On the evening of July 29, BYD’s sub-brand, the F3 Panther Automobile, announced a price reduction for the Panther 5 model, with a significant decrease of up to 50,000 yuan across the entire lineup. Some analysts believe that Panther Automobile is following BYD’s usual price reduction pattern to boost sales volume.
According to the news from “First Financial” on July 29, Panther Automobile announced that the starting price of the Panther 5 model has been reduced to 239,800 yuan, with a total reduction of up to 50,000 yuan. Currently, the Panther 5 is the only model available for sale under the Panther Automobile brand.
The news of the price reduction for the Panther 5 had been circulating in the industry since early July, with sales personnel at 4S dealerships indicating that a significant price reduction promotion would be launched by the end of July. The reason for the price reduction is that the sales volume of the Panther 5 in the first half of the year was mediocre.
Official data shows that in the first half of this year, Panther Automobile achieved sales of 18,000 vehicles solely with the Panther 5 model, averaging 3,000 vehicles per month.
Reports suggest that the price segments of various car models in the current automotive market are trending downward, with more products shifting from the 300,000 yuan range to the 200,000 yuan range. Therefore, considering its own situation and the overall market conditions, Panther Automobile has adjusted its prices downward.
In response, Li Yanwei, an expert from the China Automobile Dealers Association, stated: “Currently, Panther Automobile’s overall sales volume is not large, and its product prices are high. Consequently, there are very few cities in the consumer market with the capacity to purchase Panther products. Without high-sales products, the investment risk for dealers to open stores will be relatively high.”
Car Connectivity China stated on July 30 that BYD’s move “essentially uses price advantages to offset the product advantages of Panther Automobile.”
Car Connectivity China expects that after the price reduction of the Panther 5, the focus will be on the core range of vehicles priced between 200,000 and 300,000 yuan, aligning with Panther Automobile’s current channel expansion strategy, which may lead to a rapid increase in sales volume.
Car Connectivity China believes that BYD’s decision has posed a dilemma for its competitors: following the price reduction may lead to no profit and eventual exhaustion, while not following it may result in insufficient sales volume and struggle.
To seize market share, mainland Chinese automakers have launched a price war this year. According to the China Association of Automobile Manufacturers (CAAM), from early February to the end of April 2024, the number of models participating in price reductions nearly matched the total for the entire year of 2023, with some popular models seeing reductions of nearly 20%.
The intense price war among automakers has led to increasingly narrow profit margins for both car manufacturers and supply chain companies. According to CAAM statistics, in the first five months of 2024, the profit margin of the automotive industry was 5.3%, lower than the average profit margin of 6.1% for industrial enterprises during the same period.
At the 2024 China Automobile Forum held on July 12, Deputy Minister of the Chinese Ministry of Industry and Information Technology, Xin Guobin, acknowledged that the demand for Chinese automobiles is not strong, and competition is exceptionally fierce. Many companies have experienced declining profits or even losses, leading to disorderly competition which in turn has disrupted industry and supply chain stability.