In China’s fiercely competitive automotive market, price wars have escalated over the past year, with 227 vehicles experiencing price drops, marking a new high in nearly three years. The overall price reduction for passenger cars reached 8.3%, with new energy vehicles seeing a price drop of 9.2%.
On January 6th, Cui Dongshu, the Secretary-General of the China Passenger Car Association, stated in a post that in 2024 from January to December, the scale of price reductions for 227 models exceeded the total for the full year of 148 models in 2023, significantly surpassing the 95 models with price reductions in 2022. Of these, 88 conventional fuel vehicles, 17 hybrid models, 34 plug-in hybrid models, and 82 pure electric vehicle models saw price reductions.
The price war in the national passenger car market in 2024 continued to intensify. From January to December, the average price reduction for new passenger cars reached 16,000 yuan, with a reduction rate of 8.3%. Specifically, the price reduction for new energy vehicles was 18,000 yuan, with a reduction rate of 9.2%; while fuel vehicles saw a price reduction of 13,000 yuan, with a reduction rate of 6.8%.
Looking at the timing of price reductions, the months of March and April saw particularly strong reductions with 24 models in February, 53 models in March, and 43 models in April experiencing price drops. The number of models with price reductions in these months was remarkably high. In contrast, price reductions in May, June, and October were at lower levels. Furthermore, in December, there was a significant reduction in the price of pure electric vehicles, with new vehicles seeing a price drop of 24,000 yuan, representing a high reduction rate of 10%.
According to a report by Jiemian News on January 6th, BYD was the first to launch the price war in 2024. Within 30 days after the Chinese New Year holiday, they successively released 15 “Honour Edition” models, not only reducing prices by 20,000 to 30,000 yuan but also offering richer configurations.
Cui Dongshu pointed out that manufacturers of new energy vehicles continue to introduce a large number of new cars, leading to a repositioning of new car prices and prompting aggressive price reductions. On the other hand, fuel vehicles are facing an aging trend, lacking opportunities to adjust prices for new cars and enhance product competitiveness, relying solely on promotions to maintain sales.
Cui Dongshu’s analysis suggests that the scale of new car price reductions will continue to increase this year. The current price competition mainly involves new cars breaking through the lower price limits directly upon release, rather than adopting a strategy of adding features without reducing prices.