Luxury brand pushes down middle-class car "Red Sea" to fight

With the transaction price of some luxury brand models such as the BMW 3 Series increasingly approaching the mid-to-high-end car price range, many mid-to-high-end brands have begun to adopt a price-cutting strategy that avoids the virtual reality, while the Japanese, German, and U.S. The high-end car series, through continuous new listings and price promotions, has pushed the competition in the "Red Sea" of the mid-to-high-end auto market to a hot topic.

Entry-level luxury cars "price cuts" strike luxury brands have experienced several price cuts since last year. Some entry-level models have already reached the price range of mid-to-high-end cars, and entry-level models have even reached a price of 200,000 yuan. 300,000 yuan range. For Mercedes-Benz, BMW, Audi, Mercedes-Benz C 180, Mercedes-Benz B-class; BMW 318i, BMW 1 Series; and Audi A4L1.8TFSI, Audi A3 are typical representatives.

In the face of this situation, consumers and distributors of high- and mid-level cars have shown some helplessness. Li Bing, who purchased a top version of Sonata 8 last year, said that according to the current transaction price, the BMW 3 Series can be returned home this year. From the dealer's point of view, the intrusion behavior of luxury brands has a great influence on the consumer's intentions of consumption, which is extremely unfavorable to the sales of mid-to-high-end vehicles.

In fact, last year in the high-end car market there was a consumption upgrade, consumers tend to buy higher-level models, middle-level models have gradually become the first choice for home buyers. The concept of car purchase by Chinese auto consumers first values ​​the price-performance ratio, followed by quality. Due to the lack of quality, technology and services of independent brands, the brand image and quality of joint ventures and foreign-invested automobiles are more valued by consumers.

The report of China's auto consumption market survey in 2011 pointed out that compared with 2010, 66.8% of consumers tend to buy higher-level models, and only 8.3% of consumers buy lower-level models. The survey shows that the price reduction of cars and changes in demand are the main reasons for consumers to purchase higher-level models, accounting for 36.8% and 30% respectively.

"Butterfly effect" triggered price wars The "butterfly effect" caused by the further decline in the price of entry models for luxury brands, combined with the main demand point of the "cost-effectiveness" of the old models of the Camry models, led to an increasingly intense competition in the mid-to-high-end car market due to the "two-pronged approach." A new round of price war is expected to begin in April.

In view of the "butterfly effect", many mid-to-high-end car brands have begun to take measures to cut prices to cope with the strategy in order to maximize market share. At present, the mid-to-high-end car brands have gradually begun to lower the price of their products to 200,000 yuan or less. In order to comply with the next situation, the seventh generation of Camry will re-adjust the selling price to 179,800 yuan; Accord's current Guangzhou discount price is only 168,800 yuan; Tianhe's comprehensive discount rate has increased to 35,000 yuan, the lowest price Also for 168,800 yuan; New Passat's preferential policies have begun to gradually "issued", after a comprehensive discount of 13,000 yuan after the minimum price of 191,800 yuan.

Luo Lei, deputy secretary-general of the China Automobile Dealers Association, pointed out that the reason why mid-to-high-class cars can now adopt a price reduction strategy that avoids as much as possible is actually because they still have a certain degree of price reduction space in the Chinese market. The current price cuts do not mean much. Dealers are already "losing cars at a loss."

The price reduction promotion has become a weapon for dealers to seize the market. Changes in prices are conducive to the formation of full competition in the mid-to-high-end car market, which in turn triggers a new round of price war in the entire market segment. Whether it is the price of luxury cars, or the high-end car is worth mentioning, the ultimate benefit is consumers. After all, buying the right car at an affordable price is what consumers really care about.

At present, the dealers are actively expanding the service chain in order to obtain maximum economic benefits while the vehicle price is lowered. In the increasingly low profit of auto retail, after-sales service will become a new growth point for dealers' profit.