Source: Zhitong Finance

When the launch of the Xiaomi SU7, the explosion stirred up the industry, and the “internal price roll” once again triggered a series of price cuts. In 2024, the automobile industry was full of “gunpowder flavor.”

Prior to the launch of new Xiaomi cars, the automobile industry had already gone through many rounds of price wars. Traditional car companies, led by BYD (01211), and new car builders led by Wei Xiaoli, fueled heated market competition. Although the industry is thriving, the strong have maintained their competitive advantage, gained greater market share, and also obtained considerable profits. Up to now, all major car companies have released their annual results one after another, so let's take a look at the performance of each company.

On the revenue side, SAIC Motor Group ranked first in the industry with 744.705 billion yuan (domestic), and BYD ranked second in the industry with 602,315 billion yuan. Among new car builders, it successfully broke through and entered the 100 billion revenue club, ranking sixth in the industry with 123.851 billion yuan. In fact, SAIC Motor and GAC's joint venture brands account for a relatively large share. In terms of independent brands, BYD, Geely, and Great Wall have steadily ranked among the top three in the industry in terms of revenue scale.

It is worth mentioning that BYD is the leading new energy brand, with annual sales volume of 3,024,400 vehicles, with a market share of 31.9%. The penetration rate of Geely and Great Wall's new energy vehicles is also increasing at an accelerated pace. Among them, Geely's penetration rate has reached 29%, with a market share of more than 5%. Furthermore, the new car builders are all new energy brands, and each brand has different positioning prices, but they are all introducing multiple models to expand the price range, gradually widening the market share gap.

Looking at bicycle prices, unexpectedly, bicycle prices for most traditional car companies have risen. Among them, bike prices of Dongfeng Group Co., Ltd. have risen by as much as 26.5%, while Geely, Great Wall, and Guangzhou Automobile have all risen to varying degrees. In fact, there are many models of traditional car companies, and they are all pursuing high-end strategies, such as the Zhizhi launched by SAIC Motor, Haobo launched by GAC, and the Extreme Krypton brand launched by Geely. The impact of high-end technology was significant in terms of price cuts, leading to a rise in bicycle prices, while new car builders clearly dropped bike prices under the price war due to the relatively single model.

In 2023, BYD dropped 8.3% in bicycle prices, and sales increased by 63%, leading the market share. Most importantly, with strong industrial chain support, it created the best profit level in the industry, achieving net shareholder profit of 30.41 billion yuan for the whole year, 2.13 times that of SAIC Motor (14.106 billion yuan), which ranked second. Furthermore, the new car builders are basically in a state of loss. Among them, Xiaopeng lost 10.373 billion yuan, with a loss rate of 33.82%. However, the company still has more than 37 billion yuan in cash to burn.

After the annual report, sales data for the first quarter of 2024 have also been released. BYD is still far ahead in terms of new energy vehicle sales and growth rate. With sales volume of 302,500 units in March and 626,300 units in the first quarter; Cyrus became a dark horse in the industry, with sales exceeding ideal next month, with sales volume of 37,500 units and 114,400 units in March and the first quarter, respectively; Xiaopeng's recent situation is worrying, and its model pricing is concentrated on the mainstream battleground of 200,000 to 300,000 yuan, along with major models. Iterative listing, G6 has also been overshadowed. Overall in the first quarter, it lags behind other new ones forces.

Xiaomi will be an “unstable variant” of the industry landscape. On March 28, the Xiaomi SU7 received a fixed order of nearly 90,000 vehicles on the first day of delivery. According to market information, the number of lock orders is over 40%. Currently, the longest lock order production schedule will not be able to pick up cars until 2025, and the popularity has not abated. There are still a large number of people queuing up to enter stores and test drives. According to weekly sales announced by the market, in the first week of delivery, it delivered more than 1,000 vehicles. If its production capacity can be greatly increased, the company's monthly delivery volume will undoubtedly be at the top of the list of new car builders.

The industry's knockout tournament is in the second half, and no one wants to follow in the footsteps of WM and Gaohe, but 2024 is bound to be an extraordinary year. On the one hand, the policy's subsidies for new energy vehicles have declined, and regional subsidies have gradually been withdrawn; on the other hand, intelligent driving has arrived at a battleground dominated by Xiaomi and Huawei. The cost performance ratio and fan effect determine the upper limit of space. In order to gain greater market share, it is already an inevitable trend for other car companies to continue to cut prices.

The leader is Hengqiang, and the capital market gave the answer. As a leader in new energy vehicles, BYD also always dominates the market capitalization. The market capitalization of A-shares and Hong Kong stocks both exceeds 600 billion yuan, which is 2 times higher than SAIC Motor Group's total market value, and higher than the total market value of other (except ideal) peers. The ideal breakthrough from loss to profit was recognized by the market, ranking second in the sector with a market capitalization of HK$258.7 billion, surpassing the total market capitalization of other new car builders combined.

Currently, the NEV market pattern is still unstable, and any car company may become a dark horse. Mainly, the overall penetration rate of NEVs is still less than 50%. There is enough room for incremental growth to allow more brands to share the cake, and there is a possibility that Xiaomi will take the lead later. At the same time, the price war accelerates brand elimination. Brands with weak financial strength and lack product power are expected to be eliminated from the market, and the trend of market share concentration will repeat the smartphone era.