Self-owned brand affected by the impact of limited import tariffs cut over 20 car prices

A few days ago, the Ministry of Finance issued the "Announcement of the Customs Tariff Commissioner of the State Council Formally Promulgating the Announcement on Reducing the Import Tariff of Automobiles and Components" (hereinafter referred to as the "Reduction of Automobile Import Tariffs"). The announcement documents that the import tariffs for automobiles have been officially lowered.

The "Reduction of Auto Import Tariffs" bulletin shows that in order to further expand reform and opening up, promote supply-side structural reforms, promote the transformation and upgrading of the automobile industry, and meet the people's consumer demand, starting from July 1, 2018, reducing the number of auto parts and components The import tariff will reduce the tax rate of the 135 tax numbers with 25% of the total automobile tax rate and the 4 tax numbers with the tax rate of 20% to 15%, and the auto parts tax rates will be 8%, 10%, 15%, and 20 respectively. The tax rate of 79% of the total tax rate of 25% will be reduced to 6%.

In response, the relevant person in charge of the Ministry of Finance stated: “The reduction of automobile import tariffs is a major measure for China’s further expansion of reform and opening up. After tax reduction, the average tax rate for auto vehicles in China is 13.8%, and the average tax rate for parts and components is 6%. The actual automobile industry will facilitate the promotion of supply-side structural reforms, promote the structural adjustment and transformation of the auto industry, and guide auto products to improve quality and efficiency, and to enrich the domestic market supply.” Cui Dongshu, Secretary-General of the National Passenger Car Market Information Association, accepts "China Business" reporter said in an interview: "The reduction of auto import tariffs is a policy dividend to promote consumption. In the face of a complex and ever-changing international economic and trade environment, the reduction in tariffs is in line with the actual situation of the rapid development of China's auto market, and it takes the initiative to reduce automobile imports considerably. Tariffs are conducive to expanding imports and promoting the auto industry to achieve high-quality development under more open conditions."

According to common sense, the adjustment of related policies will affect the general development and direction of the market to a certain extent. So, who will be the biggest beneficiary after this import tariff cut? How do dealers face the tide of price adjustment brought about by this tariff reduction? What will happen to the auto market? These are subjects worthy of study.

Downhill triggers official landing

The paper’s red-headed papers of the Ministry of Finance alerted the entire automobile circle in China. Although the “Reduce Automobile Import Duties” notice showed that the time for the official implementation of the import tariff reduction on cars started from July 1, 2018, it is clear that various car companies have already can not wait anymore. In addition to the turmoil caused by the domestic auto market, the most directly affected foreign brand auto companies have come to the first timetable and responded by saying that the research policy will initiate price assessment and thus adjust prices. Although some car companies have not announced a clear price adjustment plan, they have already stated that they will adjust prices.

It is worth mentioning that this is the first time that the price adjustment program is not a traditional car company, but is now the focus of attention of new energy vehicle manufacturers - Tesla. The "Reduction of Auto Import Tariffs" announcement lasted for less than three hours. Tesla released a complete price reduction strategy and it has been transmitted to various sales outlets across the country. “On the one hand, it is to increase sales; on the other hand, if Tesla actively adjusts its countermeasures, it is also an expression of its emphasis on the Chinese market. It hopes to deepen its market presence in China.” The division said.

There have been industry analysts, this time, the biggest impact of auto import tariff cuts than the luxury car market. Until recently, luxury car manufacturers such as Mercedes-Benz, BMW, Audi, Lincoln, Lexus, Jaguar Land Rover China, Alfa Romeo, Infiniti have made clear price adjustments to imported models.

The first camp of the luxury car Germany's top three Audi, Mercedes-Benz and BMW have clearly announced the price adjustment program. The responsible person of BMW China stated that “For BMW’s decision to lower import tariffs, BMW welcomes it and believes that this move has released a very strong signal that China will continue to open up. This policy will also benefit consumers. And help to further enhance the vitality of the market." BMW's import price adjustments in the range of 16,000 yuan to 162,000 yuan adjustment; and Mercedes-Benz related imported models to adjust the price range of 0.72 million to 256,000 yuan; Audi Only the price cuts of some imported models were announced, and the Audi A8L and Audi Q7 were adjusted between 48,800 and 850,000 yuan.

Relatively speaking, the price reduction in the second camp of luxury cars is even greater. In the wave of official downswing, the price cuts of Jaguar Land Rover-related imported models ranged from 0.48 million yuan to 292,800 yuan, of which the Land Rover Range Rover Sport SVR decreased by as much as 392,800 yuan, which is the highest at present. Lexus, which has not been domesticated, was considered by the industry as the biggest winner in the reduction of the import tariff on automobiles. "The price adjustment includes Lexus's full lineup of vehicles being sold. The price adjustment ranged from 14,000 yuan to 10.9 yuan." Lexus Public Relations explained and quoted Toyota's official remarks. "The reduction of automobile import tariffs is a double-edged sword. Swords can enable consumers to obtain products at lower prices and increase sales; but in the long run, if they do not increase the competitiveness of their own automotive products, they will ultimately fail.

In addition to luxury car brands, other foreign brands involved in the imported car business also carried out price adjustments. The reporter learned from Ford Motor Company that it will adjust the price of all models of imported cars that are sold in China, and the price reduction ranged from 15,000 yuan to 35,000 yuan. "The price that Ford Motor has responded to the Chinese government's downward adjustment of import vehicle tariffs. Adjustments will help ensure the competitiveness of Ford's imported models," said Ford Motors.

The reporter sorted out and found that as of the end of May, the number of car companies that had announced that they would conduct official price cuts (including their positions but had not made specific price adjustments) had exceeded 20, which also became the largest official price cut in the Chinese auto market in the past decade. wave.

Give birth to a series of good

Judging from the current decline in the prices of various car companies, some car manufacturers' individual import models have cut prices by as much as 10%, which is beyond the expectation of industry insiders. For example, the Volvo XC90's price reduction space is in the range of RMB 51,200 to RMB 102,000. If the price is calculated according to the highest reduction, the price reduction will be as high as 11.5%. The Jeep Grand Cherokee will be reduced by about RMB 50,000 to RMB 65,000. The price cuts also approached 10%.

In this regard, Jia Xinguang, a well-known analyst in the automotive industry, said: “This time Guandi has different meanings for different automotive companies. For large-scale car companies, increasing the rate of official reduction can solve inventory problems without causing The market and consumers questioned their competitiveness. For car companies that already have a market-competitive model, there is no need to substantially adjust prices, just respond to the government's cut-off policy; for the relatively low influence in the market, the market For car companies with a relatively small market share, they can use the wave of downswings brought about by this shutdown, revisit the market to increase their exposure, and lay out a market for occupying market share. ”

That was the question. Who is the biggest beneficiary of this car import tariff cut? Judging from the development of the automobile market, the reduction in the import tariff of each automobile will stimulate the growth of imported vehicle sales. Public data shows that in 2001, the number of imported cars in China was about 70,000. By the end of 2017, the number of imported cars in China had exceeded 1,216,000, a year-on-year increase of 16.8%. It is understood that in this nearly 30 years, China has carried out about six times the tariff reduction of imported cars, the number of imported cars in China is also growing.

Therefore, most people in the industry believe that the reduction in tariffs on imported automobiles during this period is a clear positive for the development of the domestic imported automobile market, and in particular, it can promote the development speed of imported high-end luxury cars, because the import tariffs on cars are reduced. Can directly reduce the cost of imported high-end luxury models.

For imported luxury cars, the current is in the initial stage of rapid growth. At this time, the reduction of import vehicle tariffs can promote the growth of imported luxury cars, increase potential customers, and gain more market share. In addition, it is worth noting that this time not only is the reduction of import tariffs on complete vehicles, but also the reduction of import tariffs on spare parts. As we all know, the maintenance fees for imported luxury cars are expensive, which has also become one of the main reasons why many consumers are discouraged. Therefore, Cui Dongshu believes that the reduction of import tariffs on spare parts can improve the expensive repair and maintenance fees for imported luxury cars, thereby improving consumer buying psychology.

In addition, the reduction of tariffs on imported cars in the industry is believed to have, to a certain extent, forced the upgrading of the domestic auto market, which can increase the competitiveness of imported vehicles in the market. On the other hand, from the perspective of the market, the tariff reduction of imported vehicles is certain. To a certain extent, it can stimulate the upward development of independent brands, thereby increasing the core technical strength and forming effective competitiveness. Finally, it can also enable the domestic auto market to form a healthy competition and help foster market mechanisms.

Middle and high-end self-impact

The "boots" for the reduction of imported vehicle tariffs landed on the ground. Many people think that the domino effect of the domestic auto market will be set. However, many people in the industry have different opinions. The auto analyst of China Merchants Securities stated that "the tariffs on imported cars have been lowered better than expected. Before the industry predicted that the tariff reduction for imported cars would be 10% to 15%, this time it dropped to 15% is within the acceptable range, and the impact on the domestic auto market is limited."

The most direct impact of the tariff reduction on imported cars was the import of luxury cars, but this segmented vehicle segment accounted for less than 10% of the domestic automobile market. "Even if the competitiveness of imported luxury cars has increased, it is still a small branch. Branches cannot shake the roots of trees," said the above-mentioned Zuozian analyst.

In addition, the reporter visited and inquired about 4S shops of several luxury cars in Beijing, Tianjin, and found that the current sales price of imported luxury models was lower than the official guide price. Therefore, the above-mentioned Zuozuo analyst said frankly, “Can dealers follow Subsequent adjustments to price sales are still unknown, so it is unrealistic for consumers to buy cheaper vehicles now.” The head of BMW China also stated that “will not participate in the dealer’s sales, it all depends on the dealer Independent management decisions."

Talking about the impact of tariff reductions on imported autos on self-owned brands, Jia Xinguang frankly stated: “Regardless of the extent of tariff cuts, it will not have too much impact on the development of self-owned brands. At the level of tariff reduction, independent brands Still have some initiative."

Of course, there are certain positive effects on the development of independent brands. At present, the domestic automobile market has entered a phase of full liberalization. The import tariff reduction on imported vehicles promotes the development of imported models, as well as the large number of foreign brands entering China and the multi-faceted distribution in China, which can stimulate the further promotion of independent brands in the research and development field.

In fact, the cut in tariffs on imported cars will be borne by high-end brands of joint venture brands. With the fall of the imported models, joint venture brands can not avoid a price war in order to protect the market, but the impact of this price war is indeed not optimistic.

In addition, the reduction of import tariffs will also affect the high-end brands of their own brands. In the view of Cao He, chairman of Zhongrong Venture Capital Management (Beijing) Co., Ltd., “The reduction of import vehicle tariffs will mainly impact the emerging mid-to-high-end self-owned brands.” He further explained that “because of joint venture brands We can coordinate the local production and import, so the impact will not be great. On the other hand, with the reduction of tariffs on imported cars, the localization of some foreign luxury cars may slow down."

In addition to people in the industry, the attitude of self-owned brands for the reduction of tariffs on imported cars is also quite calm. The relevant person in charge of Geely Automobile (00175.HK) stated that “this time the impact of the tariff reduction on imported cars will be limited to the independent brands and can be ignored. Geely Automobile welcomes this wave of officials.” Related leaders of SAIC Roewe are It is believed that although the tariff reduction on imported cars is a challenge for self-owned brands, with the improvement of self-owned brand technology, it is confident that they can compete with joint venture brands. From the perspective of economic prices, consumers will tend to own brands.

However, Cao He also said that “for independent brands, the tariff reduction of imported vehicles still has a great warning effect. With the further opening of the Chinese auto market, the competitive pressure of self-owned brands will increase, and this wave will drop. Can stimulate the planning and layout of independent brands."