Price rise is a key word that cannot be bypassed by the automobile industry in the near future. After the rising price of new energy vehicles, the price of fuel vehicles also began to rise. Mercedes Benz (hereinafter referred to as Mercedes Benz), BMW and other car companies have announced price increases. Mercedes Benz’s s S-class car Maybach led the price increase list with an increase of 121000 yuan.
Zhang Xiang, a distinguished expert of China Expo think tank, believes that price increase is a common marketing means for luxury cars, which can not only adjust the contradiction between supply and demand, but also reflect the preservation of models. At the same time, due to price changes, it naturally attracts people’s attention and can earn enough market attention.
the maximum price increase of fuel vehicles is 121000 yuan
Since March, nearly 20 new energy vehicle enterprises have announced price increases, involving nearly 40 models. Specifically, Tesla raised its price three times in a week, with a single increase of up to 20000 yuan; The price adjustment ceiling of Xiaopeng automobile is also as high as 20000 yuan; Weima automobile is as high as 26000 yuan. The highest price increase of all models of zero running car C11 is 30000 yuan, becoming the new energy vehicle enterprise with the highest single increase.
The first shot in the price rise of fuel vehicles was fired by Mercedes Benz. On April 3, Mercedes Benz announced that the prices of its fuel models were increased. The models with increased prices were mainly imported models, including Mercedes Benz imported C-class, E-class, S-class and Maybach, as well as some domestic models. The price increase of Mercedes Benz ranges from 3000 yuan to 121000 yuan, of which the price of S-class Maybach is up to 121000 yuan.
After Mercedes Benz’s official announcement, BMW announced on April 12 that the price and configuration of BMW 3 series, X3, x4, 4 series and Z4 have been adjusted, and the price has been increased by 1600 yuan to 11000 yuan. Abroad, as of the end of March, BMW has announced a price increase of about 3% in Europe and India. According to Dr. Nicolas Peter, the director in charge of Finance and China Affairs of BMW Group, the overall manufacturing cost of BMW may increase by $1.2 billion due to the rise of raw materials. Therefore, the price of all BMW models in Germany and other parts of Europe has to be increased by 3%, and the price rise of BMW in the North American market is also under follow-up consideration.
It is worth noting that the price increase is also due to a domestic automobile brand – Great Wall Motor Company Limited(601633) Wei brand automobile.
On the same day that BMW announced the price increase, Wei brand automobile announced that it would adjust the official guide price of coffee series such as Macchiato, latte and mocha, with an increase of 500012000 yuan. Among them, makido dht-phev has the highest price increase, with a price increase of 12000 yuan.
According to public information, Wei brand automobile is a high-end brand under Great Wall Motor Company Limited(601633) banner. According to the official website, Wei brand automobile has five models on sale. After the price rise, the price of all models is more than 150000 yuan.
Mercedes Benz and BMW have increased their prices. What about Audi, an old player in the luxury car camp? On the 18th, Zhongxin Jingwei consulted the Audi sales store in Beijing. The clerk said that there was no price increase for the models on sale and no notice of price increase was received.
In addition, the salesperson of Buick, Nissan, Honda and other fuel vehicles gave similar replies. There is also a wave of “disguised price increases” by car enterprises in the way of reducing concessions. Public reports show that some medium-sized cars and popular SUV and MPV models for household use have a terminal discount range of nearly 10000 yuan some time ago, but now it has “shrunk” to about 5000 yuan.
Some media reported that some car companies also have the idea of raising prices, but “ordinary fuel vehicles rarely raise the official price of models, so we should be careful”.
From the international market, it is publicly reported that in February this year, Audi adjusted the price of all models in the Australian market, ranging from $600 to $7600. Kohei takeuch, Honda’s chief financial officer, told the media recently: “we usually digest the rising costs through internal efforts to reduce costs, but now the increase is too large to digest.”
cost pressure caused by rising raw materials
It is reported that a number of car companies are stopping or expected to stop the whole vehicle production of fuel vehicles, and “de fueling” has become a trend. On April 3, the automobile enterprise Byd Company Limited(002594) announced that it would stop the production of fuel vehicles from March, and would focus on pure electric vehicles and plug-in hybrid vehicles in the future. In addition, according to the Shengang Securities Research Report, Chongqing Changan Automobile Company Limited(000625) , BAIC group, Toyota, Nissan and other auto enterprises plan to realize “de fueling” in 2025.
Why should the price of fuel vehicles rise in the trend of “de fuelling”? The rising prices of raw materials, chips and core parts have brought cost pressure, which is the explanation given by Mercedes Benz, BMW and Wei brand cars.
According to the official website of Wei brand automobile, the price rise is affected by comprehensive factors such as the sharp rise in the prices of raw materials, chips and core parts. Li Ruifeng, CEO of WeiPai automobile, also wrote on social media: “now, not only the cost of chips and battery materials continues to rise, but also the prices of steel, rubber and aluminum alloy are rising. It’s really unbearable.”
Tuyuan Weibo @ Wei Pai Li Ruifeng
Zeng Qinghong, chairman of Guangzhou Automobile Group Co.Ltd(601238) said at the recent financial report media communication meeting that the cost of Guangzhou Automobile Group Co.Ltd(601238) increased by 7 billion yuan in 2021 due to the rise in the prices of raw materials and parts.
Zhang Xiang told China Singapore Jingwei that under the influence of the conflict between Russia and Ukraine, the raw materials and parts of imported models have indeed been affected. “In the European automobile industry, Ukraine and Russia are important suppliers of raw materials and parts such as automobile harness, neon gas, metal palladium and metal nickel. Under the influence of the war, factories in Ukraine and Russia are facing the dilemma of shutdown and the risk of supply interruption. In this case, European Automobile Enterprises need to find new supply channels. For imported models sold in China, it directly increases the cost of raw materials and logistics risks. Like this price increase Most of Mercedes Benz’s imported C-class, E-class, Maybach and other models are affected imported models. ” Zhang Xiang said.
Luo Lei, Deputy Secretary General of China Automobile Circulation Association, pointed out to Zhongxin Jingwei that at present, most of the models with price increases are in short supply. Whether the price of fuel vehicles will rise collectively like new energy vehicles depends on the pricing strategy of the main engine factory, but for ordinary vehicles, the price increase will affect sales.
experts say marketing is not ruled out
For luxury cars, price increase is a common means to adjust the contradiction between supply and demand and alleviate the pressure on production capacity. When the number of orders exceeds the delivery capacity, car companies will choose to raise the price to ease the delivery pressure. “After the price rise, consumers who are willing to spend will have the mentality of ‘wait and see for another period of time’ and choose a more cost-effective time to place an order. However, the price rise may also make consumers with urgent purchase demand turn to other brands with higher cost performance.” Zhang Xiang explained to Zhongxin Jingwei.
In addition, car companies will use price increases to stimulate sales. “A moderate price increase can stimulate sales. After the price increase, some consumers will think that this car is very valuable, so as to enhance their enthusiasm for buying cars.” Zhang Xiang said.
As for Wei brand cars, in addition to the general price rise of raw materials and the impact of the epidemic, Zhang Xiang believes that the price rise does not rule out the possibility of marketing. “The price rise of Wei brand cars does not rule out the possibility of attracting the attention of the market, the media and consumers. After all, price changes naturally attract attention.
”He pointed out that China’s fuel vehicle production capacity has been surplus, so domestic fuel vehicles are easy not to raise prices, which will directly affect sales.
Zhongxin Jingwei observed that Wei brand automobile is the only automobile enterprise that has put the price increase announcement in a prominent position on the home page of the official website. At the same time, the response related to the price increase is the top of its official microblog. Since April 12, as of press time, the price increase announcement has been posted on the home page of Wei brand automobile official website for 8 days. However, according to Li Ruifeng’s previous document, the price of existing cars in distribution stores that you can buy is still not increased.
Zhang Xiang believes that the symbolic price increase of WeiPai automobile is conducive to shaping its high-end brand image. “As a high-end brand in the Great Wall Motor Company Limited(601633) brand matrix, one of the main roles of WeiPai automobile is to shape the high-end brand image. Great Wall Motor Company Limited(601633) does not expect WeiPai automobile to generate most of its revenue, but just hand over the sales to other best-selling brands, such as Harvard H6.”
According to the annual report of Great Wall Motor Company Limited(601633) 2021, the net profit in 2021 was about 3.967 billion yuan, and the total comprehensive income was about 4.075 billion yuan, an increase of about 1.227 billion yuan compared with 2020.
In terms of sales volume, according to the March production and sales express released by Great Wall Motor Company Limited(601633) , Wei brand cars accounted for only 4.71% of the sales volume in Great Wall Motor Company Limited(601633) March, with 4755 units, which is the lowest among the five brands under Great Wall Motor Company Limited(601633) brand. In the same period, the sales volume of Haval brand was 54534 units, and the sales volume of the penultimate tank brand was about 1.9 times that of Wei brand.
Compared with the models of other car companies, according to the data of the passenger Association, Harvard H6 ranked third with 71411 SUV sales from January to March 2022, while Wei brand cars were not on the list.
