Heroes vs. Wuling, Chang'an Baotuan to “winterâ€
The National Development and Reform Commission price monitoring center issued a monitoring report last week. In July, domestic auto prices were pushed up by the price increase of sports passenger cars and micro-customers. Passenger car prices rose for the first time since March, up 0.45%.
The industry believes that when the auto market is in the doldrums and raw material prices are rising, automakers are in a dilemma in price positioning. The thinnest profitable mini-vehicle prices are inevitable. In this context, the domestic mini-vehicle market was staged by Changan and SAIC-GM-Wuling Heroes. Both sides competed to launch big micro-substances and launched a fierce competition in the context of rising prices.
Micro car price rise
The price monitoring report shows that the price of passenger vehicles has increased for the first time since March, which is a 0.4% increase from the previous month and a decrease of 1.32% year-on-year. Among them, with the exception of the basic passenger car, which was affected by increased competition and weaker demand, the price dropped by 0.22% month-on-month. The prices of sports passenger cars and minivans rose by 0.96% and 0.70% respectively from the previous month.
This monitoring result is in line with market performance. However, commercial vehicles and micro-vehicles, which have relatively weak cost bearing capacity, can only “overwinter†with price increases.
According to information from the Guangzhou market, most mini-vehicle products from manufacturers such as Changan, Hafei and Dongfeng Junan have undergone price increases. Which Changan micro-car prices in the 800 to 1,000 yuan, Dongfeng Xiaokang part of the model prices are also raised about 800 yuan, Hafei part of the price of the model was up about 1,000 yuan. In July, the domestic micro-vehicle market leader SAIC-GM-Wuling Commercial Vehicles also started to increase prices by about 1,000 yuan, mainly including mini-buses such as Wuling Light, among which single and double-seat buses increased 1,000 yuan. The price increases from 300 yuan to 1,000 yuan, the increase rate is about 2%.
Commercial vehicle prices also continue to rise. According to the monitoring, the price of commercial vehicles in July rose from 0.94% in the previous month to 2.95%, which was a 0.11% increase from the same period last year.
Two male matchups
The mini-vehicle market experienced a price war in 2006. In 2007, a new generation of micro-passenger products was upgraded. From June 2008, Changan Automobile, the two domestic micro-vehicle manufacturers, and Wuling, SAIC Motors, have successively launched “Dawei Ke†Chang’an. Star S460 and Wuling Rongguang entered the mini-vehicle segmentation market and formed a trend of confrontation. It is understood that "micro-off" products did not follow other micro-car prices together. Chang'an, whether it is launching the Changan Star S460 or the New Economy Commercial Vehicle Changan Xingguang 4500, did not immediately release the price, showing caution in price positioning.
Changan's responsible person judged that since mini-car consumers are much more sensitive to prices than cars, the general price increase of micro-cars makes consumers more rational in buying cars. Especially in the second- and third-tier cities and rural markets where micro-vehicles are heavily relied on, prices will become the key factors for consumers to make car purchase decisions.
"Even if the price gap is only 500 yuan, the user will largely choose the microcar with a low price," said one person who has been engaged in sales of microcars for many years. Yang Dayong, vice minister of Chang'an’s marketing department, also stated that the previous mini-vehicle users would not hesitate to buy a car as long as they promised to buy more cars and send more gasoline. But now a pure price war can no longer attract increasingly rational consumers. Under this trend, the increase in the price of mini-vehicles has further promoted the focus on the overall value of car purchases, use costs, and maintenance prices when consumers purchase cars. The tide of prices will therefore really test the micro-vehicle manufacturers' marketing methods.
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