Class B cars are entering the 80,000-yuan price range. Where is the end of the automotive price war?

For most car buyers, mid - size cars (B - class cars) are arguably the most popular choice. They are not as low - end as compact cars (A - class cars) and can meet the vehicle needs of most families, thus becoming the top choice for many when buying a car. Recently, the news that mid - size cars have entered the price range of 80,000 yuan has spread, making people can't help but wonder where the end of the automobile price war lies?

1. Mid - size cars enter the 80,000 - yuan price range?

According to a report from National Business Daily, "Domestic mid - size sedans have reached the 80,000 - yuan price range, which was unimaginable before." Recently, a car salesperson from BYD in Shanghai told a reporter from National Business Daily that the competition in the current niche market has been extremely fierce.

As the salesperson said, the mid - size sedan market is witnessing a new round of "price war".

Recently, the Roewe M7 DMH was launched. With a limited - time price ranging from 85,800 to 102,800 yuan and the size of a mid - to large - size sedan, it has launched an attack on the 100,000 - yuan plug - in hybrid sedan market. In this niche market, competitors such as the BYD Qin L and the Geely Galaxy A7 are also eyeing covetously. The starting prices of these two models in the terminal market are also focused on the 80,000 - yuan price range.

The mid - size car market has a large capacity and high profits. For a long time in the past, it was basically dominated by joint - venture brands.

However, now domestic brands are taking market share from joint - venture mid - size sedans head - on. Especially in the plug - in hybrid niche market, domestic brands such as the BYD Qin L, Geely Galaxy A7, and Chery Fengyun A9L have long occupied the top positions in the sales list of mid - size plug - in hybrid sedans.

Nevertheless, joint - venture brands have also launched plug - in hybrid models in the mid - size sedan market, such as the Honda Accord e:PHEV and the Volkswagen Passat PHEV. In terms of price, joint - venture models are still concentrated in the 200,000 - yuan price range; in terms of monthly sales, the sales of these two models remain in the three - digit range.

According to data from the China Passenger Car Association, in July 2022, the sales volume of mid - size plug - in hybrid sedans was 9,925 units, with monthly sales of less than 10,000 units, accounting for 2% of the new - energy vehicle sales market share of that month. In July this year, the sales volume of mid - size new - energy sedans reached 124,000 units, accounting for 12.6% of the overall market share.

2. Where is the end of the automobile price war?

Now, the once high - end mid - size car market is sinking into the mass - market price range at an unprecedented speed. What exactly is going on?

First, looking back, the mid - size car market used to be the territory of joint - venture brands. In the early days, China's automobile consumption was just starting to rise. Consumers' demand for vehicles mainly focused on family use and showing a certain social status. Mid - size cars, with their moderate body size, relatively spacious interior space, relatively rich configurations, and reliable quality, were exactly in line with family use needs and precisely met the expectations of the middle - class population for means of transportation at that time. At that time, classic models such as the Toyota Camry, Honda Accord, and Volkswagen Magotan almost monopolized the entire mid - size car market. These joint - venture brands built a strong competitive moat relying on advanced technological accumulation, mature production processes, and a perfect after - sales service system. When choosing mid - size cars, consumers often gave priority to products from these well - known brands because they represented quality and trust. Joint - venture brands thus occupied the dominant position in the market for a long time, enjoying high profit margins and a good brand reputation.

Second, however, with the rapid development of China's automobile industry, domestic brands have gradually emerged. In recent years, domestic brands represented by BYD Qin, Geely Galaxy, and Roewe have begun to fully compete for the mid - size car market and achieved remarkable results. The key reason why these domestic brands can achieve a comeback is that they have grasped the market development trend and consumers' pain points.

Among them, the advantages of plug - in hybrid models have become the key for domestic brands to open up the market. In the past, consumers had range - anxiety issues with new - energy vehicles, worrying that the vehicle would run out of power during driving. Plug - in hybrid models combine the advantages of traditional fuel engines and electric drive systems. They can run in pure - electric mode to meet the needs of daily short - distance travel and can also provide long - distance range in fuel mode, completely dispelling consumers' concerns.

More importantly, these models have fully met or even exceeded the standards of traditional mid - size cars in terms of space, wheelbase, and configuration, while the starting price is controlled within 100,000 yuan, and during some promotions, it even drops to the 80,000 - yuan range. This "cross - class competition" strategy enables consumers who originally only had a budget for a compact joint - venture fuel car to enjoy a higher - level driving experience with a similar or even lower price. In addition, brands such as Geely Galaxy and Roewe have also continuously invested in intelligence, Internet of Vehicles, and cockpit design, further enhancing product attractiveness. Domestic brands are no longer just "price killers". Instead, they have redefined the value standard of mid - size cars through technological innovation and product definition capabilities.

Third, for the current automobile market, reducing the price of mid - size cars to the 80,000 - yuan range is not only a marketing strategy actively chosen by domestic brands in the fierce competition but also a long - term strategic layout to seize market share through "trading price for volume" and ultimately achieve brand premium. In the short term, the low - price strategy can quickly attract price - sensitive consumers, expand the user base, and increase brand exposure and market share. Especially in the context of the rapid increase in the penetration rate of new - energy vehicles, whoever can "occupy a position" in the key niche market first is likely to gain the initiative in future competition. Through large - scale sales, car companies can spread fixed costs such as R & D, production, and supply chain, form economies of scale, and thus build a moat in cost control. In the long term, once the market share is stable and brand awareness is improved, car companies will have the opportunity to gradually launch higher - priced and higher - configured models to achieve brand upward breakthrough. Therefore, the 80,000 - yuan mid - size car is not just a "loss - leader" strategy but a well - planned strategic move of "trading the market for time and share".

Fourth, in the long run, although the current price war is still fierce, more and more car companies have realized that relying solely on price competition is not a long - term solution. After rounds of price battles, many car companies have begun to reflect and adjust their strategic directions. They understand that instead of consuming their own strength in meaningless price wars, they should focus on enhancing the core competitiveness of products. Specifically, they should invest their energy in the key areas that consumers care most about, such as the R & D and optimization of plug - in hybrid drive technology and intelligent cockpits. For example, in the field of plug - in hybrid drive, continuously improve battery performance, increase motor efficiency, and perfect the energy recovery system to ensure that the vehicle's energy consumption performance and power output can reach the best state under different working conditions; in the field of intelligent cockpits, strengthen human - machine interaction design, enrich the in - vehicle application ecosystem, and improve the safety and reliability of intelligent assisted driving functions. Only those car companies that can provide high - quality and cost - effective products can stand out in the price war and win the long - term favor of consumers.

This article is from the WeChat official account "Jianghan Vision Observation" and is published by 36Kr with authorization.