2015 auto market a new round of price wars still linger, cut tide quietly come.
Recently, president of Ford Asia-Pacific region Xiao Dawei in an interview that the company has slightly reduced the production capacity in China in the first quarter of this year, in response to a competitor's price wars and market slowdown.
In addition to Ford, the luxury brand BMW has also said publicly that China has adjusted the production target and, according to the National Passenger Car Information Co-date statistics, FAW - Volkswagen, Shanghai GM, Nissan and other companies also were decreased output . "Most car companies are readjusting production target, only part of the information has not been disclosed in car prices." Industry insider "China Business News", told reporters that "this approach is the trend, but also an act of rational, but the addition of In addition, car prices also should take more proactive measures to address the challenges. "
Reduced sales targets
Recently, Ford (China) Chairman and CEO Luo Lixiang and make a positive response to the issue cuts, Ford cut production again to confirm the news and said that the work has now successfully completed. But production does not mean loss of confidence in the Chinese market Ford, according to the company's internal forecast, the Chinese market in the next five to ten years will contribute 60% in increments of Ford's global sales growth.
China's automobile market into the "slight increase" era, a lot of car prices since April, setting off a new round of "price war", Ford is also involved. April 10, Ford announced a "free fall Generation" approach took the price "baton", between April 10 to 30, the purchase of Ford's full-line vehicle will be presented in full vehicle purchase tax.
After the "tax-free on behalf of the drop," Ford April sales of 72,579, an increase of 7%, higher than China's auto industry statistics overall passenger growth rate (3.72%). After entering in May, subject to the overall auto market slowdown, combined with the offer ends, Ford dropped to 4 percent sales growth in China.
Faced with falling market, Ford will cut public matters, and consistent wind industry, we are positive about the move to Ford. Although the production issues Ford attracted the most attention, but this is not its original, all car prices has also begun this work.
BMW Group president and CEO of Greater China Engelhard recently announced that in the first quarter, the company has cut output in China in the second quarter and will remain so. According to the National Passenger Car Information Co-date statistical data, in April, part of the mainstream car prices have different degrees of decline in production, including FAW - Volkswagen 4 per month fell by 25%, Shanghai GM decline is also up 23.1%, Dongfeng Nissan appear sharp decline of 20.9%, Beijing Hyundai fell 8.8%.
Adjust production while, all car prices also adjust the sales targets. Currently, in addition to outside Shanghai Volkswagen still adhere to its 2 million sales target, a number of car companies have abandoned previous sales expected - based on public information, BMW has been reduced second-quarter sales target Chinese distributors, dealers long to complete 85% The wholesale goal, you can get the number of bicycle manufacturers to provide award; February, FAW - Volkswagen Audi sales forecast released also 40,000 fewer than the previous plan, according to dealers said further drop goal.
So far, the initiative to reduce the sales target, has become the industry consensus.
Pressure relief terminal
"This (production) is way better than the price." Xiao Dawei past few months have been concerned about the performance of the terminal market, he found that most dealer showrooms nationwide customers have declined, and dealer inventories a high rate. He said Ford will not let dealer inventories remain high going.
Lawley Cheung also said after the cut, hoping dealer inventories remain at normal levels, to ensure good operation and to maintain appropriate margins dealers. In addition to Ford, BMW Group statement versa, Engelhard interview also said it would reduce the supply of vehicles to dealers in order to fit better in the future.
Over the past few years, China's automobile market grew significantly, many car companies to take a more radical approach to expand production capacity. In 2014, total sales of SAIC, Dongfeng, FAW, Chang'an, Beijing, Guangzhou Automobile, Brilliance, Great Wall, Chery and JAC's top ten car companies is 21,076,600, accounting for over 90% of the national car sales.
And in 2015, as well as the above-mentioned 10 car prices BYD and Geely Automobile production goals set conservatively estimated at about 3250. If China's automobile market growth in 2015 and lasted for about 7% of GDP unchanged, market sales of about 25 million, which means that production target plan had developed car prices significantly excessive, proceed directly to exacerbate the plight of dealer inventory .
In addition, China Automobile Dealers Association published "China's auto dealer inventory early warning indicators of tune" The results show that the stock car dealers in May warning index was 57.3%, although more than in April dropped by 3.2 percentage points, but still 50% levels above the warning line. Thus, the domestic distributor inventory warning index has eight moon from the "red light."
Integrated recent media reports, at present, in addition to overall production, manufacturers have gradually adjusted monthly sales tasks notify the dealer, it is also wise to prevent the risk of car prices. When overall weaker market demand, pure "price" effect is obvious. In an interview with reporters of the dealer, and has joined the "price war" has not undergone any substantial change in brand sales, if taken to adjust production capacity to ease the way supply and demand, dealers fear will fall into difficult breathing situation.
Deputy Secretary General of China Automobile Dealers Association, Lang Xuehong said that the recent regional auto dealers operating activities, while making the situation has improved, but the show and other marketing activities will also result in increased operating costs, the price drop, but also overdraft June consumer demand. "If you always consider manufacturers complete their brand's market share and annual task, the result could be counterproductive."
Fine-tune
While the adjustment is a wise marketing, but car prices also need to address the challenges of the overall auto market through other means. "Car companies should take more proactive measures to ease the pressure, not simply by adjusting the production and marketing of fashion 'passive fight'." The source said. Deputy Secretary General of China Automobile Dealers Association, Luo Lei, also known as: "In the auto market growth in the context of micro, reduce overall increase does not mean that the various brands of lower car prices still a good strategy to seize the rest of the market share."
For Ford, the current situation, automotive industry well-known commentator Zhong Shi gives the following recommendation: "If you want to intensify the competition in 2015 to make a difference, Ford should be clearer compact layout, such as selling the product line more rapid improvement, Hafei accelerate the integration progress, improve marketing efficiency, continue to boost product quality and so on. "
From a market structure point of view, at present, car prices should continue to focus on the SUV, MPV and compact car segment, the adjusted overall sales goals, for "structured" environment adjustment car prices more accurate approach. According to the Automobile Association statistics data, in May, in car sales fell 10.08 percent of the time, SUV sales of 459,300, an increase of 43.90%, MPV sales of 140,500, an increase of 7.86%, an increase over 2014, although somewhat tightened, but still significantly higher than the overall increase of 1.2% for passenger cars, consistent with previous cases in April. In other words, the two plates, car prices are still articles to do, it can slightly tilt the plate with their own advantages. In addition, according to 2015 passenger car brand from January to May sales of the top ten rankings, compact-class model still sit tight as big as half of last year, car prices also continue cultivating.
In addition to the "structured" adjustment, effective marketing is also important. The past two years, there have been companies in marketing innovation, in addition to traditional marketing, investment and charity variety show brand profitable.
The quality problem is still the top priority, which is also the best car prices proactive favorable "weapon" in the more rational consumer choice, any external means are not as progressive in nature. "Whether solid basic skills will determine whether the car companies can win in this round of competition, and vice versa in the long run, no matter what challenges facing, quality will become the key condition to determine the winner." Zhang Zhiyong, said the auto industry well-known commentator .