In recent times, the Chinese fuel car market has once again witnessed a price war, with multiple car manufacturers offering “fixed prices” promotions, with some models seeing price reductions of over 30%.
According to the Economic Observer on March 5th, on February 28th, SAIC-GM Buick once again introduced a “fixed price” promotion for its B-class sedan model, Regal. Buick Regal launched two new models on the 28th, with prices starting as low as 106,900 yuan, a reduction of over 30% compared to the original price. Additionally, SAIC-GM announced that starting this year, all new Buick models will adopt a new energy pricing model, implementing a fixed price policy across the board, along with a test drive subsidy of 14 million yuan.
On March 1st, Cadillac’s new CT5 was released with a starting price of 215,900 yuan, a direct drop of 84,000 yuan as part of the “fixed price” promotion. In order to attract young drivers seeking excitement, Cadillac also introduced a “battle damage recovery gift” for the new CT5, where a vehicle with damage exceeding 30% can be replaced with an equivalent new car for free.
Prior to this, Guangzhou Automobile Toyota launched a “fixed price” promotion on February 5th, with some models seeing price reductions of up to 44,000 yuan; on February 10th, Beijing Hyundai introduced a “fixed price” promotion for several models, with prices reduced by up to 42,000 yuan.
Currently, this “fixed price” price reduction promotion model is becoming a new tactic in the price war for traditional car manufacturers. FAW-Volkswagen, Guangzhou Automobile Toyota, Dongfeng Nissan, Beijing Hyundai, Geely, among others, have models participating in the “fixed price” promotion. Geely even lowered the threshold for A-class sedan prices to the forty thousand yuan level.
The Beijing Daily believes that the “fixed price” strategy not only achieves price transparency but, more importantly, attracts consumers through significant price reductions. “Fixed price” promotions are garnering more consumer favor for fuel cars.
According to the Economic Observer, the “fixed price” policy was proposed by SAIC-GM Buick brand in the third quarter of 2024 and the policy’s coverage of various models continues to expand, including Enclave Plus, ELECTRA E5, Regal, GL8, among others. As a result, SAIC-GM has seen a long-awaited six consecutive months of sales growth and achieved a turnaround from losses to profits in the fourth quarter of last year. However, since the introduction of the “fixed price” model, the controversy in the industry has not abated, with some claiming it is just another form of a price war.
Regarding the industry’s controversy, the Economic Observer believes that for joint venture brands whose market share is constantly under pressure, increasing sales volume is paramount. One must first secure their position at the “table” before having the qualification to change the rules of the game. In 2024, SAIC-GM stabilized its position at the table with the help of the “fixed price” strategy, but that does not mean they can rest easy in 2025. Only by proactively “playing their cards” can they avoid passive following.
The reason for the fuel car’s “fixed price” promotion is due to the continuous squeeze of the fuel car market share by electric vehicles.
Data from the China Automobile Dealers Association’s Passenger Vehicle Branch shows that from July to November last year, the penetration rate of new energy (electric vehicles) passenger cars exceeded the 50% threshold continually, but this trend reversed starting in December. In December, the penetration rate of fuel passenger cars reached 50.6%, and in January of this year, it further increased to 58.5%. In February, the Passenger Vehicle Branch estimated that the market share of fuel passenger cars would still exceed 50%.
However, the Secretary-General of the National Passenger Vehicle Market Information Joint Conference, Cui Dongshu, believes that the decline in penetration rate of new energy vehicles in January does not necessarily indicate that fuel cars have returned to the mainstream market position.
In the face of the onslaught of the fuel car’s “fixed price” strategy, BYD, Chang’an, Dearcc, Xpeng, and other new energy vehicle companies have embarked on a “smart driving sinking” strategy this year, popularizing high-end intelligent driving to more cost-effective models, increasing the incentives to attract consumers.