According to Nikkei Asia, He Zhiqi, BYD's senior vice president, shared on social media that 542 car models were launched in the first 5 months of the year. On average, the market saw 3,6 new models daily, but sometimes the actual number was even higher.
A prime example was 16/7, dubbed "Crazy Thursday", when at least 8 car manufacturers simultaneously introduced new products. This occurred as companies rushed to release inventory into the market to maintain sales.
While China's car exports boomed, the domestic market saw a decline. Total sales decreased by 21%, and new energy vehicle (NEV) sales fell by 13%, partly due to adjustments in tax incentive policies.
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Models from Chinese brands including Nio, BYD, Geely, Haval. *Photo: YD Chinaauto* |
Manufacturers face immense pressure. Zhiqi described the current situation as "brutal". A car company can spend many years and up to one billion yuan (approximately 149 million USD) to develop a vehicle line. However, initial excitement and sales surges "do not last more than three months" due to the continuous influx of new models.
Reports indicate BYD's sales dropped by 16% in the first 6 months of the year. This marks the first time the company has recorded negative growth in the first half of a year after 6 consecutive years. BYD is not an isolated case. Seres Group anticipates reporting a net loss, while Great Wall's net profit for the first half of the year could decrease by about 60%.
The cause partly stems from a strategy of pursuing growth at all costs. However, some brands like Nio are beginning to recognize the changing market landscape as China's automotive industry enters a mature phase.
William Li, CEO of Nio, stated that many households now own at least one car. Therefore, the market needs to shift from a phase of pure production growth to a development strategy based on existing consumer ownership.
This implies sales might be lower but more stable, and the pace of new model launches will slow down. However, given fierce competition, not all carmakers are willing to slow down and risk being left behind.
My Anh
