"If you really want it, this Volvo XC60 can also be sold at a price of less than 300,000 yuan, but the prerequisite is that you must buy the car through a loan." In a Volvo 4S dealership in Guangzhou, sales consultant Wang Lin told reporters that compared with the previous landing price, the Volvo XC60 can give a total discount of up to 140,000 yuan. In addition to the Volvo XC60, the prices of many models in the store have also dropped significantly. "Now many joint venture cars have reduced their prices, and the prices of cars in our store can also be negotiated." Recently, many joint venture cars on the market have reduced their prices by more than 100,000 yuan, including high-end German and American models. The prices of joint venture compact cars, which were originally priced at 120,000 to 30,000 yuan, have now been reduced to 60,000 to 70,000 yuan after promotion; the transaction price of mid-size cars, which were originally priced at 200,000 yuan, has been reduced to 150,000 yuan or even 130,000 yuan; the terminal prices of "34C" (BMW 3 Series, Audi A4L, Mercedes-Benz C-Class), which were originally priced at more than 300,000 yuan, have dropped to 200,000 yuan, and the starting price of Audi A4L in some stores has dropped to 190,000 yuan. Behind the rare and substantial price cuts by joint venture automakers is the increasing pressure on sales. The latest data released by the China Passenger Car Association shows that in May this year, domestic retail sales of self-owned brands increased by 12% year-on-year to 980,000 vehicles, with a market share of nearly 60% (57.6%), an increase of 7.3 percentage points year-on-year, while joint venture brands only sold 490,000 vehicles in May, a year-on-year decrease of 21%. In sharp contrast to self-owned brands, except for Tesla China, the retail sales of the top ten joint venture automakers have all declined, among which FAW-Volkswagen has the largest year-on-year decline, reaching 17.5%, and SAIC Volkswagen and GAC Toyota have a decline of about 10%. Compared with last month, FAW Toyota fell out of the top ten, and Tesla China took its place. Against the backdrop of an overall decline in the fuel vehicle market, new energy products from leading domestic brands have entered the core market segments of joint venture brands, and joint venture brands that have missed the incremental market for new energy vehicles are facing the pressure of shrinking market segments. This is reflected in the terminal market, where price cuts are everywhere. Entry-level luxury cars drop to less than 200,000 yuan "At the end of May, models including Volvo XC60 and S60 have begun to drop in price significantly. The bare car price of XC60 can be as low as 280,000 yuan, and the bare car price of S60 can be as low as 200,000 yuan." Wang Lin told reporters that since May, these two models have started to reduce prices because of the large number of inventory cars. Compared with the official starting price, the price reduction promotion of this model has exceeded 100,000 yuan. Wang Lin said, "By reducing prices to clear inventory, the new car inventory in the store has been cleared one after another. Now there are still inventory cars of S60 that can be more favorable. We will consider asking the manufacturer for new cars when the inventory cars are almost cleared. Other models will be cleared at the end of May, and the prices are the most favorable at that time. At present, other models except S60 have been planned for the next round of car pick-up, but the number will not be too large. "Similar situations also occurred in Mercedes-Benz and Audi stores. At the Mercedes-Benz 4S store, sales consultant Wu Qing told reporters that the price of Mercedes-Benz A-class and C-class models could drop by 100,000 yuan or more, and the price of E-class could drop by 50,000 yuan. At the scene, reporters saw a post-90s car owner pick up a Mercedes-Benz C 260 L exhibition car displayed in the store. Wu Qing told reporters: "Now joint venture models have been affected, and traditional luxury brands are no exception. But price cuts can indeed bring sales growth, and C-class cars are the most obvious. There is only one car left in stock, and we will pick up several cars in succession. Now it takes two weeks to pick up the car after placing an order. "At Audi stores, the news that the bare car price of Audi A4L has dropped to the 190,000 yuan range has attracted many consumers to come to the store to see the car. Several Audi 4S store sales consultants said that the current bare car price of the entry-level Audi A4L model is less than 200,000 yuan, and the price reduction is close to 100,000 yuan, but consumers must purchase the car through loans. Audi sales staff proposed a loan purchase suggestion to the reporter: "Only by purchasing a car with a 5-year loan can you enjoy the 100,000 yuan subsidy activity. The car payment can be paid off in advance after 2 years of the loan, and there is no handling fee or penalty. There are also discounts for paying off the car payment in one lump sum, but the landing price can only be discounted by 80,000 yuan."Taking the loan plan for the Volvo XC60 as an example, for consumers, under the condition of equal principal and interest payments, a loan of 210,000 yuan will generate an interest of approximately 21,000 yuan over two years. If consumers pay off the car loan after two years, they can save 1,000 yuan compared to paying the full amount at once. However, if the car loan is not paid off after two years, the total amount of the car payment plus interest will exceed the amount paid in a lump sum.

For dealers and banks, a five-year loan car purchase plan can achieve a win-win situation. A person in charge of automobile lending at a certain bank told the reporter that two years is an important milestone. Industry data shows that more than 50% of borrowing customers will not choose to pay off the loan after two years, and the key to the real profit generation of equal principal and interest loan is after two years. "Currently, the five-year loan and two-year pay-off plan provided by dealers has an annualized interest rate of about 5.5%, which is already higher than the current consumer loan interest rate."

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An automobile dealer told the reporter that the main reason for cooperating with banks to purchase cars through loans is that banks can give dealers a rebate, and this money is quite critical for the current profitability of dealers. "It's equivalent to the dealer introducing customers for car loan business to the bank. The car owner signs a loan contract with the bank, and the dealer gets the 'commission' from the bank. There are many inventory cars in the joint venture 4S stores, especially the sales of fuel new cars are slower than before. While dealers sell new cars through price reduction strategies, they also need to make a profit. Currently, the main source of profit for 4S stores is daily maintenance, and another larger source of profit is this new car loan rebate." The person said.

"Whether it's a one-time payment or a five-year loan car purchase, the price of high-end fuel cars has indeed been 'reduced'. Even with such unprecedented discount strength, we are still asked by consumers if there can be more discounts. Consumers will still compare with other brands." Wu Qing told the reporter that he is not very confident in competing with independent brands. Several groups of customers still said they want to go to the stores of independent brands after the test drive, "The new energy vehicles of independent brands have attracted many consumers, and the industry has changed."

"Price for volume" shows short-term results

At present, price reduction has become the main way for joint venture cars to regain market share. In addition to the aforementioned large price reduction of 100,000 yuan for high-end fuel cars, many joint venture car companies such as GAC Toyota, GAC Honda, and Dongfeng Nissan have also launched price reduction strategies, and the price reduction of many popular joint venture models has exceeded 50,000 yuan.

"Many models of GAC Toyota have discounts. The starting price of Camry is in the 130,000 yuan range, and the discounts for Venza and Levin are now 40,000 yuan, and the discount for Sienna is 20,000 yuan. Of course, the final transaction price can also be negotiated." The GAC Toyota sales consultant told the reporter that the starting price of Camry is limited to the entry-level model in the 130,000 yuan range, and the supply needs to be waited for. It is recommended to prioritize the purchase of luxury models, with a starting price of 140,000 yuan.

When the reporter visited the store, he found that the main focus of customers in the GAC Toyota 4S store was on the Camry and Frontier models. Many consumers said that the Frontier, which has broken through 100,000 yuan, is quite attractive. Currently, the starting price of Frontier can be as low as 93,800 yuan. The "price for volume" strategy has brought obvious sales growth to Frontier. In May, Frontier became the only model of GAC Toyota with sales exceeding 10,000, reaching 21,258 vehicles, a year-on-year increase of 46.5%, accounting for about 30% of GAC Toyota's monthly sales. The Passenger Car Association data shows that in May, GAC Toyota's retail sales decreased by 10.2% year-on-year, the decline narrowed, the sales ranking remained in the 7th place, and the market share increased by 0.6%.

Japanese joint venture car companies such as GAC Honda and Dongfeng Nissan have also taken measures to exchange price for volume. As a B-class joint venture sedan, Camry's sales in May were about 8,681 vehicles, but Accord's sales in the same month have exceeded 10,000 vehicles. The reporter learned at the GAC Honda 4S store that the discount for Accord can reach 50,000 yuan, which is greater than Camry's discount. Currently, the Accord on sale is still the 2023 model, with fuel and plug-in hybrid versions, with a starting price in the 130,000 yuan range.

In the Dongfeng Nissan store, "Fuel sales champion, entering 60,000, Sylphy Comfort Edition starts at 69,800 yuan." The huge advertising slogan is hung in the most conspicuous position in the store. The salesperson told the reporter that after the launch of the Glory Edition of BYD Qin Plus DM-i in February, Sylphy has started a price reduction promotion activity. "It is necessary to compete with the Qin series, their starting price can be reduced to 70,000 yuan, and we can be reduced to 60,000 yuan." The Dongfeng Nissan sales consultant said to the reporter. From the sales data, the short-term price reduction strategy has obvious effect on stopping the decline in sales. According to the data released by Nissan China, from January to May this year, Dongfeng Nissan's cumulative sales were 271,000 vehicles, which was the same as the same period last year.Whether discount strategies can achieve long-term sales growth remains a question mark. During the journalist's visit to the stores, several young consumers expressed to the reporter that there are too many choices for cars in the 200,000 yuan price range, especially with the significant price reductions on fuel vehicles. However, they still wish to consider new energy vehicles, one important reason being the level of intelligence. "Compared to new energy vehicles from domestic brands, there is still a noticeable gap in the infotainment systems and intelligent driving of joint venture fuel vehicles," said one consumer.

The China Passenger Car Association's market analysis for May showed that mainstream joint venture brands sold 490,000 units in retail, a year-on-year decrease of 21%, with a month-on-month increase of 8%. The retail share of German brands was 18.6%, down 2 percentage points year-on-year; the retail share of Japanese brands was 14.8%, down 3.2 percentage points year-on-year; the market retail share of American brands reached 6.7%, down 1.4 percentage points year-on-year.

In contrast, domestic brands continued to rise, gaining significant increments in the new energy market and export market. Top traditional car manufacturers have shown excellent performance in transformation and upgrading, with brands like BYD, Chery Automobile, Geely Automobile, and Changan Automobile seeing a noticeable increase in their market share.

"Joint ventures also have intelligence"

Despite the continuous emphasis on the intelligence of joint venture vehicles during sales pitches, what ultimately leaves a deep impression on consumers is still their traditional advantages. "Volvo has a very high safety factor; in a car accident, after rolling over 360 degrees and hitting the guardrail, the owner can still get out of the car and call for help," 90s consumer Lin Nan told the reporter, noting that this example was the most memorable during the hour-long sales introduction.

In Lin Nan's view, Volvo has always focused on safety, and the aforementioned example indeed deepens consumers' impression of the brand's high safety performance. However, such situations are extreme cases, and car purchasing should still focus on daily usage needs.

Similar marketing strategies also appear in other joint venture car dealerships. The sales consultant at Mercedes-Benz emphasized during the introduction of the model, "In terms of car interiors and appearance, Mercedes-Benz has never lost." Terms like comfort, safety, and driving experience frequently appear in the sales pitch for joint venture models, but the selling points and highlights of intelligence are often omitted.

"In fact, the infotainment system of the classic Volvo XC60 is somewhat outdated, and the standard configuration does not have a 360-degree camera. However, domestic brands with a similar price point of nearly 300,000 yuan already come standard with 360-degree cameras, large-screen infotainment systems, and L2-level assisted driving functions," Lin Nan told the reporter, noting that the intelligence of domestic new energy vehicles is more attractive.

With the development of new energy vehicles, catching up with the intelligence of domestic brands has become a product point that joint venture models particularly care about. In March of this year, one of the major selling points of the ninth-generation Camry's launch was the intelligent cockpit specifically designed for the Chinese market. For this reason, the new generation of Camry cooperated with Huawei to develop it, and the demand for advanced intelligence is evident. However, at the same time, domestic brands also value cooperation with Huawei, including GAC Motor, Chery Automobile, BAIC New Energy, and JAC Motors, which have reached cooperation with Huawei.

As the competition in intelligence enters the second half, major joint venture vehicles have also begun to cater to the domestic car consumer market demand, but the proportion implemented in specific sales strategies is not significant. "In the short term, especially compared with domestic new energy vehicles, the intelligent driving and intelligent cockpit of joint venture vehicles cannot impress consumers. It is normal for some young customers to be drawn to domestic brands," said the general manager of a fuel joint venture brand 4S store. The best method for the company at this stage is to "play to strengths," that is, to consolidate the inherent advantages of traditional joint ventures and then supplement with content promoting intelligence to customers.