The price war has spread to high-end brands | Jianzhi Research

Recently, traditional luxury car brands led by BBA have announced their withdrawal from price wars, with price increases ranging from 3 to 5 thousand yuan for various series of products. This has led the market and consumers to speculate whether the price war among high-end car brands will come to an end.

However, on the evening of July 29th, BYD officially announced a price reduction of 50,000 yuan for its high-end brand, Fudi Leopard "Leopard 5" model, with the highest price reduction reaching 17.25%. This basically brings the price range of the "Leopard 5" model to below 300,000 yuan (up to 302,800 yuan).

Previously, BYD's price reduction strategy mainly focused on the mid-to-low-end Wangchao and Haiyang series products. Now, BYD has further ignited the price war in the high-end car brand segment. It can be seen that as long as leading car companies do not stop, this year's car price war may not end so easily.

As the saying goes, "When the tree wishes to stand still, the wind keeps blowing." BYD's announcement of a significant price reduction promotion for the Fudi Leopard brand indirectly proves that BYD is trying to challenge the current leader in the domestic new energy off-road vehicle market, Great Wall Tank brand. At the same time, the significant price reduction of the Fudi Leopard brand, one of BYD's high-end brand representatives, in the second half of the year indicates that the sales growth of BYD's high-end brands is about to accelerate.

In other words, BYD's high-end brands are also gearing up.

1. BYD Fudi Leopard reduces prices to compete with Great Wall Tank

As one of the three most important labels for BYD this year (high-end, intelligent, and internationalization), the high-end segment not only surpassed the mid-to-low-end Wangchao and Haiyang series in the number of new models launched but also needs to make a breakthrough in market share in the high-end car brand segment.

As a representative of the high-end brand, Fudi Leopard, the company's current goal is definitely to maintain sales volume.

(1) Fudi Leopard 3, 5, 8 form a price linkage, avoiding internal competition

This year, BYD's new car launch plan mainly focuses on high-end brands, with only 5 models in the Wangchao and Haiyang series, while there are 7 models in the high-end brand segment. Among them, the Fudi Leopard series, including Leopard 3 (above 200,000 yuan) and Leopard 8 (above 400,000 yuan), is expected to be launched in the third quarter, becoming a strong player for BYD's high-end brands in the third quarter.

Before the official launch of the new models Leopard 3 and Leopard 8, BYD has reduced the price of Leopard 5 to 300,000 yuan, effectively forming a linkage between the three major price ranges of 200,000 yuan, 300,000 yuan, and 400,000 yuan, without internal competitive consumption.

(2) BYD Fudi Leopard lacks obvious advantages in the car market, facing strong competitors

Unlike the smooth sailing of the high-end brand NIO, Fudi Leopard's sales growth has been somewhat bumpy.

In the first half of this year, BYD Fudi Leopard sold 18,300 units, with sales levels increasing from the initial 626 units to the current 2,000-3,000 units, showing mediocre performance.

Specifically, in the first half of this year, Great Wall's Tank new energy brand (including Tank 400, Tank 500, and Tank 700 Hi4-T) had a total sales volume of around 50,000 units, occupying over 60% of the domestic new energy off-road vehicle market share.

Among them, as the biggest competitor of BYD Fudi Leopard, Great Wall's sales leader Tank 400 (with a sales share of 40%) is priced in the range of 279,800 to 289,800 yuan, consistently holding the top spot in sales rankings However, this time the price reduction of the BYD Tang 5 is as high as 50,000 yuan, directly making the prices of the BYD Tang 5 and Tank 400 similar, greatly increasing the cost-effectiveness of the BYD Tang 5. In the future, BYD Tang is expected to further increase its market share with the help of price reductions, truly possessing the strength to compete with brands like Land Rover and Great Wall Tank.

2. How significant is the impact of BYD's price reduction wave?

As a leading company in new energy vehicles, BYD's price reduction activities also affect the hearts of most new energy vehicle companies.

However, according to Wall Street News · Insight Research, although the price reduction of the BYD Tang 5 this time is significant, it is difficult to create a follow-up effect similar to the price reductions of the Wangchao and Ocean series products. For example, after the Qin PLUS DMI dropped to 79,800 yuan, there was a wave of follow-up price reductions from companies like XPeng, Aito, Chery, Leapmotor, and NIO. However, the sales promotion effect of the price reductions of the mid-to-low-end Wangchao and Ocean series products is expected to be reflected simultaneously in high-end brands.

On one hand, in the new energy off-road vehicle market where the BYD Tang is positioned, the number of competitors is far fewer compared to the Wangchao and Ocean series, facing only competitors like Great Wall Tank, Dongfeng Warrior, GAC ES9, and ZEEKR 01. Therefore, this time, there is no phenomenon of a large number of new energy vehicle companies following BYD's price reduction.

Furthermore, the prices of leading models such as Tank 400 and GAC ES9 are currently lower than the post-reduction price of the BYD Tang 5, so even if the BYD Tang 5 has reduced its price significantly, these competitors are unlikely to follow suit with large-scale price reductions.

On the other hand, the sales promotion effect of the price reductions of BYD's high-end brands has already been demonstrated earlier this year.

In February and March of this year, BYD reduced the prices of its high-end brands Tang N7 and D9 by 65,000 yuan and 25,000 yuan respectively. Among them, the larger price reduction for the N7 achieved a month-on-month sales increase of 5.11 times in April, and continued to double in May. The already sizable D9 achieved a month-on-month sales increase of 1.4 times in March, and maintained high sales levels in April and May.

In conclusion, the price reduction of the BYD Tang does not signify the start of a new round of price wars in the new energy vehicle market in the second half of the year. However, it may indicate that BYD's high-end brands are also gearing up for promotions