---
title: "BYD triggered a war"
type: "News"
locale: "zh-HK"
url: "https://longbridge.com/zh-HK/news/207539053.md"
description: "The internal competition is hard to stop"
datetime: "2024-06-28T13:26:53.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/207539053.md)
  - [en](https://longbridge.com/en/news/207539053.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/207539053.md)
---

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# BYD triggered a war

Author: Yu Yan

Editor: Zhou Zhiyu

The tensioned string is about to break.

BYD has been continuously lowering the prices of mass-market models, especially in the 100,000 yuan market segment, aiming to break through the bottom price. In February, BYD first launched the "electric cheaper than oil" campaign with the Honor edition, causing many models in the around 100,000 yuan market to follow suit and reduce prices.

At the end of May, BYD introduced the Qin L and Dolphin 06 starting from 9,980 yuan, comparing the cost-effectiveness of these two models, making other industry competitors pale in comparison, leading to another round of price reductions. BYD, which already dominated sales, was once again dubbed the "king of promotions" by the industry.

Car manufacturers who were forced to lower prices by BYD and had no profit margins were quite dissatisfied and rose up in protest. In forums large and small in June, industry leaders initiated discussions against BYD.

Behind the intense discussions among industry leaders lies the collective anxiety of car manufacturers under the extreme internal competition in the new energy vehicle industry.

With the penetration rate of new energy vehicles now exceeding half, and even traditional fuel vehicles on the verge of becoming "non-mainstream," what was once a blue ocean has turned into a red ocean, accompanied by many competitive chaos.

As new energy vehicles become the representative of new productive forces and gradually go global, they also need to transition from the past few years of rapid growth to standardization, becoming the epitome of Chinese intelligent manufacturing.

For the automotive industry, how to continue growing and where the growth lies is indeed a topic that car manufacturers need to discuss together.

**Anxiety**

In the past month, top executives of car manufacturers have appeared one after another to speak out against the internal competition, marking the beginning of this debate.

At the Chongqing Auto Forum in early June, Changan Chairman Zhu Huarong, GAC Chairman Zeng Qinghong, and Geely Chairman Li Shufu all expressed dissatisfaction with the internal competition in the automotive industry.

Li Shufu bluntly stated that the endless internal competition and the crude price wars result in cutting corners, counterfeiting, non-compliant disorderly competition.

Subsequently, in various public events such as press conferences, the overt and covert opposition to internal competition all pointed fingers at BYD. At a forum in June, Richard Yu, Chairman of Huawei's Intelligent Automotive Solutions BU, publicly referred to BYD as the "king of promotions."

This debate reached its climax with the launch of the new Haval H6 on June 19. During the launch event, Li Ruifeng, CGO of Great Wall Motors, once again indirectly targeted BYD, stating, "Promotions are fine, but they should be healthy, benign, and have a bottom line. This bottom line is to bring long-term value to users. If promotions are blindly pursued and prices fall below costs, even if covered with a technological facade, the commercial essence of low price and low quality will not change."

Behind this is BYD's continuous price adjustments, aiming to maintain its dominance in the mainstream market and dragging other car manufacturers into this price war.

The shadow of the price war at the beginning of the year had not yet dissipated when BYD unveiled its fifth-generation DM technology on May 28. That evening, the new models Qin L DM-i and Dolphin 06 DM-i, equipped with the fifth-generation hybrid technology, were simultaneously launched, pushing the cost-effectiveness of these two models to another extreme In a live broadcast, Li Yunfei, the General Manager of BYD's Public Relations Department, somewhat ostentatiously stated that there are a lot of orders for the Qin L and Dolphin 06, and after much consideration, they have decided not to disclose the sales data temporarily, for fear of causing industry shock.

In reality, the strong offensive of these two models has forced competing models to further reduce prices for sale.

Especially hurting are the joint venture cars. The Toyota Corolla model is offering a limited-time discount of 43,000 yuan, with a starting price of 79,800 yuan after the discount; while the Camry and Highlander, although not direct competitors to the Qin L and priced higher, have all introduced discounts of over 30,000 yuan this month, with the Highlander offering a limited-time discount of around 60,000 yuan.

Zeng Qinghong couldn't sit still either. He "rolled up" and advocated for "equal rights for gasoline and electricity" at the Chongqing Auto Forum. In the first five months of this year, GAC Toyota and GAC Honda saw sales declines of 24.3% and 27.26% respectively.

Rivals surpassed by BYD have long held grudges against BYD. Geely was once the leader in independent brands before being surpassed by BYD in 2022. After BYD released its fifth-generation DM technology, Geely questioned the scientific validity of its test results. As for Great Wall, the sales champion for many years has been the Haval brand, but after BYD's Song family entered the market, Great Wall's leading position in the SUV market is no longer guaranteed.

The industry's "accusations" against BYD mainly point to its "pricing below cost". Under the combination of BYD's vertical integration and economies of scale, its extreme cost control capabilities allow for more flexible pricing control.

In addition, BYD's model updates are also very fast. A source close to BYD Chairman Wang Chuanfu stated that Wang Chuanfu internally requires that every BYD model be updated every six months to maintain market appeal. This speed has also made the industry anxious, as in today's environment, without attention, there may be no sales.

This intensity has also passively swept other car companies along. If they cannot catch up with BYD, they may make less money in the short term, but in the long run, not making money will lead to disappearance.

**Breaking the Roll**

The transformation of new energy has stirred up the automotive market, with everyone hoping to overtake in the curve and re-establish their position.

New entrants have brought new rules to the game, with internet marketing logic entering the automotive circle, expanding the dimensions of rolling to include cost, technology, and marketing. Marketing methods have also been upgraded.

At the end of March this year, after the launch of Xiaomi SU7, it quickly became a new favorite, with Xiaomi Chairman Lei Jun's live broadcasts adding fuel to the fire. For a while, this combination stood out in the automotive circle, prompting car companies to once again focus on generating traffic.

Even car company bosses have entered live broadcasts, either test driving new smart driving cars or evaluating battery life. Zhu Huarong has become one of the "Four Old Men" of the automotive industry's live streaming sales, alongside Li Shufu, Great Wall Motors Chairman Wei Jianjun, and Chery Holdings Chairman Yin Tongyue. Yin Tongyue even openly admitted that he was forced into the live broadcast room by Lei Jun and Richard Yu.

The most realistic situation is that if companies do not join this competition, many of them will disappear as the industry moves towards its final stages UBS China's automotive industry research director Gong Min told Wall Street News that the concentration of the automotive industry will gradually increase, and some marginal car companies will also exit. It is expected that Chinese brands' market share in the Chinese automotive market will increase from 57% in 2023 to 63% this year, and could reach 80% or more by around 2030.

In terms of the number of enterprises, the future will belong to the survivors. He Xiaopeng, Chairman of XPeng Motors, once stated that by 2030, there will be no more than 8 car companies that can survive.

Last year, WM Motor collapsed first, and at the beginning of this year, HiPhi left sadly. Recently, many car companies have also laid off employees and closed factories. From the mass market to the luxury market, lowering prices to embrace sales has been the theme in recent times.

For a long time in the future, the anxiety of this industry's internal competition in the automotive industry will still be difficult to dispel. Last year, BYD became the first Chinese car company to enter the global top ten. To maintain its position, it will also need to make extra efforts.

However, as the industry has developed to this day, what is truly valuable is a common proposition that the entire industry needs to consider.

The current situation in the automotive industry is very similar to the development of Japanese cars several years ago.

Once facing a sluggish consumption environment in Japan, Japanese car manufacturers initially competed on price, but then entered a stage of exploring niche market demands. They developed more cost-effective mini cars and MPVs suitable for family travel, many of which became classics later on. During that period, the diversification of automotive products significantly increased.

In this process, Japanese car manufacturers were the first to promote the lean production model, using a mindset of continuous improvement and scientific methods to control and manage various aspects of car design, development, production, and component procurement, achieving a balance in production costs, reliability, stability, delivery speed, and other aspects.

Chinese new energy vehicles also need to leverage current opportunities for upward development.

Richard Yu also stated that HarmonyOS Smart Travel does not focus on price competition but on creating value, targeting the luxury market. Currently, several models have good sales figures.

In addition, Chinese new energy vehicle companies are also accelerating their overseas layout.

Taking the Southeast Asian market as an example, currently, brands such as Great Wall, Geely, BYD, and Aiways have started selling cars in Southeast Asia. Among them, BYD, NIO, and others are also building factories locally, driving many battery manufacturers to go global together, and the supply chain is becoming more and more mature.

However, in terms of going global, caution is also required. Wei Jianjun and other industry leaders have mentioned that in the aspect of automotive globalization, new energy vehicles must avoid repeating the mistakes of motorcycles in Southeast Asia in the past, to prevent vicious price wars and internal competition. Yin Tongyue also called for Chinese car companies to remain rational, focus on brand image and long-term development, as short-term success does not guarantee long-term success.

This will be a long process. Car companies need to have enough profit to support their advancement while facing industry changes with flexibility. This is a test for any player, but in this process, it is also necessary to find breakthroughs to lead the industry out of disorderly competition; and it requires enough respect for the industry, respect for the law, and holding the bottom line to prevent the collapse of the building

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