First full month of BYD's assault in sub-200k market
Back in February, BYD started its 2024 assault on rest of the market by launching insanely great deals with 79800 RMB Qin+ DM-i and Destroyer 05. At the time, I took a look at the top 10 selling compact sedans from January and noticed all except for Qin+ on there were ICE. It was obvious from that point onward, BYD’s price war would really shake up the market. It certainly has done so. All the Qin+ and Destroyer 05 productions were sold out and BYD has continued to raise production to meet demand since then.
The shift on rest of the market has been quite jaw dropping. It’s pretty obvious why people would prefer Qin+ DM-i over Nissan Sylphy when you just look at their interior
I later tweeted the results of the price war in the top selling compact sedans for March. Qin+ DM-i/EV and Destoyer 05 occupied 3 out of top 5 spots for combined total of close to 70k sales. This number is expected to be even higher in April. At the same time, Sylphy, Lavida, Jetta and Corolla sales numbers have all cratered even after discounting. In the same tweet, I also postulated the upcoming disaster in the medium sized Sedan market when Qin L is promised to bring new level of affordability to B class Sedan. The implications of low cost Qin L on VW Passat, Toyota Camry, Honda Accord & Nissan Altima is quite obvious. The big Q right now is how low can BYD price entry level medium sized sedan.
This level of assault on legacy ICE has completely shifted the market. The most recent reporting from GAC show that both Honda and Toyota are seeing both huge declines in sales, but also production. Especially in the case of Honda, it cut its production by 55.67% in March. That means it had a huge inventory and was heavily discounting to just get enough sales to have more manageable inventory level
Lower production will mean Honda is seeing the writing on the wall here
This graph here just shows the dramatic decline in the fortune of Honda and Nissan in the China market. Yellow is Toyota. Blue is Honda. Purple is Nissan.
The decline in market share is quite obvious (from high of 21.9% in 2020 to just 13.7% so far this year). The bigger decline is that of Nissan and Honda. I do not know how much longer they can stick around in China when dealers are leaving them in droves.
But aside from this, BYD’s affect on other low cost Chinese automakers is also quite clear. Its effect on SAIC Wuling sales can be seen here. Not a lot of room for Wuling to maneuver when BYD is willing to match it in price (almost) while offering a superior product with better brand.
Since last year, two of the largest concerted effort to take market share from BYD in 100-200k RMB NEV market are Geely’s new Galaxy brand and ChangAn’s Deepal brand. L7 and S7 were clearly developed to challenge BYD’s most popular model: Song family. Song managed to keep its strong market share last year. As I recently shown here, Geely and ChangAn have not done better this year even after they added some compelling products at attractive price point. BYD has taken all the oxygen from them. Even when others followed BYD with their own price cuts, they did not get rewarded with more sales.
It will be interesting to see this again when NEV market share goes past 50%.