of the A-segment car market.
From the Champion edition to the Glory edition, it means that BYD's other models will also experience a wave of price reductions.
In the internal comparison at BYD, the current starting price of 79,800 CNY is equivalent to the A00 level pure electric car "Seagull" (73,800-89,800 CNY), and lower than the A0 level pure electric car "Dolphin" (116,800-139,800 CNY). This also means that other models in the Glory edition are expected to continue to be launched, initiating a new round of increased quantity without increased price.
These measures have enabled BYD to maintain competitiveness in the new energy vehicle market and have triggered a re-evaluation of the overall market landscape for new energy vehicles.
Within less than a day of BYD announcing the price reduction information, four car companies have successively announced price reductions, sparking an intense price war.
The first to respond was SAIC-GM Wuling, with its Brand Division Vice President Zhou Xi posting on personal Weibo: "The answer is 'follow'!" On February 19th, the upgraded version of Wuling Xingguang 150 Glory Edition was officially revealed, with the price reduced from 105,800 CNY to 99,800 CNY, a direct reduction of 6,000 CNY, marking the opening of an era of "9,000-yuan level" for ultra-long pure electric and hybrid models.
On the same day, Changan Qiyuan and NIO also followed suit. The starting prices of the Changan Qiyuan Q05 and A05 models were lowered to 73,900 CNY; NIO also launched a price reduction campaign, with the price of the NIO X model reduced by 22,000 CNY, dropping to 99,800 CNY, and the starting price also lowered to below 100,000 CNY.
In the midst of this price war, Beijing Hyundai also joined the competition, proclaiming "Gasoline is stronger than electricity" as its slogan, reducing the starting price of the all-new Elantra model to 75,800 CNY, with a discount of up to 24,000 CNY.
Facing the final battle against gasoline vehicles
Byd's move seems to have opened the prelude to a major battle. However, this is not internal competition among domestic brands, but a crazy "encirclement and suppression" of joint venture gasoline vehicles. Li Yunfei said that Byd's move will fully initiate a major battle with gasoline vehicles.
"Who will still buy a gasoline vehicle next?"
Currently, the focus of this battle is the A-level car market, which is the barometer of the Chinese automobile market. In the Chinese automobile market, A-level sedans have always been considered the key factor that influences the entire market. Whoever occupies a leadership position in the A-level sedan market can dominate the entire market.
According to data released by the China Passenger Car Association on the 2023 passenger vehicle market, the overall retail and wholesale sales of A-level sedans reached 5.13 million and 4.73 million respectively, although they have decreased by 5% and 8% compared to the previous year, the A-level car market is still the largest segment in the entire market.
BYD has recently launched a price reduction for its Honor Edition of the Destroyer 05, bringing the starting price down to 79,800 CNY. This move further solidifies BYD's position in the A-segment car market, which played a crucial role in achieving its 3 million unit sales milestone last year. With nearly 30 models available in 2023, BYD has 9 models that have surpassed 100,000 units in sales, including popular models like the Dolphin, Yuan PLUS, Qin PLUS DM-i, Song PLUS DM-i, and Seagull. These models are widely regarded as "super hits" and are predominantly A-segment cars.
Of particular note is the success of the BYD Qin PLUS, which surpassed the Nissan Sylphy to become the best-selling A-segment sedan in China in 2023. The Qin PLUS achieved an impressive cumulative sales figure of 434,000 units throughout the year, surpassing the Sylphy and Lavida by approximately 100,000 units, securing the annual sales champion title in the A-segment sedan market for the first time.
While the A-segment car market is a large market, the penetration rate of new energy vehicles is relatively low at 26.3%, compared to the industry average of 35.1%. This indicates that there is still room for growth in the A-segment market for new energy vehicles.
By introducing the Honor Edition with a starting price of 79,800 CNY, BYD aims to further capture market share from traditional A-segment fuel cars produced by joint ventures. Currently, models such as the Sylphy, Lavida, and Sagitar have actual starting prices ranging from 73,000 CNY to 100,000 CNY. By offering price reductions on models like the Qin PLUS and Honor Edition of the Destroyer 05, BYD hopes to continuously challenge the joint venture fuel car market and further increase the penetration rate of new energy vehicles in this segment.
As the Year of the Dragon begins in 2024, BYD has ignited a price war that has engulfed the entire automotive market, creating an intense and competitive landscape. Major brands are restless and eager to participate in this fierce price battle, leading to a drastic change in the market situation.
However, this competition is not just between domestic brands; it represents a profound challenge to traditional fuel cars. Brands like BYD are leading the automotive market towards a complete transformation from traditional fuel to new energy. The automotive market is like a surging river, signaling the beginning of a decisive battle that will reshape the industry. This explosive battle is not only exhilarating but also a profound baptism for the entire industry.
