The fierce price war in China automobile market for many years always puzzles consumers: Where is the bottom line of automobile price? Many years after China's entry into WTO, when the price of imported cars remains high, there are always consumers wondering: When will China consumers stop being suckers?
Reality tells us that as long as the core technology and brand appeal are still lacking, the bottom line of China automobile price is the resource tolerance limit.
The price war that has lasted for many years makes the automobile price approach the bottom line quickly, so the price reduction of China automobile will be weakened in 2008; Under the reality that the good news of the policy is still unclear, the price reduction of imported cars is still an illusion.
Tariffs are decreasing year by year. Why did the price of imported cars increase by more than 8% last year? The reason is that since the implementation of the Measures for the Administration of Automobile Brand Sales for two years, the distribution right of imported cars has been basically controlled by foreign general dealers, resulting in the price of imported cars rising instead of falling. At present, the relevant state departments are revising the "Measures" and preparing to appropriately liberalize the parallel import channels of imported cars to curb the monopoly power of foreign general dealers on the prices of imported cars, but the effect will not be immediate. The main reason is that, while relaxing the import channels, there are good news and bad news: from March 1 day, China will implement VIN code verification management for imported cars. Logically speaking, this is a policy to regulate the order of the automobile market and prevent automobile smuggling. However, due to the complicated filing procedures and high cost, it is difficult for ordinary sellers to make it, which further improves the distribution threshold of imported cars and will also keep the monopoly of foreign distributors in the short term. From this point of view, as long as the distribution right of imported cars is still in the hands of foreign distributors, it is difficult to reduce the price of imported cars in 2008.
In 2008, due to the rising cost of raw materials and labor, the price reduction space of domestic cars will also be more restricted. Cars are big steel users, and the proportion of steel used in cars is as high as 60%-70%. Driven by the rising price of iron ore in the world, the price of steel in China has become a heavy hammer to increase the cost of automobiles. At present, the price per ton of steel in Baosteel has increased by about 15% in 600 yuan. Compared with the home appliance industry, which uses less steel, the price chain reaction caused by the price increase of steel in the automobile industry will be more obvious. The CPI increase since last year will continue this year, which may lead to a sharp increase in labor costs and will cut another piece from diluted profits. Cheap labor and cheap resources are the strongest competitiveness of China's automobile industry, but in the global resource shortage panic, these two advantages are rapidly disappearing.
In order to resist the rapid increase of cost, the automobile industry will adopt the strategy of financing by marriage with the steel industry. SAIC, Baosteel and Donghua Company, which is controlled by SAIC, recently signed a cooperation agreement on mold project to increase capital and reorganize Nanqi Mold Equipment Co., Ltd. Naturally, the higher CPI is not always a side effect on the automobile industry. When CPI drives the price of automobile after-sales service to rise, the rich back-end profit source of automobile industry chain will become an opportunity for the development and growth of China automobile aftermarket. The price increase of resources will bring about the redistribution of industry interests. When consumers have to pay more for after-sales service, China automobile aftermarket will gradually embark on the road of intensive development.
In the past few years, with the rise of steel prices, automobile enterprises have adopted a powerful cost control model to deal with the fierce price war, and the cost space has been squeezed rapidly and even reached the bottom line. Among them, small-displacement car companies are the most sensitive to cost, struggling with meager profits, and have been unable to reduce prices for many years. Although mid-to high-end cars can still rely on technology and brand value, the profit margin is getting smaller and smaller due to the rising cost and price of raw materials. In order to avoid homogenization competition, high-end products will win more with personalized design, and environmental protection technology will become the strongest competitiveness of automobile enterprises. For example, the new Audi AL8 is equipped with Audi's latest FSI engine, and the carbon dioxide emission per kilometer is only 199g, which is far more environmentally friendly than its peers. It can be seen that in 2008, the competition of mid-to high-end cars will be more reflected in high technology, rather than competing to reduce prices.