On October 13th, Dongfeng LanTu's all-new pure electric SUV, the Zhiyin, was launched. This follows the likes of the Ledao L60, JiKrypton 7X, Zhijie R7, Avita 07, and the all-new Zhiji LS6, adding another model to the list targeting the Tesla Model Y.

"Golden September and Silver October" is the season when automakers launch a dense array of new products in the fall, and it is also the traditional peak season for automobile consumption. Data indicates that although automobile production and sales in China experienced a year-on-year decline in September, they achieved double-digit growth on a month-to-month basis. Particularly, the production and sales of passenger cars, which had been on a five-month downward trend, ended with a new highlight for the "Golden September and Silver October" period.

Passenger car production and sales are gradually picking up.

"On the last day of the National Day holiday, Zero Run's sales once again reached a new high, with over 17,000 firm orders placed during the 7-day holiday," Zhu Jiangming, founder, chairman, and CEO of Zero Run Automobile, shared his National Day promotion report card on WeChat Moments on the evening of October 7th.

In addition to Zero Run Automobile, several other automakers also saw their orders reach new highs during the National Day Golden Week. Hongmeng Zhixing's firm orders exceeded 28,600 units, Xiaopeng Motors reached 16,000 units, Shenlan Automobile hit 14,000 units, and JiKrypton added over 10,000 firm orders. Fan Junyi, the general manager of Geely Automobile Sales Company, told reporters: "During the National Day Golden Week, the overall sales volume of the Geely brand significantly increased, with fuel vehicles growing by 29% compared to last year, and new energy vehicles, driven by the Galaxy E5 and Star Wish, saw an even greater increase."

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Data shows that in September, China's automobile production and sales completed 2.796 million and 2.809 million units, respectively, down 1.9% and 1.7% year-on-year, but up 12.2% and 14.5% month-on-month. Among them, the production and sales of passenger cars, mainly for private household use, were 2.502 million and 2.525 million units, respectively, up 12.6% and 15.8% month-on-month, and up 0.2% and 1.5% year-on-year, ending the five-month continuous decline.

"As the national level of automobile scrapping and renewal subsidies strengthens, local replacement and renewal policies take effect one after another, and automakers continue to launch new products for the fall, the passenger car market is gradually warming up, especially with the terminal retail market continuing to strengthen, and the 'Golden September' effect continues to be evident," said Chen Shihua, the deputy secretary-general of the China Association of Automobile Manufacturers.

To expand automobile consumption, in March of this year, the Ministry of Commerce and 14 other departments jointly issued the "Action Plan for Promoting the Exchange of Used Consumer Goods for New Ones," followed by the "Implementation Details of the Automobile Exchange for New Subsidy." In August, the "Notice on Further Doing a Good Job in Automobile Exchange for New" was issued, raising the subsidy standards for individual consumers who scrap and renew from a subsidy of 10,000 yuan for purchasing new energy passenger cars and 7,000 yuan for purchasing fuel passenger cars to 20,000 yuan and 15,000 yuan, respectively. On this basis, various regions have accelerated the introduction of relevant policies according to local conditions and increased efforts to promote the exchange of used cars for new ones. As of 24:00 on October 7th, the Ministry of Commerce's automobile exchange for new platform has received over 1.27 million subsidy applications, driving the national new car sales to exceed 160 billion yuan.

To seize the window period of the exchange for new policy, automakers, on the one hand, are accelerating the launch of new cars to meet the diverse and personalized needs of different consumers. In September alone, more than 50 new models or modified models, such as the Passat Pro, Shenlan L07, Aion RT, and Dongfeng Honda Lingxi L, were launched. On the other hand, they continue to expand discounts and benefits to attract consumers. For example, purchasing a NIO car currently not only entitles one to a 20,000 yuan optional equipment subsidy but also to an electricity subsidy voucher.

"As the car market enters the 'Silver October' cycle, automakers and dealers also enter the annual sprint phase, and increasing the discount strength is undoubtedly the most direct way to boost sales volume," said Yan Jinghui, a member of the Expert Committee of the China Automobile Circulation Association.The Divergent Paths of New Energy and Fuel Vehicles Intensify

As the production and sales of passenger cars gradually recover, the divergence between new energy vehicles (NEVs) and fuel vehicles is also intensifying.

From the perspective of new car manufacturers, in September, Li Auto topped the sales chart with 53,700 units, a year-on-year increase of 48.9%; Huawei's HarmonyOS Intelligent Driving series delivered 39,900 units in a single month, with the Aito series becoming the mainstay of brand sales; Zero Run Auto delivered 33,700 units, setting a new monthly delivery record; Xiaopeng Auto, with the MONA M03, achieved its best performance in nearly two years, with monthly sales exceeding 20,000 units again; Xiaomi Auto's delivery volume in September also exceeded 10,000 units.

Looking at traditional car companies, the faster and more resolute the transition to new energy, the more significant the increase in product sales. In September, BYD Auto's sales volume broke through the 400,000 mark, reaching 419,000 units, setting a new record for a single brand's monthly sales in the Chinese car market; Geely Holding also achieved a historical high with a monthly sales volume of 308,000 units, a year-on-year increase of 17.8%. Among them, the sales volume of new energy vehicles was 152,500 units, a year-on-year increase of 59.6%, with a new energy penetration rate of 49.5%.

In contrast, joint venture car companies that are relatively slow to transform and still mainly produce fuel vehicles continue to see varying degrees of decline in sales. Data shows that in September, FAW-Volkswagen's sales volume was 148,000 units, a year-on-year decrease of 18.2%; the sales of GAC Toyota and SAIC General Motors are even more worrying, with the former at 72,000 units, a decrease of 21.8%, and the latter only selling 22,000 units.

Data shows that in September, China's new energy vehicle production and sales were completed at 1.307 million and 1.287 million units, respectively, with year-on-year increases of 48.8% and 42.3%, respectively. The sales volume of new energy vehicles accounted for 45.8% of the total sales volume of new vehicles, setting a new historical record for monthly production and sales; the domestic sales volume of traditional fuel passenger cars was 940,000 units, a year-on-year decrease of 30%. This indicates that under the wave of electrification and intelligence, the Chinese car market is undergoing a profound structural change, and the divergence between new energy and fuel vehicles is intensifying. It can be said that new energy vehicles have become the main force driving the growth of domestic car sales at present.

The strong growth in new energy vehicle sales is due to, on the one hand, the increasing richness of product supply. For example, in September, new energy vehicles accounted for more than 80% of the newly listed vehicles, providing consumers with more choices; on the other hand, it is due to the effective improvement of product strength, especially plug-in hybrids, including extended-range hybrid power, which have a strong substitutability for traditional fuel vehicles. "Plug-in hybrids have achieved a comprehensive surpassing of traditional fuel vehicles in terms of energy consumption, power, reliability, intelligence, usage costs, and selling prices," said Ouyang Ming, an academician of the Chinese Academy of Sciences and a professor at Tsinghua University.

"At present, the policy environment for new energy vehicle consumption is still much better than that for traditional fuel vehicles. In terms of trading in old vehicles for new ones, the subsidies for new energy vehicles are much higher than those for traditional fuel vehicles, which is also an important factor in promoting the continuous growth of new energy vehicle production and sales," Chen Shihua estimated that China's new energy vehicle sales this year are expected to reach 12 million units, far higher than the expectations at the beginning of the year.

Intensified competition is forcing high-quality development.

"The limited offer price for the long-range smart enjoyment model is 179,900 yuan." On October 13, when Shao Mingfeng, the general manager of Lan Tu Automobile Sales Service Co., Ltd., announced the price of Lan Tu Zhiyin, the audience exclaimed, "Finally, there is a company that has rolled the price of a medium-sized pure electric SUV to below 200,000 yuan!"Although the production and sales of passenger cars are stabilizing and warming up, the price war that erupted in the car market since the beginning of last year has not shown any signs of easing. Data from the National Bureau of Statistics shows that in September, the prices of new energy passenger cars and fuel-powered passenger cars in China fell by 6.9% and 6.1%, respectively. Cui Dongshu, Secretary-General of the Passenger Car Association of China Automobile Circulation Association, said that in the first nine months of this year, there have been 195 car models with price reductions in China's passenger car market, exceeding the 150 models in 2023 and significantly surpassing the 95 models in 2022.

Price competition is the most commonly used competitive means among enterprises under market economy. Based on changes in market demand, enterprises can expand their market share through price reductions, forcing weak brands and inefficient production capacities to exit, and achieving the survival of the fittest in the industry. However, price wars are a double-edged sword. Once a "self-consumption" vicious competition is formed, it will not only affect the reasonable profits of enterprises but also squeeze upstream and downstream suppliers, damaging the industrial ecosystem.

The continuous price war this year has further intensified market turmoil, and car dealers have fallen into an unprecedented predicament. "In the profit structure of dealers, the loss from new car sales is severe, the gross profit contribution of new cars is negative, and the loss continues to expand," said Shen Jinjun, President of China Automobile Circulation Association. Car companies should produce according to sales and should not blindly produce in pursuit of market share and engage in price wars.

Li Shufu, Chairman of Geely Holding Group, called for car companies to drive innovation and accelerate the formation of new quality production forces to provide high-quality products and services and create new value for customers. Only in this way can they avoid the trap of price wars, avoid "self-consumption" vicious competition, and truly promote high-quality development of the industry.