April has passed, and May is also coming to an end. Looking back at the sales targets set at the beginning of the year, most car companies are probably worried about not meeting the sales targets.

Setting annual sales targets has become a basic operation for various car companies, ranging from conservative estimates of 10% to 20% to geometric surges of doubling. Last year, the pursuit of sales targets by car companies also provided strong support: in 2024, BYD's annual sales exceeded 4 million vehicles, while brands such as Chery, Geely, and Ideal reached new highs. The annual automobile production and sales both crossed the 31 million vehicle mark, breaking historical records.

Has the deviated sales target become a promotional tool?

However, on the other side of the coin, the rapid growth in sales is undoubtedly catalyzed by the abnormal price war in the industry, and profit pressure is inevitable. In 2024, the profits of the automotive industry will be compressed to 4.3%, and many brands will also be trapped in the vicious cycle of increasing revenue without increasing profits.

It cannot be denied that as a typical representative of the manufacturing industry, achieving economies of scale by diluting costs through sales volume is almost the only way for the automotive industry to make profits. However, in the context of consumers being almost immune to price incentives, brands increasing revenue without increasing profits, and price wars turning into value wars, issues such as "whether the emphasis and pursuit of sales are excessive" and "who benefits from sales targets" urgently need new scrutiny and thinking.

When the propaganda orientation surpasses the value orientation

Before discussing whether sales targets are necessary at this stage and who benefits from them, it must be acknowledged that their emergence has a certain significance.

As a direct reflection of the market share of car companies, high sales usually mean that the brand has stronger competitiveness and consumer recognition in the industry. Publicizing future sales targets can not only demonstrate competitiveness to the market, but also boost investor confidence. Previously, after Hyundai announced its global annual sales target of 5.55 million vehicles by 2030, the market responded enthusiastically and the stock price rose by 4%.

Following the same logic, with the listing of the Wenjie M8, Wenjie has been tirelessly releasing small and large fixed data, not only to demonstrate its popularity, but also to show off its muscle to investors and indirectly demonstrate the company's healthy operating status.

In addition, the sales targets set based on the development and market trends of the automotive industry not only clarify the clear direction of the company's future development, but also drive the optimization of resource allocation, better strategic planning, and resource allocation. They also disclose the reference amount of purchasing data to the supply chain.

Taking Ideal Automobile as an example, during the communication with Ideal Automobile's chassis engineers, Automobile Corporation learned that before the 2025 L series facelift, the suspension alone needs to supply over 300000 units per year. The high demand for air springs has also led Ideal Automobile to work hand in hand with suppliers such as Baolong and Konghui, and to achieve a lower price in the air spring industry through economies of scale, allowing more users to enjoy a more comfortable driving experience.

In last year's dispute over price negotiations between BYD and suppliers, it can also be seen that top car companies with large orders and higher sales targets naturally have more bargaining power.

At the same time, sales targets are also excellent materials for promotion. At the venue of the 2025 Changan Automobile Global Partner Conference, as Zhu Huarong stood in front of the big screen with a passionate speech on the theme of "completing the annual task target with a distance of '3311' by 2025 without wavering", Changan Automobile's confidence, determination, ambition, and ambition to target sales of 3 million vehicles were fully displayed.

Has the deviated sales target become a promotional tool?

But as market competition intensifies and user brand awareness becomes an important resource, the promotional and guiding role of sales targets seems to surpass practical value. It is not difficult to find that only seven car companies have achieved their sales targets by 2024, which is quite rare. Among the new force brands that often aim to achieve a 50% increase or even double sales, only Zero Run, Ideal, Xiaomi, and HarmonyOS have fulfilled their sales promises.

However, this year, it is unclear whether the high target is difficult to achieve or the strong consumer wait-and-see sentiment has affected the retail market. As of the end of April, only Xiaopeng Motors, a new force brand, has achieved over 30% of its sales target, and its sales progress is progressing rapidly.

Has the deviated sales target become a promotional tool?

Even if sales cannot meet expectations, the market is tolerant. Apart from appearing in the newspapers and being ridiculed for comparison, unexpected minor flaws will soon be forgotten by the market amidst the overall upward trajectory of sales. In contrast, after the sales growth is combined with the achievement of the target buff, the brand image of car companies will also be significantly improved.

Setting sales targets can be seen as a risk-free investment, where car companies can confidently demand quantity without worrying about after-sales service. This also lays the groundwork for some companies to have overly optimistic or blindly optimistic sales targets.

Who benefited from the sales target of 02 deviation?

At the communication meeting for the launch of the Ideal MEGA on March 1st last year, you mentioned a target sales volume of 8000 units. Within the next 90 days, Ideal Auto adjusted its sales target. Today is the launch of the Ideal MEGA Home, and there is no further discussion on sales targets. What have you experienced during this year? ”

In a roundtable interview with Ideal Auto at the Shanghai Auto Show, some media outlets asked the aforementioned particularly sharp questions.

After a brief moment of reflection, Liu Jie, the President of Ideal Automotive Product Line, gave a clear and steady answer: "We had communicated the sales target of Ideal MEGA to the outside world a long time ago, but later on, during the review process, we found that our own sales target is essentially of little value to users. Whether the sales target is 8000 units or 10000 units, in the eyes of users, this is the company's own idea and plan, and they are more concerned about what kind of product value the brand can provide. ”

Has the deviated sales target become a promotional tool?

This also means that the sales targets set by car companies, in the eyes of consumers, are more like a 'self promotion' that is irrelevant. From this, it is inevitable to raise the question: Who is benefiting from the proposal of sales targets?

It must be acknowledged that the setting of sales targets has played a positive role in increasing brand sales, but sales targets also lead car companies to focus more on competition and short-term results, rather than solidly focusing on product value for users.

On the other hand, exchanging price for quantity has gradually become the only way to increase vehicle sales. In this way, the profits of car companies are inevitably under pressure, and cases of rising operating income but significant decline in net profit are not uncommon. From an industry perspective, in 2024, while the revenue of the automobile manufacturing industry increased by 4.1% year-on-year, the total profit decreased by 8%. Even more deadly is that a single ripple in the supply chain can have a ripple effect, and a decline in profits has become a common problem throughout the industry. Not only downstream car companies, but also upstream suppliers such as Cummins and Magna have suspended or lowered their performance expectations.

In addition, excessively high sales expectations can easily mislead suppliers. When car companies use sales targets as bargaining chips to lower supply side prices, if sales do not meet the standards, in addition to low profits and inability to sell more, suppliers may also be trapped in the dilemma of overstocking and self digestion of inventory.

03 Need to return to tool orientation

In markets where sales targets are prevalent, there are also rare exceptions. In 2024, Great Wall Motors decisively abandoned Poly and sold 1.2333 million new cars throughout the year, which is the same as the annual sales volume in 2023 and far from the annual sales target of 1.9 million vehicles.

Although the annual sales remained largely unchanged, Great Wall Motors achieved a sharp increase in profits. According to the annual report, in 2024, Great Wall Motors achieved a total operating revenue of RMB 2021.95 billion, a year-on-year increase of 16.73%; The net profit attributable to the parent company was 12.692 billion yuan, a year-on-year increase of 80.76%; Deducting non recurring net profit of 9.735 billion yuan, a year-on-year increase of 101.40%.

The increase in profits is mainly related to the growth in sales of high-end car models. In 2024, Great Wall Motors sold 309600 vehicles worth over 200000 yuan, a year-on-year increase of 37.13%. The low-end model Ora, which once carried the heavy responsibility of Great Wall Motors' transformation, saw a 41.69% decline in sales.

Has the deviated sales target become a promotional tool?

BYD, Geely, Chery and other top companies not only exceeded their sales targets, but also achieved dual growth in revenue and net profit. The same goes for Zero Run and Xiaomi. How can we say this

The above statement is indeed true. But if analyzed in depth, it can be found that BYD, Geely, and Chery have already achieved stable industry leaders, and their economies of scale can be maximized. In addition, their sales targets and development directions are also very clear and reasonable. However, Xiaomi and Leapmotor already have a low market share and are in a climbing stage. The increase in sales can quickly amplify the economies of scale. Among the above car companies, the guidance of sales targets is undoubtedly superior, which precisely confirms the positive role of reasonable sales targets in the development of enterprises and industries.

It can be seen that sales targets are not original sin. In the era of industrialization, it was a beacon of economies of scale, an abacus for cost dilution, and a "signpost" for car companies to prove their survival ability to the market. But as the industry enters the deep waters of intelligent electrification and consumers return to rational purchasing, the cost of blindly pursuing sales targets is far heavier than imagined.

Has the deviated sales target become a promotional tool?

Fortunately, the seeds of awakening have sprouted in the cracks. The counter trend growth of Great Wall Motors' "Abandoned Volume Poly" proves that profit growth is not solely dependent on scale. The research results of the "2025 McKinsey China Automotive Consumer Insights Report" also show that consumers' enthusiasm for shortening the release cycle of new car models and new technologies is much higher than their enthusiasm for price wars: the net stimulus effect of the former is as high as 10.8%, far exceeding the latter (3.6%).

The sales target will not disappear, but it must be relegated to a strategic tool rather than a strategic purpose. After all, sales without healthy profit support are just a numbers game of drinking poison to quench thirst; And the growth that deviates from user value will eventually become dust under the wheels of the times.