“BYD Auto”‘s official Weibo posted on the 1st that it will launch the “Millions of Oceans Gratitude and Gifts” event from November 1 to November 30, launching discounts on five models, among which the Corvette 07 has 2,000 yuan worth 20,000 yuan. Yuan activities, the dolphin and seal championship editions are worth 2,000 yuan to 9,000 yuan, and the Song PLUS championship edition and destroyer 05 championship editions are worth 2,000 yuan to 7,000 yuan.
With BYD (002594-CN) (01211-HK) launching the “first shot of car promotion” in November, the price war in the automobile industry will also continue. At BYD’s 2023 semi-annual performance meeting, Wang Chuanfu once said that BYD will engage in price wars in the next 3-5 years, or in price wars in subdivided areas, and BYD is fully prepared.
Automotive analyst Liu Hao said: “Many popular models were launched or delivered at the end of the year, and car companies rushed to sell at the end of the year. They used promotional methods one after another, and the market competition became more and more fierce. BYD has not yet completed its annual sales target of 3 million vehicles. This time many models The prices of models have been reduced, including the popular models such as Dolphin and Song PLUS Champion Edition.”
“While new energy vehicle companies around the world are engaging in price wars and lowering prices against each other, BYD can maintain its price and technological advantages and let its own technology speak for itself. This is the core reason for its future profits.” Shenzhen Zhong Gong Tao, chairman of Jinhua Chuang Fund, said.
Judging from financial data, BYD has room for price cuts.
In the third quarter of this year, BYD’s revenue was 162.151 billion yuan, an annual increase of 38.49%; net profit was 10.413 billion yuan, an annual increase of 82.16%; gross profit margin was 22.12%, while Tesla’s gross profit margin was 17.9% during the same period.
From January to September this year, BYD’s cumulative sales reached 2.0796 million vehicles, an annual increase of 76.23%, and it completed 69.32% of the annual sales target of 3 million vehicles. To meet the annual KPI, BYD’s average monthly sales in the fourth quarter need to reach 306,800 vehicles, while BYD’s sales in September were 287,500 vehicles, an increase of 4.7% from the previous quarter.
In addition to the price reduction, BYD’s new car Song L officially started pre-sale on October 31. The pre-sale price of 5 models is 220,000-280,000 yuan. The new car will be launched in the fourth quarter. The Formula Leopard 5 will be launched in November with a blind price of 300,000-400,000 yuan.
The performance growth and the confidence to “fight the price war” come from BYD’s increasingly enriched product matrix and accelerated overseas expansion. The hot sales of mid-to-high-end models and the expansion of overseas markets will provide certain support for BYD’s profit margins, giving BYD a better Sufficient “ammunition” for price war.
A research report from Guojin Securities believes that the new cars Song L and Fangbao 5 are expected to bring new growth to BYD after they are launched in the fourth quarter of this year. It is expected that BYD’s cumulative sales volume will exceed 900,000 vehicles in the fourth quarter of this year, and its annual sales will exceed 3 million vehicles.