Jul 12, 2024 04:04 AM
BUSINESS
SAIC Volkswagen Slashes Auto Prices as Brutal Price War Takes Toll on Joint Ventures
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A SAIC Volkswagen dealership in Handan, Hebei province, on April 5, 2024.
SAIC Volkswagen has slashed the price of several of its main models with discounts of up to 59,000 yuan ($8,100) in the latest round of a brutal price war started by new energy vehicle (NEV) makers.
The move, announced Wednesday, means the starting price for SAIC Volkswagen’s entry-level Lavida will drop to 69,800 yuan, the SUV Tiguan to 149,900 yuan, and the pure electric ID.3 to 125,900 yuan.
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Explore the story in 30 seconds
- SAIC Volkswagen reduced prices on several models by up to 59,000 yuan ($8,100) to boost sales amid a competitive market driven by NEV makers.
- The company's first-quarter sales in 2024 rose by 9.6%, but overall first-half sales dropped by 7.4% year-on-year, influenced by BYD's price war and intense competition.
- Domestic NEV brands gained market share, with local brands capturing 61.9% of the market in the first half of 2024, while German, Japanese, and American brands saw variably affected market shares.
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Who’s Who
- SAIC Volkswagen
- SAIC Volkswagen has initiated its second round of price cuts, slashing up to 59,000 yuan off several models to enhance sales amid intense competition, especially from NEV makers. Despite a 9.6% sales increase in the first quarter of 2024, second-quarter sales dropped by 4.7% year-on-year. The overall sales for Volkswagen in China fell by 7.4% year-on-year in the first half of 2024. The company is also focusing on launching more plug-in hybrid and pure electric models.
- BYD
- BYD's aggressive price war has significantly impacted SAIC Volkswagen's sales, particularly affecting fuel-vehicle rivals. This has led to a sales decline for SAIC Volkswagen in the second quarter of 2024. The overall pressure from new energy vehicle makers like BYD has prompted traditional automakers to slash prices and boost competitiveness.
- GAC Honda Co. Ltd.
- GAC Honda Co. Ltd. faced significant challenges in the first half of 2024, with sales declining by 28.3% year-on-year. This decline is part of a broader trend affecting joint ventures amid intense market competition and the rapid growth of domestic new energy vehicle brands.
- GAC Toyota Co. Ltd.
- GAC Toyota Co. Ltd. saw a 25.8% decline in first-half 2024 sales year-on-year amidst intense market competition, especially from domestic brands. They plan to compete with local plug-in hybrid models by introducing petrol-electric hybrids, which use small batteries for low-speed power and start-up, eliminating the need for external charging infrastructure.
- Tesla Inc.
- Tesla Inc. is facing sales pressure in China, with June sales falling by 20.1% year-on-year to 59,000 vehicles. Despite American brands maintaining market share, this decline highlights challenges Tesla encounters amid the competitive NEV market.
- General Motors Co.
- General Motors Co. struggled in the Chinese market, with sales from its joint venture, SAIC-GM, halving in the first half of 2024. This decline contrasts sharply with competitors like Ford’s joint venture, Changan Ford Co. Ltd., which saw a 13.4% sales increase.
- Changan Ford Co. Ltd.
- Changan Ford Co. Ltd., Ford's joint venture in China, experienced a 13.4% increase in sales for the first half of 2024, reaching 112,000 vehicles. Despite this growth, its overall market share remains small compared to other players in the Chinese market.
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What Happened When
- First quarter of 2024：
- SAIC Volkswagen sold 248,000 vehicles, a 9.6% increase.
- April, 2024：
- SAIC Volkswagen launched a new version of the Tiguan equipped with DJI’s intelligent driving system.
- April, 2024：
- Jia Jianxu, former general manager of SAIC Volkswagen, said in an interview that joint ventures cannot keep cutting prices like their local rivals.
- Second quarter of 2024：
- SAIC Volkswagen’s sales fell by 4.7% year-on-year to 264,000 vehicles.
- First half of 2024：
- Volkswagen’s overall sales in China dropped 7.4% year-on-year to 1.452 million vehicles.
- First half of 2024：
- GAC Honda Co. Ltd. and GAC Toyota Co. Ltd. saw their sales decline by 28.3% and 25.8% year-on-year, respectively.
- First half of 2024：
- Local brands accounted for 61.9% of China's overall sales, an 8.8 percentage point increase year-on-year.
- First half of 2024：
- General Motors Co. struggled, with SAIC-GM’s sales halving.
- First half of 2024：
- Changan Ford Co. Ltd. saw a 13.4% increase in sales to 112,000 vehicles.
- June, 2024：
- Tesla’s sales in China dropped 20.1% year-on-year to 59,000 vehicles.
- June, 2024：
- NEVs accounted for 48.4% of domestic passenger car sales, while NEVs made up only 7.4% of total sales for major joint ventures.
- Wednesday, 2024：
- SAIC Volkswagen announced price cuts for its entry-level Lavida, SUV Tiguan, and pure electric ID.3.
- 2024：
- Several of SAIC Volkswagen’s main models were slashed in price with discounts of up to 59,000 yuan.
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