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Re seize the right to define the mixed market

Publish Date: 2023.06.07

  There will always be successors who break through the rules and patterns established by their predecessors, which is the core driving force behind the evolution of automobiles from generation to generation.

  

  Recently, the prices in the hybrid market have gone crazy!

  

  At the beginning, it was a super hybrid electric drive Qijun, selling for 189900 to 199900 yuan. This price is already cheaper than the four-wheel drive Qijun version of gasoline cars, with the blade facing inward.

  

  Later on, there were two series of models in the Great Wall Xiaolong series, with prices ranging from 139800 to 179800 yuan. Compared to the previous Great Wall plug-in hybrid pricing system, the four-wheel drive product sold at a price of two wheel drive.

  

  Subsequently, Geely's Galaxy L7, the leading independent car company, placed its price between 138700 yuan and 173700 yuan, which was about 10000 yuan lower than expected. Coupled with the equity of 10000 yuan, the price was also unexpected. By comparison, the previous version of the Boyue L HEV, which had 10 degrees less battery and a lower configuration, would also cost 150000 to 170000 yuan.

  

  Then there is the Qichen Big V DD-i under Dongfeng Nissan, with a pre-sale guide price of 130000 yuan. The 110km pure electric range product continues to decline to 140000 yuan, and may have a top configuration price of around 160000 yuan when it is finally launched, or it may be cheaper than Great Wall Xiaolong and Geely Galaxy L7.

  

  再抢混动市场定义权

  

  All of their ideas point to one word: the same price for gasoline and electricity, the same price for electric cars and gasoline cars, and the same price for plug-in hybrid cars and gasoline cars. Although many external views consider plug-in hybrid technology to be a transitional technology, there are already successful precedents demonstrating that the BYD DM-i series occupies half of the new energy market, and plug-in hybrid products are the best choice for traditional fuel vehicle companies to transition to the new energy era.

  

  In the past period, the industry believed that only BYD had pricing power in the hybrid market, especially when it lowered the Qin PLUS DM-i to 99800 yuan and continuously won the sales crown in the sedan market. But from Qijun to Snapdragon, from Galaxy to Qichen, every core product in the mainstream market is constantly breaking the so-called pricing power of others and hoping to control this power in their own hands.

  

  On the contrary, the ultimate pressure on the hybrid market has shifted to the BYD Song PLUS DM-i Champions Edition, which will be launched in July. However, the hybrid market price system that has been refreshed time and time again is accelerating the reorganization of China's automobile pricing system, constantly forcing players to use updated technology and scale effect to reduce costs, and further accelerating the rapid progress of China's automobile towards hybrid.

  

  Price or price

  

  In the current automotive market, when competing for market share in the stock market, the first thing that moves consumers is definitely price, which is the first threshold.

  

  Especially at the beginning of the year, the price war launched by Tesla and a group of new forces ignited the price war from the new energy market to the field of fuel vehicles.

  

  With the trend of new energy and the shift in consumption trends, the positioning of fuel vehicle companies when launching new energy vehicles has gradually changed. The idea and strategy of always wanting to be a bit more expensive than fuel vehicles are being ruthlessly taught by the market.

  

  再抢混动市场定义权

  

  As the market share of new energy vehicles gradually moves towards 30% to 35%, the price and value system of the entire automotive industry has ushered in a new round of reshaping: updated industry chain gameplay, products that are more intelligent and electrified, sales and communication methods that are more in line with the taste of young people, and different rules have emerged in the booming Chinese new energy market.

  

  In addition, some companies that grasp the hot topics of the market inevitably shift their focus on the market and brand when showcasing their product strength and market competitiveness in a way that the younger generation of consumers are more accepting and understanding. Just like when it comes to new energy and hybrid, it's not because their product strength is the strongest, but because they have re established a set of evaluation standards recognized by consumers in the new era in a changing market.

  

  So any latecomer who walks behind NIO and BYD must use the latest standards to define their new products and strategies. Returning to Snapdragon or Galaxy L7, if they want to become popular overnight, their price must bring enough surprises to give consumers the opportunity to continue to contact and understand you, otherwise the pricing will be too high, directly closing the door to contact consumers.

  

  Previously, the author discussed with dealers and peers about the pricing of the Galaxy L7, and it is generally believed that it may set the price at around 150000 yuan. After all, this car is aimed at the BYD Song PLUS, and given the brand strength advantage, the starting price may be lower than the Song's 154800 yuan to 187800 yuan.

  

  再抢混动市场定义权

  

  But in the end, the price of the Geely Galaxy L7 was set at 138700 yuan to 173700 yuan, which was about 10000 yuan lower than expected. Coupled with the equity of 10000 yuan, compared to the product strength and price of the direct competitor Song PLUS, even if the terminal discount is included, the Geely Galaxy L7 can almost be said to be a complete victory.

  

  But in fact, whether it is the complete victory of product strength or price, it is almost foreseeable that no one can drive the currently popular Song PLUS off the championship stage, and its cycle may last for about 5 years. Because it is the pioneer of the plug and mix market, it has made consumers understand the advantages of plug and mix products, and will undoubtedly enjoy the dividends of the plug and mix market. At the same time, as more plug and mix players join, BYD's voice and influence in the plug and mix market will continue for a considerable period of time.

  

  But this does not mean that latecomers cannot try to carve out the cake of Song PLUS through product strength, crowd positioning, and price, and continuously promote the evolution of the mixed market pattern. Especially before the scale effect is formed and the cost gradually decreases, a group of new followers have to adopt the most direct and cruel low prices, or even sell cars, to attract consumers to put this model in the comparison basket.

  

  Of course, will strategies such as the ultra hybrid electric drive Qijun and Galaxy L7, which have the same price for gasoline and electricity, bring greater conflict to the original fuel vehicle market, and even disrupt the price and sales system of the original fuel vehicles? Even though many people outside have such doubts, multiple companies have already implemented such plans, indicating that conflicts in this regard are basically no longer present.

  

  再抢混动市场定义权

  

  Fan Junyi, the general manager of Geely Automobile Sales Company, said that there must be some conflict, but it is not as big as imagined.

  

  On the one hand, the prices of traditional fuel vehicles continue to decline. The original pricing system was under weak demand, and there was basically a discount of around 15000 to 20000 yuan on the terminal, which itself left room for the pricing of hybrid vehicles. On the other hand, there is a natural difference between the user group of fuel vehicles and the user group of plug-in hybrid and other new energy sources. Even if the price is the same, the internal diversion is extremely limited. Therefore, the equal price of gasoline and electricity will become an important core of the pure electricity distribution of hybrid fuel vehicles.

  

  Furthermore, if the proportion of people from gasoline vehicles to plug-in hybrid vehicles can be transferred to more than 1, this is also a landmark node for the successful transformation of electrification, and it is always right with the trend.

  

  Cheap, easy to use, without any hard edges, this is competitiveness. The new pattern of the hybrid market, opened by the price side, will be staged by various car companies and brands in the future.

  

  Hybrid, where are we heading?

  

  Firstly, it should be understood that from the current market trends and product plans of each company, hybrid will definitely become a core component of one-third of the future market. The players must be traditional large manufacturers with internal combustion engine market and heritage, including independent BYD, Geely, Changan, Great Wall, and Chery, and even Japanese brands will be fully integrated in the future.

  

  The reason is simple. Compared to switching directly from fuel powered vehicles to pure electric vehicles, the hybrid transition plan does indeed bring better accountability to the supply chain system of such large manufacturers, and it is impossible to switch off the upstream brothers who have worked together for enterprises and brands at once. Coupled with the uncertainty of battery technology and prices in the long-term future, seemingly conservative and gradual changes are actually the best way to deal with the industrial system of a large industrial chain cluster such as automobiles.

  

  The data level also continues to demonstrate this viewpoint. The sales of plug-in hybrid vehicles have directly increased from 210000 units in 2020 to 580000 units in 2021 and 1.49 million units in 2022. By January April 2023, the sales of plug-in hybrid vehicles were 600000 units, and this year they will achieve a breakthrough of 1.8-2 million units.

  

  再抢混动市场定义权

  

  From the perspective of the proportion of plug-in hybrid vehicles in the new energy market, this proportion has increased from 17-18% in the period from 2020 to 2021 to 23% in 2022, and then to 28% in the first four months of 2023. With the launch of various plug-in hybrid products throughout the year, the proportion of plug-in hybrid vehicles in new energy vehicles will remain above 30%.

  

  As a type of hybrid, plug-in hybrid vehicles are growing crazily in the unique market environment of China and are expected to become the best solution for hybrid products.

  

  Compared to the Japanese hybrid mode, which can only refuel but cannot charge, plug-in hybrid products have fully utilized the essence of "saving", as it is a green brand car that is exempt from purchase tax when purchasing; Due to fierce competition, the price of plug-in mixing has basically been priced at cost; Because it can be both gasoline and electricity, it is more in line with the more diverse driving scenarios of Chinese consumers, such as inconvenient energy replenishment and mileage anxiety. In addition, the emergence of large batteries, such as Sentinel mode, parking air conditioning, and other more intelligent experiences have given plug-in hybrid products more advantages and selling points.

  

  Since the hybrid market has become the core market of the current and future markets, can BYD's advantage be maintained for a long time? To study this issue, it is necessary to look back at the historical path of China's hybrid market.

  

  再抢混动市场定义权

  

  Between 2017 and 2019, the Japanese Toyota Honda hybrid opened the prelude to the Chinese hybrid market with its economic and fuel-efficient advantages, becoming a pioneer in the first round. At this point, the price of hybrid vehicles is about 1.3 times that of gasoline vehicles, which is equivalent to using the fuel saving money as the purchase price.

  

  From 2019 to 2023, BYD's plug-in hybrid system gradually overturned Japanese hybrid products and became a new leader with a more economical and inductive product power. At this time, the plug-in hybrid represented by BYD replaced the economic fuel efficiency of Japanese cars, and even achieved fuel consumption comparable to Japanese cars through technological advantages, providing a more diverse consumer experience for different consumers. This is also an important reason why Guangdong Province, the Japanese headquarters, was also conquered.

  

  Starting from 2023, with the emergence of Snapdragon, Galaxy and other series of products, they have strengthened their advantages in these areas by identifying consumer cognitive deficiencies exposed by BYD in intelligence, security, and technology configuration, attempting to overturn the plug-in hybrid market fortress established by BYD.

  

  再抢混动市场定义权

  

  This kind of disruption is not non-existent. Taking hybrid transmissions as an example, the best-selling plug-in hybrid cars currently use a single speed transmission. Then Great Wall introduced a two speed hybrid transmission, while Geely introduced a three speed hybrid transmission. The plug-in hybrid market used to only pursue economic and fuel saving attributes, gradually shifting towards a new track that requires both performance, energy conservation, and intelligence. There are many new breakthrough opportunities in the design, configuration functions, intelligent technology, comfortable cockpit, and other aspects of hybrid products in the future.

  

  So as the hybrid market is gradually guided by more products, consumers' attention will also gradually shift to this segmented market. The pioneer image established by BYD will also expand the diversity of this market with the addition of more popularizers, achieving a new round of changes in the market pattern, each leading the way for three to five years.

  

  Indeed, in any niche market, there will always be latecomers who break through the rules and patterns established by predecessors, which is the core driving force behind the evolution of automobiles from generation to generation.

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