Since March, the local government of Hubei Province, in conjunction with the Dongfeng Motor Company, Honda, Nissan, Citro?n and other local car companies launched an "epic" promotional activities, the hottest model Citro?n C6 subsidies of up to 90,000, after the concessions C6 entry-level version of only 121,600 yuan, the cost-effective is simply bursting. From the feedback of the local 4S stores in Hubei, the effect of this activity is immediately visible, once a stagnant C6, actually in the day of the event was snapped up. Although this subsidy is a temporary price reduction promotional activities, and sales area does not extend to the whole country, but it is the domestic auto market pattern of change a beginning.

As new energy vehicles continue to penetrate the lower price ranges, the market share of fuel vehicles is also being eroded. Specifically in terms of sales, fuel passenger cars in 2022 compared to 2021 sales directly reduced by 2.302 million units, while the new energy net increase of 2.687 million units. The cumulative sales of new domestic vehicles in January-February this year totaled 2.657 million units, down 21% year-on-year. Among them, fuel vehicle sales in January-February were 1.912 million units, down 29.5% year-on-year, while new energy sales were 771,000 units, up 23.5% year-on-year. It can be seen that under the general environment of the downturn in the car market, the fuel car market is shrinking, but the new energy vehicles have not been affected much. As a result, traditional automakers, represented by the Dongfeng system of joint venture brands, are facing tremendous pressure, and it is to help local automakers tide over the difficult times that Hubei has begun to engage in big auto promotions.

Objectively speaking, Hubei's car purchase subsidy is a good thing for consumers, but the subsidy policy, which restricts regions and brands, has a strong color of local protection. So other auto provinces are not going to sit idly by, such as Jilin for the FAW series of car companies to provide subsidies, Guangdong to Guangzhou Automobile series of cars have additional subsidy policy, the end result is from the local protection evolved into a fuel car collective price cuts.

For example, if a first-tier brand drops 20,000, a second-tier brand drops 40,000, and a third-tier brand drops even more. This kind of trampling price cuts in the past years the fuel car pricing system completely disrupted. The final result is that consumers' price perception of fuel cars will remain in the price reduction period for a long time, the traditional joint venture fuel cars in the eyes of consumers are no longer worth money, and then car companies want to raise the price up, the market may not buy the bill.

Forced by the pressure of sales, the future of these price cuts have to price for volume, in order to ensure profits, car companies can only use jerry-built way to compress costs, not only lead to consumers to buy the product is getting worse, but also let the brand in the past many years to establish a good image collapse, and even some models simply completely discontinued out of generation, no longer updated. In other words, the collective price cuts, although temporary, have really accelerated the decline of fuel cars.

At the same time, new car after new car price cuts, but also let consumers think that the price of new cars will continue to go down, with the market on the expected increase in price cuts, there will be more and more people ready to buy a car to postpone the plan, the new car sales are likely to experience a subsidy to bring the short-term prosperity, and then again to the bottom of the barrel.

So companies that originally planned to rely on subsidies to digest their inventories and turn around their finances are likely to face a tougher market situation again just as they take a breath. Even if the financial situation of the car companies intend to stabilize prices, those poor financial situation of the car companies can not cooperate, like the Hubei Dongfeng system of subsidies for the purchase of cars, provincial car companies would have liked to bite the bullet and hold on, the results of the Dongfeng themselves can not hold on to the first.

Knowing that, in the eyes of consumers, as long as the price is cheap, poor brand awareness, product shortcomings and then that is not a thing. After all, there is now a famous saying: 200,000 C6 is old-fashioned, 120,000 C6 is mature and stable. So in the second and third-tier brands and a brand price difference under the premise of the first-tier brand loyalty and appeal will become worthless, only price reduction is the truth.

On the other hand, the collapse of fuel car prices will soon put pressure on new energy vehicles. According to past industry estimates, the cost of purely dynamic vehicles in 2030 can only be equal to the fuel car, but this year's fuel car price cuts a large portion of the profits out of a large part of the price gap with the new energy vehicles, which weakened the attractiveness of new energy vehicles. In front of the same size, configuration, fuel cars if the price is cheaper than the new energy vehicles, for the user with a small budget, will obviously tend to buy cheaper fuel cars. So this year's big price cuts in fuel cars, not only in the roll of their own, but also in the roll of new energy vehicles.

The collapse of new car prices will naturally affect the market for used cars, after all, a car's second-hand value retention rate, has always been closely linked to the new car transaction price. The recent fuel new car prices plummeted, used car dealers in the collection of cars will be "dead" in the price, after all, who do not dare to guarantee that the fuel car prices will not continue to decline, used car dealers certainly do not want to collect the car smashed in the hands of the car, which will also lead directly to the owners of fuel cars have been held in the future, if you want to sell the car, you will face a very serious automobile! The problem of depreciation of the value of the car.

As for the second-hand cars that have entered the market circulation naturally can not be spared, after all, some of the larger models, the current price of new cars is even cheaper than the second-hand price of the car dealers, in order to not let the vehicle smashed in the hands of the car dealers can only be hard to lose money to sell. To the highest volume of this price cut Citroen C6, for example, last year in the second-hand market, 1 year old C6 400THP Comfort Edition collection price of 140,000, but now the new car discounts are only sold 136,800, cheaper than the second-hand car.

So some used car dealers see the new car big price cut, immediately the C6?400THP Comfort Edition price down to 1268,000, of course, there are some merchants can not bear to cut meat, still hanging online 139,800 price to sell. After this painful lesson, I believe that the next period of time, used car dealers may not dare to touch the C6, even if it is bold enough to dare to collect the C6 car dealers, but also will significantly lower the price of the car, C6 from now on will become a very unprotectable value of the car.

It's worth noting that there is no shortage of Toyota, Honda, Nissan and other Japanese brands on the local subsidy list. In the past, Japanese brands have created an image of value preservation for users, and even to maintain this image, Toyota and Honda even preferred to have lower sales volume, not willing to cut prices, as a way to ensure that new car prices are stable.

Because of this, the previous Japanese joint-venture car value has been higher than the domestic car, coupled with the early Japanese cars are really more outstanding reliability performance, only to create these years of joint-venture car higher price premium ability and brand recognition. Here we may take Honda UR-V as an example, this midsize SUV although sales are not high, but the terminal discount is not big, new car prices are very stable, so the UR-V's 3-year warranty rate is as high as 79.56%, second only to the Toyota Hollanda.

But due to the weakness of Japanese automakers in the new energy field in the past two years, even the hot-selling models of Toyota and Honda have begun to have relatively large discounts at the terminal. This sudden official subsidies, but further to the Japanese car prices have a great impact. For example, this year's Honda UR-V in Hubei, a direct drop of 68,000, the original 1 year old used UR-V 370TURBO 2WD Zunya Edition collection price of up to 238,800, but now the new car is only 211,800, lower than the collection price of used cars! So the situation of Japanese cars like the UR-V is very similar to the aforementioned Citroen C6, whose used car prices are likely to dive for some time to come. And after losing the gold standard of value retention, it will become increasingly difficult for Japanese cars to maintain a high premium on fuel.

In contrast, national brands that have made a faster transition to the new energy sector have suffered less in the price war. BYD, for example, plug-in hybrid Song PLUS lineup is currently only 6888 yuan of official concessions, pure electric car Seal concessions are only 8888 yuan, compared with the joint venture fuel car tens of thousands of concessions at every turn, the national brand price cuts are simply less pathetic. It can also be seen, national brands in the new energy field dominance, in this wave of stampede price cuts, really got a tangible embodiment.

This year's fuel car collective price cuts, both forced self-help, but also to the new energy Jedi counterattack. But in any case, fuel car price cuts is tantamount to drinking hemlock to quench thirst, a short period of low prices can indeed be exchanged for sales growth, but consumers originally belonged to the original joint venture fuel car high-priced halo, but will never come back. So, this big price cut is essentially accelerating the demise of fuel cars in the Chinese market, the major car companies in addition to the new energy transition as soon as possible, there is no way back to speak. 2023 for the Chinese auto market is a turning point, fuel cars gradually lost its historical status, the rapid rise of domestic new energy, such a change is likely to affect the development of China's automobile market in the next few decades, let's wait and see! Let's wait and see!

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