Wuling Zhou Jinkai talks about the wave of car price reductions valid for one month, but not effective in the second month

Wuling Zhou Jinkai discusses car price reductions for one month, but ineffective in the second month

【Phoneauto News】”Price reduction” has become a popular keyword in the automotive industry since the beginning of this year. Recently, many car companies have been reducing the prices of their models, ushering in a new round of price reductions. According to Phoneauto, Zhou Jinkai, the Deputy General Manager of SAIC-GM-Wuling Brand Division, discussed the topic of the automotive price reduction wave on Weibo. He believes that price reductions in the automotive industry are effective for one month, but not in the second month.

Recently, major car companies in the automotive market have started to compete on price. Why are they reducing prices at this time? Zhou Jinkai believes that there are only four possible reasons:

1. . This is the most terrifying situation because dealerships lack funds for turnover, which means they cannot purchase new cars and the cost of borrowing from banks becomes higher. The factories cannot stop production, and banks cannot postpone repayments, so the larger the inventory, the more price reductions;

• Tesla’s new Model 3 may have removed all radar and is expected to be sold for around 200,000 yuan
• Successive accidents Cruise’s self-driving car collides with a fire truck, causing concerns
• The most expensive auctioned car this year? Ferrari 412P sold for about 220 million yuan, only two in the world

2. . This is related to the evaluation criteria of car companies. If a company’s evaluation is based on market share, even if the sales volume remains stable, they will try to reduce prices to grab market share;

3. . In the past, the lifecycle of a car was generally calculated based on five years, but now it is becoming shorter and shorter, some are less than three years, or even two years, becoming old models. Therefore, the pressure to release new cars is increasing, and the timing of price reductions for existing products is determined by the timing of launching new cars. In most cases, prices will be reduced three to five months before the launch of a new car;

4. This usually happens in June or November.

Zhou Jinkai’s Weibo

Finally, Zhou Jinkai stated that there are currently many models with reduced prices, which greatly affects everyone’s purchasing decisions. When the transition from National 5 to National 6 emission standards happened before, everyone reduced prices but found that sales did not improve because everyone reduced prices, which is equivalent to no reduction. He believes that the second half of this year is not optimistic for the automotive market because general consumers trust price stability. After a price reduction, it has an effect for one month, but not in the second month.

We will continue to update Phone&Auto; if you have any questions or suggestions, please contact us!