Post-epidemic era auto market projection (below): competition, listing and pricing challenges for car companies

If we follow the previous projection, China's auto market will suffer a decline of about 5-10 percent in 2020, with another 100,000 yuan class of models in hot demand and luxury brands under more pressure.

Review: post-epidemic era car market projection (above): decline is doomed? Changes in consumer behavior more attention

At the same time, due to Hubei car companies in the production capacity of a huge impact, including Dongfeng Honda, SAIC-GM, Dongfeng Fengshen, Dongfeng Renault, Shenlong Automobile and other car companies will be empty a large number of demand, especially now in the strong stage of the Dongfeng Honda, the gap in its sales is the other Japanese car companies "coveted for a long time! "

So, when evaluating the car market in the post-epidemic era, it's important not only to see changes in volume, but also to take note of the impact of the epidemic on car companies' marketing, market strategies and model launches.

Conjecture 1: Competition in the market will intensify

Since Hubei province will empty about 500,000-600,000 units of production capacity in at least the first four months, the gap is sizable enough for any car company. And with car market sales (estimated) down 5-10 percent, the competition for this 500,000-unit gap will only intensify.

Considering that Wuhan is the location of Dongfeng Honda's production base, Dongfeng Honda alone could potentially give up 800,000 units of production capacity, and Dongfeng Nissan also has a 180,000-unit-a-year production plant in Xiangyang. If Dongfeng Nissan can also through the country's other factories for capacity allocation, Dongfeng Honda in the first quarter at least will let lose almost 200,000 units of production capacity, such a large demand gap to a large extent will let the other Japanese joint venture car companies eat.

This for Toyota's two joint venture car companies will inevitably see as an opportunity to overtake, and Honda will also actively arrange another joint venture car companies - Guangzhou Automobile Honda - to respond more actively. In particular, the CR-V and Toyota's newly launched RAV4 and Veranda are direct rivals, and Guangben, for its part, should increase the launch of the Hao Ying.

In addition, including Dongfeng Honda, SAIC-GM, Shenlong Automobile, Dongfeng Fengshen and other factories are mainly concentrated in the 10-15 million yuan level of coupe products, which is mainly independent brands and joint venture coupe arena, is more heavily armed.

Can be expected, car companies in the market gradually open, will inevitably be in the 10-15 million yuan coupe market to carry out intense "pulling", and CR-V empty market mainly by the rest of the several Japanese joint venture car companies scramble, the probability of Guangben Hao Ying will increase the marketing campaign to seize the Honda base plate customers.

Conjecture 2: car companies and dealers to reach a long-lost balance

In fact, even if the epidemic will delay the car companies to resume work in February, but consumers and dealers do not have to worry about the sales hanging zero, because dealers generally still have about 1 month of inventory, the car companies also have some transit inventory. So the fortuitous appearance of this epidemic may be an opportunity to improve the relationship between car companies and dealers' inventories.

Generally speaking, dealers are the reservoir of sales for car companies, and often have to take over the excess capacity or sales targets of car companies. This to dealers "pressure warehouse" behavior, resulting in dealers in the operation is easy to fall into the "pressure warehouse - not sell - price cuts - brand damage - sell cars - continue to pressure warehouse" negative cycle, and finally lead to the entire car sales link collapse.

Prior to this, although the car companies and dealers are aware of the pressurization behavior can not be sustained, but there is no way to really stop for a month or two to significantly reduce production, because the entire scheduling system and the supply chain system has already been determined, and this is not counting on the loss of market revenue. Therefore, once the sales link to stop is a total loss.

The epidemic happened to stop the entire industrial chain, considering that the car companies resume production later than the dealers to resume business, coupled with logistics delays and other factors, this time gap is sufficient to digest some of the dealers' inventory, so that the relationship between the inventory of the car companies and dealers to return to a reasonable level, realizing the de-stocking. Even more, some car companies will return to the model of production based on sales, which will greatly reduce the operating costs of dealers, allowing dealers to get rid of the pressure of debt operation.

But once back to such a balance of production and sales, it is likely that China's car market sales will also be another step down, the current Chinese car is basically more production than sales, the long years of accumulated down the size of the inventory at the beginning of the year will not be small - for example, in January 2019, the 2.16 million units is the time to sprint sales and press down, the current Chinese car market sales will also be a step down. Directly let a lot of third-tier car companies can no longer get up.

Conjecture 3: online car purchase will not become a trend

In order to cope with the business pressure during this epidemic, both car companies and dealers have opened the "online car", "live car purchase" and other new attempts.

However, from the point of view of automobile consumption, these online purchase modes of car companies and dealers can only be regarded as a contingency move, and can not really promote auto sales to online. The reason for this is that the car is still an "experience" product for most consumers, and the perception of the product still needs to be established through on-site viewing, actual touching, and actual driving. Only through the video broadcast or information answer is not really able to persuade consumers to order, the main role of the online car purchase is still the process of the establishment of the list of pre-selection.

Of course, for car companies, if offline activities can not be carried out, and the effect of online activities is limited, then how to deal with it? We believe that the epidemic delayed part of the consumer's consumer decision-making, but its own demand has not disappeared, the core key is to seize the real high intention of potential customers, through the online contact during this period of time, to strengthen the consumer's knowledge of the product power, and then finally seek to realize the "kick in the teeth".

Of course, the biggest problem for online car buying is the price. Due to the previous dealers to buy cars are always in the "price opacity, a customer a price" state, which makes many consumers can not complete the online booking. But because of the epidemic later in the purchase of cars will have a relatively short period of hesitation, consumer decision-making faster, consumers will be slightly less sensitive to the degree of price, as long as the average price of the market should be able to order. At this time more test of the dealer's pricing strategy, should be used accordingly a price model, and will be packaged into the sale of services, in order to quickly promote the transaction.

Conjecture 4: new car listing process changes

The epidemic affects not only production and sales, but also has a considerable impact on the new car listing. Originally in February and March to prepare for the launch of more than a dozen models now have to postpone their release plan, which before investing a lot of energy in the new car listing arrangements have to be changed - a conference can easily be several million, tens of millions of dollars in costs need to be re-planned, and may even be canceled outright.

In fact, because the new car node is almost fixed, what car in March, what car in April, what car in September ...... are basically already planned throughout the year. Once a certain car on the market plan shifted back, the impact is the delivery of marketing resources, the evaluation of the marketing effect, the cycle of the new car volume and so on.

However, now encountered such difficulties, the node and can not change too much, car companies should plan ahead, adjust the new car listing process. Once the new car listing is mainly "listing, test drive, release" three axes, now is likely to directly into the "cloud evaluation", "cloud release" ", "cloud listing", which will greatly test the car company's public relations communication capabilities, if the communication is not in place, spend a few years of research and development of the new car may be sinking into the sea.

At present, it seems that the online listing, release price is not a big problem, the biggest problem is that the price is released, but the consumer has no impression of the model, no media test drive reports for reference, the attention of the model will drop dramatically.

There are only two ways to solve the problem: First, car companies give up the launch of new models in February, and will be released at the end of March test drive moved to the end of the model, while a more intensive dissemination of information to fight for the dissemination of the frequency and effect, to catch up with the Beijing Auto Show before the completion of the second, for the original release in advance, the listing cycle of the model of the listing of the node of the long further moved back to avoid the peak of the new car released in March, at this stage with official drawings, official videos, and other information, to ensure that the new model will be released. At this stage, official pictures and official videos are used to present the products, with the intermediate process of providing show cars and bookings, and test-driving activities also becoming a post node.

In fact, the new car release of overseas car companies generally follow the second way. Often, the car company first releases all the details of the new car, accepts bookings and offers show cars before finally announcing the start of deliveries in a certain quarter, a cycle that can be as long as nearly a year. That's a risky approach for Chinese car makers, since the domestic market is so competitive that new cars are likely to be quickly forgotten if they aren't available to consumers in time.

Speculation 5: New car pricing may become skimming pricing

To solve the problem of the pace of new car launches, another key point is that car companies need to adjust their pricing strategies.

The current pricing strategy of Chinese automakers is still more of a "brand-to-brand" approach, which means that joint-venture models must be benchmarked against the price of joint-venture products, rather than taking into account the actual perception of the product at the market end. The independent brand is also horizontal to see how the rival brands do, in the high-end products are often reference to the pricing strategy of the joint venture brand.

There is nothing wrong with this strategy in a stable market period, after all, the price will be self-adjusting according to market demand, only the question of how much discount. However, this problem is put into today's very specific: First, after missing this time period in the first quarter, the sales pressure soared, dealers to undertake new car inventory willingness is also not big; Second, the market competition is intensified, rivals will not give the new car more opportunities to develop, and will seize the time to run volume, which is listed on the new car will be more obvious; Third, the new car listing rhythm is disrupted, for new cars, the new car will be more obvious. "Listed on the volume" requirements are also higher, the new car is less of a transfer period, not a hit means that the loss of a large part of the preliminary research and development.

To this end, this year's listing of new cars without the previous "price adjustment cycle", pricing must be one step, there is no way to do a "false move", and then through a significant price reduction strategy to complete the sales climb. This can be called "skimming pricing" - the listing price of the new car must be able to completely impress consumers, and even the price should be far lower than the consumer's expectations, in order to allow dealers to have the willingness to build new car inventory, and quickly become a hit.

In fact, the establishment of skimming pricing is a long-term impact. Skimming pricing is expected to create a transparent pricing mechanism where consumers can make faster consumer decisions and even convert their car purchases to online decisions. In addition, skimming pricing will also allow the pace of new car launches not to be limited to offline marketing, but to be released far in advance, similar to overseas markets, so that consumers can have complete trust in the new car's pricing system and avoid being snatched away by other brands.

Conjecture 6: new car-making forces face a life and death crisis

The impact of the epidemic may be manageable for traditional car companies, and a survey shows that most car companies will be able to support them for a year or so, but for the new car-making forces in 2020, it's a bit of an aggravating circumstance.

As we all know, the new car makers have invested a lot of money in research and development in the early stages, and are relying on a positive feedback from the new cars that will be launched in 2020 to generate revenue. And now a quarter of sales came to a halt, for the new car-making forces this quarter sales basically hung zero, manufacturing and sales operations all stagnant, revenue did not increase, but staff costs and expenses did not decrease.

Following even if there is revenge spending, the first thing consumers need is a car, and most of the new car-making forces are order delivery mode, which in turn greatly delayed the new forces' revenue expectations. Coupled with the fact that most of the products of the new car-making forces are luxury electric SUVs priced at around 300,000 yuan, and this part of the consumer is the group of people whose incomes have fallen the most as a result of the epidemic. In this way, for many of the new car-making forces that rely on financing to sustain the situation will face a broken capital chain.

In addition, the first quarter of the epidemic is also likely to slow down the progress of some of the new car has not yet completed the development of the first quarter of the delay in the process is very difficult to catch up, perhaps new car delivery will be delayed. Such delays will be even more severe for the new car makers, who will face even tougher competition in the market after 2021, when many of the global giants' EVs are due to hit the market.

Written by JackieLXX

Photo: Internet

This article was written by the author of Automobile House, and does not represent the views of Automobile House.