In the face of rising market demand, in 2016, major auto companies spared no effort to launch their own SUV models. According to statistics, in 2016 about 200 new SUVs or modified models were introduced. As a guarantee of sales volume and profit, the industry expects that more SUV models will enter the market in 2017, and in order to compete for market share and overcapacity, it is likely that the car price cut will start from the SUV model.
SUV has changed from blue ocean to red sea
Under the influence of the economic downturn, the domestic auto market has started the “slow growth†model, while the SUV market has a high growth rate of nearly 50%. Stimulated by such sales, in 2016, major auto companies joined the SUV team to maintain sales and profit growth.
Data show that in the first 11 months of 2016, China's passenger cars sold a total of 21,676,100 vehicles, of which S793 sold a total of 7,738,800 units, an increase of 45.49%. Obviously, the performance of the SUV was quite strong last year, and it can be seen from the products of the major auto companies of the Guangzhou Auto Show that the SUV is still the most promising model for auto companies.
However, some industry insiders said that in the future, the market for small SUVs has limited room for growth, the market competition will become more intense, and the trend of product homogenization competition will become more and more significant. Not only that, but for the car companies that have been cultivating the small SUV market, with the liberalization of the national second-child policy, 2017 will usher in a new market environment.
The "Special Survey and Investment Value Forecast Report for China's Sports Passenger Vehicle SUVs in 2017-2022" released by Yubo Zhiye Market Research Center believes that the favorable policies of China's SUV industry in 2017 will surely have a new impetus to the market. In 2017, the medium and large SUVs of major auto companies will gradually be listed, and the market space will be further expanded.
For the direction of the SUV market in 2017, Ye Shengji, deputy secretary-general of the China Association of Automobile Manufacturers, said that although the SUV will still be the most powerful model in the market in 2017, its sales volume and market share will increase, but the growth rate of SUV in 2017 may be It will slow down.
And car analyst Zhang Zhiyong believes that as the joint venture brand continues to introduce new SUV models and product lines, and a large number of Chinese brand cars enter the low-end SUV market, the original "blue sea" has now become "Red Sea." The SUV market will continue to grow in the future, but will be as competitive as the current car market.
Wei Jianjun, chairman of Great Wall Motor, also said that major auto companies have added SUVs to make the competition in this market segment become more and more intense, and the "price war" will be inevitable.
Luxury brand prices drop sharply
In fact, the price war in the SUV market has always existed. In 2016, this situation seems to be more obvious, and compared with the independent brands, the price of luxury brands is even more impressive.
Luxury brands including BMW, Audi, Lexus and Jaguar have all lowered their prices to maintain their competitive advantage. Some brands have even reached a few hundred thousand yuan. This aspect shows that the high growth of China's SUV market has attracted these international brands to put more products into the market to take advantage of the competition. On the other hand, it also shows that the current SUV market is still the buyer's market, and the competitive pressure is also increasing.
According to reports, as of December 2016, there are 72 domestic SUV model manufacturers, and SAIC-GM, Changan Automobile and Great Wall Motor have successively entered the annual sales of one million units. As the production capacity of SUV continues to increase, the market price will further dip.
According to data from the Association, SUV accounted for 21% of all car sales in 2014, 29% in 2015 and 40% in 2016. It is expected that the market share of SUV will further expand in 2017, and more new models will be put on the market one after another, which will cause a new round of impact on the market. This continuous price war will further drive down the price of the car.
The industry believes that whether it is independent car companies or joint venture car companies, even including imported car brands, are constantly expanding the market share of SUV models. The independent brand maintained its previous development trend and continuously expanded its production capacity. At the same time, the joint venture brand is gradually exerting its strength in the SUV market this year, and product prices are further explored. In 2017, this kind of market game may trigger a chain reaction, resulting in mutual bidding.
Market support weakened
The industry believes that due to the accumulation of SUV capacity, high prices, and more profitable competition, SUV models are likely to take the lead in price reduction.
Analysis of the high growth factor of the SUV market in 2016, on the one hand, is due to the upgrade of customer demand, the most direct performance is the expansion of consumer demand for personalized products; on the other hand, the support from the policy.
The 1.6-liter displacement below the passenger car purchase tax halved policy has greatly boosted the market, and also boosted the SUV market, especially the growth of the independent SUV model market. However, with the purchase tax halved in 2017, the boosting power is affected. It is expected that there will be no high growth rate in this year's SUV market. In the face of the slowdown in market growth, market competition will intensify and the intensity of price wars will certainly increase.
In addition, the further exploration of the market positioning of joint ventures and imported brands, as well as the increasing investment in products, will also intensify competition in the SUV market this year. Some experts said that in the past two years, the joint venture brand has completed the layout in the middle and high-end market. At the same time, the market share and more demand from customers will lead to the joint venture brand products gradually approaching the range of independent brand customers, which will intensify the pressure of price competition with independent brands.
Wei Wenbo, director of the Ryukyu Automobile Testing Center, believes that while the self-owned brands are moving up and the joint venture brands are being explored, the luxury brands have also continued to explore and expand their market territory. The Chinese SUV market has officially entered the stage of short-handed and close-knit battles. Therefore, the SUV market is likely to become the “hardest hit†of price wars, and the price trend of self-owned brand SUVs will become particularly sensitive, especially in the small and compact SUV market. It is foreseeable that the price changes of self-owned brand SUVs will dominate the changes in the overall market price in 2017, and this price stifling has been difficult to avoid.
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