In the first half of 2023, with Tesla's big global price cut, the price melee in the new energy vehicle industry kicked off, and the performance of car companies came under pressure. Under the prevailing "volume" wind, who can resist the pressure?
On August 30, Cyrus released its interim performance report. According to the financial report, in the first half of 2023, Cyrus achieved an operating income of 11.032 billion yuan; the net profit attributable to the parent in the first half of the year improved by 22.18% year-on-year. From a single quarter perspective, sales of new energy vehicles in the second quarter of Cyrus increased by 24.30% month-on-month.
It can be seen that Cyrus is accelerating the pace of performance restoration. However, the biggest question in the market is whether Cyrus can continue to be a dark horse in 2023, and whether it can perform the script of "overtaking on curves" in the future?
Why doesn't the "dark horse" of the new energy vehicle market change its character?
Since its joint car manufacturing with Huawei, Cyrus has been one of the most concerned brands in the new energy vehicle industry.
Since the landing and rise of the new energy strategy in 2022, Cyrus has continued to show a dark horse posture. On May 27th, AITO Wenjie ushered in a milestone event. In just 15 months, the 100,000th mass-produced vehicle rolled off the production line, becoming the new energy vehicle brand that achieved this goal the fastest.
This once again proves that Huawei's strong technical strength and brand influence and Cyrus' mature intelligent manufacturing capabilities and channel resources can be described as "when the golden wind and the jade dew meet, they will win but there are countless people in the world."
However, the biggest pressure on the new energy vehicle industry at the moment is not sales volume, but a profit "trap" that sells more and loses more.
In the first half of the year, the overall sales volume of the industry was upward. According to the China Association of Automobile Manufacturers, the production and sales of new energy vehicles in the first half of this year were 3.788 million and 3.747 million, an increase of 42.4% and 44.1% year-on-year. In terms of market share, sales of new energy vehicles have accounted for 28.3% of total vehicle sales
However, behind the sales growth is the general reduction in the prices of new energy vehicle products, resulting in a low level of industry profit margins. Several auto companies that are also A-share auto stocks and are also transitioning to new energy vehicles have faced greater operating pressure this year. For example, in the first half of 2023, Great Wall Motor's net profit attributable to the parent company in the first half of 2023 fell by 75.69% year-on-year; BAIC Blue Valley's net profit improved by 9.22% year-on-year but was also in a state of loss; Zotye Auto's loss also slightly expanded year-on-year.
Cyrus is also still losing money, but with the new energy vehicle business, the scale effect has improved its financial situation to a certain extent. In an environment with high pressure to stabilize growth, it is not easy for Cyrus to improve its net profit by 22.18% year-on-year in the first half of the year.
The question is, what enlightenment can the narrowed net loss bring to the new energy vehicle market?
We believe that when the prices of some models were also lowered in the first quarter, the improved financial data of Cyrus proves that under the general trend of changing prices in the market, doing a good job in sales and service is more meaningful than simply lowering prices.
With the arrival of the era of software-defined cars, car sales are being fully "Internetized". Car companies only have price advantages or hardware strengths are far from enough. They must comprehensively restructure channels and sales models, promote new product sales, and strengthen economies of scale to improve profitability.
In the first half of this year, the improvement of the Celes brand is inseparable from the transformation of sales and service channels. We have learned that Cyrus and Huawei have established a joint AITO sales and service working group to further improve the layout of sales and service channels.
It is necessary to do so. New energy vehicles have gradually become the next-generation Internet portal. What they carry is no longer a simple driving function, but also entertainment and life attributes. Celes’ style of play is worth learning from other car companies: with “CARE” as the core concept, it empowers the car terminal network and provides services such as “car butler”. Behind this approach is to treat the car as a consumer electronics product that requires 24 hours of high-quality after-sales service.
At the same time, the combination of Cyrus and Huawei in terms of technology, brand empowerment, and sales services also reveals the importance of open cooperation and win-win cooperation among enterprises in the automotive industry chain for the development of independent brands.
Then, at a time when the price war and promotions in the auto industry continue, and a large number of potential car buyers are waiting to see, can Cyrus break out of the quagmire and show an upward turning point in its performance?
Design and intelligent manufacturing, present and future
In 2023, the prospect of the new energy automobile industry is still promising. On June 20, several ministries and commissions jointly issued the "Announcement on Continuing and Optimizing the Policies for Reduction and Exemption of New Energy Vehicle Purchase Tax", which clarified the detailed implementation rules for the policy of reduction and exemption of purchase tax for new energy vehicles from 2024 to 2027. This marks the continuation of the vehicle purchase tax reduction policy, and the policy still strongly supports the development of the industry.
However, with the end of the industry finalists, most of the new energy vehicle brands have already spent their money to sell products and sell prices. Since August, a new round of "price war" has been waged by car companies, and more than ten brands have cut prices by means of cash discounts or limited-time price rights. In a recent interview with the Securities Daily, some consumers also told reporters, "I'm still waiting and watching. Now that the price of new cars has been reduced so much, it must be more cost-effective to buy a new car."
There is no doubt that the new energy vehicle market is entering a critical inflection point and needs to be injected with new impetus to push it forward. The continuous innovation of car owner experience is the only way to dispel the wait-and-see sentiment of users and promote the growth of the auto market.
In this regard, Celes, which is promoting the sales of new products, let us see some differences.
In June, the AITO Wenjie M5 smart driving version started to be delivered nationwide; subsequently, AITO Wenjie's new M7 with five seats was also exhibited at the Chengdu Auto Show and will be launched on September 12. In the view of Songuo Finance. The former is Celes's exploration of smart driving, while the latter is an attempt to innovate in car space design.
The characteristics of AITO's new M7 with five seats represent the most important route of innovation for car companies - design innovation and safety are the "selling points". Judging from the scene of the auto show, this model hits the user's pursuit of "big space".
Looking at the five-seater models of various brands, the main audience is the family market. The "big space" is of great significance to the elderly and children.
At the same time, this type of car buyers value safety attributes more than price-sensitive ones. Therefore, Celes focuses on the improvement of various safety indicators, such as "it can bear 17 tons per square centimeter, which is equivalent to the weight of a heavy truck."
This is also the biggest breakthrough in the new energy automobile industry compared with traditional car manufacturing: focusing on user needs, and innovative direction with advanced intelligent manufacturing technology and design concepts.
As Dr. Kang Bo, vice president of Sailisi Automobile, said: "When you can't find the answer in the operation, you should let the user tell you." Faced with the pressure of steady growth in the industry, Sailisi The experience in vehicle design has found a relatively "quick effect" path for the current growth.
However, innovation at the design level only reflects a short-term driving force, and the long-term driving force for the development of car companies still depends on technological innovation. Whether it is the AITO Wenjie new M7 large five-seater version or the AITO Wenjie M5 smart driving version, they all show more features that can be discussed.
The above two models are equipped with HUAWEI ADS 2.0 high-end intelligent driving system. Its fusion perception system can accurately identify obstacles in the whitelist and special-shaped obstacles, make precise planning decisions and continue to evolve, and deal with complex problems such as glare, backlight, and ghost probes. Scenes. This means that regardless of high-speed or urban areas, day or night, "man-machine co-driving" is possible.
Therefore, we have collected some market data. From the current point of view, this should be the only mass-produced model available on the market that is infinitely close to the L3 level. This shows that Cyrus has grasped the development trend of new energy vehicles from electrification to intelligence.
Through the two new models, we can see the development ideas of Cyrus, grasping the present through design innovation, and anchoring the future through intelligent manufacturing and intelligent driving.
From the second half of 2023, starting from the second half of 2023, AITO Wenjie M5 smart driving version, the new M7 with five seats, and the new flagship product M9 will closely follow the second half of the car companies' preparations, while not forgetting to speed up the implementation of high-end smart driving.
Right now is the era of autonomous driving, especially the accelerated implementation of urban NOA, and the competition for "smart" among car companies is becoming increasingly fierce.
From a policy point of view, on June 21, the State Council will launch pilot projects for the access and on-road traffic of intelligent connected vehicles, organize and carry out city-level "vehicle-road-cloud integration" demonstration applications, and support L3 and higher-level intelligent driving functions. On July 18, the Ministry of Industry and Information Technology and the National Standardization Management Committee issued the "Guidelines for the Construction of the National Internet of Vehicles Industry Standard System (Intelligent Connected Vehicles) (2023 Edition)", aiming at the general specifications and core technologies of intelligent connected vehicles. With the application of key products, a standard system for intelligent networked vehicles has been built.
The implementation of the policy clarified the broad market prospects. Cyrus chose the highest level of cooperation with Huawei to build cars. From the Hongmeng cockpit that supports smart car control, to high-end intelligent assisted driving, and to intelligent network connection, it has accumulated It has acquired a certain technology and precipitated the minds of users of the "intelligent manufacturing" brand.
Smart driving is also an opportunity for Cyrus to "overtake on curves" in the second half of the new energy vehicle industry.
epilogue
With the release of the interim report, the significantly improved profitability of Celes proves the long-term development potential of the brand, and the launch of AITO Wenjie’s new M7 large five-seater version and other models shows the possibility of a rebound in sales of Celes in the second half of the year .
Only by continuing to increase sales and improve the scale effect can Cyrus pass the inflection point of performance and run more steadily in the second half of the new energy vehicle industry.
Of course, stability is one aspect. How to run faster still depends on whether the technology accumulation in the field of intelligence can bring "butterfly changes" to Cyrus.
After the price and the complete vehicle are rolled up, the hope of the new energy automobile industry to speed up again falls on the smart car. A subversive and innovative smart car product can usher in a real "ipone moment" for the new energy vehicle industry.
Source: Songuo Finance