The price of Leopard 5 dropped by 50,000 yuan on the spot. What is the big move of Fang Cheng Leopard?

Recently, there have been more and more criticisms about price wars in the automotive industry. Low prices disrupt order, low prices lead to cutting corners, low prices lead to vicious competition, etc. All kinds of arguments, explicitly or implicitly, are directed at the industry leader BYD.

Did BYD listen to the advice? No!

On July 29, BYD officially announced that the price of all models would be reduced by 50,000 yuan, and the adjusted price would be 239,800-302,800 yuan. It is obvious that BYD has not been affected by public opinion, at least in terms of the BYD brand.

The starting price is 239,800 yuan. At this price, you may not find many suitable options, let alone buying a hard-core off-road vehicle, even if you buy an ordinary new energy mid-size SUV.

After this adjustment, the Leopard 5 completely broke through the previous price bottom line and directly entered the compact off-road vehicle segment where the Tank 300 is located. It also meant that the high-end image that the Leopard had previously established began to shake.

Why did Leopard 5 make such adjustments? The primary reason is that sales fell short of expectations.

The car was launched in November 2023, and its average monthly sales in the first two months reached more than 5,000 units. It is seen as another hit model of BYD that is expected to sell more than 10,000 units per month. However, since 2024, its sales have begun to decline, with an average monthly sales of just over 3,000 units from January to June.

Last year, the authorities could still attribute the sluggish sales of Leopard 5 to "insufficient production capacity". Now that sales have not been increased, it can only prove that Leopard 5 has not been recognized by users.

Judging from the product performance alone, Leopard 5 has obvious advantages. The Yunnian-P intelligent hydraulic body control system and DMO hybrid platform are both very eye-catching. The problem is that the price is too high, starting at 289,800 yuan. There are too many mature products on the market to choose from.

The sales volume of Leopard 5 has been stagnant for a long time, which may have made BYD realize two problems.

1. It is not easy for BYD's models to attack the market above 300,000 yuan, and even with the support of technology, it may not be effective.
2. The demand for new energy off-road vehicles may not be as high as imagined.

Xiong Tianbo, general manager of Fangcheng Leopard, once revealed that the main users of Leopard 5 are from the northwest region, which is actually the key market for traditional off-road vehicles. New energy off-road vehicles have not really entered thousands of households and it is still a niche model.

In this regard, lowering prices has become BYD's most rational choice.

Consumers are naturally optimistic about it. A new energy medium-sized off-road vehicle priced at more than 200,000 yuan, coupled with BYD's various black technologies, is quite attractive to consumers.

Fang Chengbao has made such a big move that the impact will definitely not be small.

The first is the old car owners who shouted "backstab". At present, many car owners have protested to Fang Cheng Bao. Some car owners even picked up their cars on July 28, and on July 29, they heard that the price was reduced by 50,000 yuan.

So far, Fangcheng Bao has not come up with a compensation plan for old car owners, probably because they think that Leopard 5 sales are not high and the owners' protest will not have much impact, but this will definitely hurt Fangcheng Bao's brand image. A newly bought car with a 50,000 yuan drop in value is too destructive for ordinary consumers.

Backstabbing old car owners is a minus point for any brand, not to mention that BYD does not have the brand appeal of BAB.

In addition, the crazy price reduction of Leopard 5 will inevitably intensify the friction between BYD and other manufacturers such as Great Wall and Chery.

The first to be affected is Great Wall. Its Tank 300 plug-in hybrid version is currently priced at 269,800 yuan. The car is smaller than the Leopard 5 and has no advantages in power and configuration. Apart from following the price cuts, it does not seem to have any good competitive means.

Secondly, there are many manufacturers who want to enter the off-road vehicle market, including Great Wall, Deep Blue, Chery and other brands. The price of Leopard 5 has dropped to 239,800 yuan, which will inevitably squeeze the off-road vehicles of these brands. This operation of Fangcheng Leopard is equivalent to cutting off some of the financial resources of its competitors.

Market competition is inevitable. There is nothing wrong with Fangchengbao drastically reducing prices out of its own interests. But will Fangchengbao really be able to go smoothly after the price cut?

In this regard, Fangchengbao and BYD had better not be too optimistic.

The drastic price reduction of Leopard 5 is because the previous price was too high, but this is the official opinion of BYD Leopard, which may not be the truth. What if it is because BYD’s “black technology” is not attractive?

Having technology but not being able to sell cars is a common phenomenon in the automotive industry. Although both are from BYD, the performance of the Denza N7 is much worse than that of the Tang family; although both are equipped with Huawei components, the performance of the Zhijie and Wenjie is very different.

If BYD has overestimated the attractiveness of its "black technology", then it should start from a technical perspective. Simply lowering prices will not solve the problem.

The main mission of the Fangcheng Bao is to open up new market space for the main brand BYD, but apart from off-road vehicles and sports cars, there are not many niche models that can be developed. The price of Bao 5 is reduced to expand the user scale, but niche models are always niche models, and they never win by scale.

From this perspective, Fang Chengbao's decision to slash prices may be to make way for new products, but it is more likely to be a desperate attempt after failing to achieve success.

If it is the latter, the future of the Fangchengbao brand is not optimistic. In fact, BYD has been struggling with the Denza brand for more than ten years, and currently only relies on the Denza D9 model to support it. It has not formed its own brand recognition and has not really entered the mainstream market. In addition, after a period of popularity, the sales of the Yangwang brand have also begun to return to normal. The sales of U8 last month were 418 units, a month-on-month decrease of 31.25%.

Of course, as a large company with annual sales of more than 3 million vehicles, the success or failure of Fangchengbao will not have much impact on BYD. However, if BYD really wants to become a global manufacturer like Toyota and Volkswagen, it still needs to learn more about the ability to operate multiple brands.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.