Zhong Guo Qing Nian Bao·2025-05-29 02:12Core Insights - The automotive industry in China is facing a profit margin of only 4.3% in 2024, which is lower than the overall downstream industrial profit margin and the same period in 2023 [2][3] - The "price war" characterized by "involution" competition is squeezing profit margins, diminishing consumer enthusiasm for purchasing vehicles, and destabilizing the industry chain and market environment [2][3] Industry Overview - The automotive market has entered a phase of intense competition, with many companies resorting to price wars as a regular strategy to attract consumers and expand market share [3][4] - A significant number of consumers are adopting a "wait-and-see" approach due to fluctuating prices and ongoing promotional activities, leading to concerns about overpaying for vehicles [3][4] Price War Dynamics - In 2023, Tesla's substantial price cuts on its Model 3 and Model Y triggered a series of price reductions across the entire new energy vehicle sector [3][4] - The average transaction price of domestic new energy vehicles decreased by 0.67 million yuan, a drop of 3.1% compared to 2022, with 227 models experiencing price cuts in 2024, averaging a reduction of 18,000 yuan, representing a year-on-year decline of over 9% [4] Impact on Dealers and Supply Chain - Approximately 84.4% of automotive dealers are facing price inversions, with 60.4% experiencing inversions exceeding 15%, which compresses profit margins and increases operational risks [4][5] - The "involution" trend is also affecting the technology sector, with many companies lacking long-term strategic planning and core technological accumulation, leading to resource waste and overcapacity [5] Long-term Strategies - Industry experts emphasize the need for companies to shift from short-term price competition to long-term strategies focused on quality and innovation [7][9] - Companies like BYD and Chery are demonstrating success through self-developed technologies and open-source strategies, indicating a potential path out of the current "involution" dilemma [7][8] Future Outlook - The industry must abandon short-term strategies of "price for volume" and instead focus on technological advancements and smart development to maintain sustainable growth [9]