April is traditionally a slow season for Chinese auto sales, but this April was more "slow," with both year-on-year and month-on-month sales falling. The China Passenger Car Association believes that this is because the ongoing price war has triggered a wait-and-see attitude among consumers.

But car companies don’t seem to listen and are still raising prices. The Zhiji L6, which was launched on May 13, is positioned as a medium-to-large sedan, but is priced at only 219,900 to 345,900 yuan.

So this car, Zhiji What does it mean?

What kind of car is Zhiji L6?

Zhiji L6 is the fourth car of the Zhiji brand and the second mid-to-large sedan. It is entering a very competitive market. If it wants to gain a foothold, it must take some different actions.

First of all, the price. The starting price of this car is 219,900 yuan, while the starting price of Zhiji L7, the first mid-to-large sedan of the Zhiji brand, is as high as 299,900 yuan.

The starting price of 219,900 yuan, in the era of fuel vehicles, could only buy a mid-range version of a Honda Accord, Volkswagen Passat or other models, but now it can buy a mid-to-large sedan.

Moreover, the performance of this car is very strong. With a wheelbase of 2950mm, the car is equipped with a 26.3-inch one-piece large screen, a pure electric range of up to 770km, and a 0-100km acceleration time of only 2.74 seconds. The two high-end models are equipped with quasi-900V high-voltage fast charging, which can increase the range by 400km in 12 minutes.

In terms of intelligence, it is equipped with Qualcomm Snapdragon 8295 chip and provides L2+ level driving assistance functions. It is expected to be "available nationwide" by the end of the year.

In other words, it has all the N-piece sets that are popular in the mainstream new energy market, but the price is constantly falling. What benefits can the rise of domestic cars bring to consumers? This is a typical example.

What is the prospect of Zhiji L6?

From the overall performance point of view, Zhiji L6 performs well and has the strength to enter the mainstream market. So what is the prospect of this car?

In addition, Zhiji L6 also faces huge pressure from competitors. The market for pure electric mid-to-large sedans is very competitive, and many of the same-level models launched by major new energy manufacturers are performance monsters. The recently popular Xiaomi SU7 is an example. The starting price of this car is 215,900 yuan. Its overall performance is comparable to that of Zhiji L6, but it has stronger marketing capabilities, so it is more likely to attract consumers' attention.

In addition, BYD Han EV is also a strong competitor. The starting price of this car is only 179,800 yuan, which has a clear price advantage. Objectively speaking, the overall performance of this car is somewhat different from that of Zhiji L6, but the price advantage plus stronger brand influence can attract more consumers.

This is actually Zhiji The biggest problem of the brand at present is that its brand awareness is relatively low. At the same price, consumers may be more inclined to choose models from brands such as BYD. It is not difficult for Zhiji, which is backed by SAIC Group, to create a high-performance product in a short period of time, but brand building cannot be completed in a short period of time.

Why engage in a price war?

A medium-to-large sedan with powerful performance only costs a little over 200,000 yuan, a price that will directly shock joint venture manufacturers. In fact, it is not just sedans. The medium-to-large SUV Zhiji LS6, which was launched some time ago, has a starting price of only 229,900 yuan. You should know that Zhiji's previous medium-to-large SUV LS7 had a starting price of 289,800 yuan. In other words, the entire Zhiji The brand positioning has been adjusted from RMB 300,000+ to RMB 200,000+.

In fact, Zhiji is not the only company doing this. The continuous decline in pricing has become the mainstream trend in the industry. So, are the profits of new energy vehicle manufacturers really so high that they can afford to keep cutting prices?

This is not the case. So far, in China's new energy market, the only profitable brands may be BYD, Tesla, Ideal and Wenjie, while the rest are basically struggling in the quagmire of losses.

Price war is a helpless choice for most car manufacturers.

So why do manufacturers keep lowering prices? The reason is simple: consumers like it. Price cuts can directly reduce consumers' car purchase costs. Currently, many consumers do not approve of new energy vehicles. If you want to attract them, the best way is to use low prices to increase influence. If the price is lower than consumers' previous psychological expectations, sales will naturally be generated.

At this stage, Chinese new energy manufacturers cannot care about the issue of profitability. They need to first occupy the market and gain recognition from consumers. Only after sales increase will they gradually turn losses into profits. Giants like BYD are exceptions, and losses are the norm in the new energy vehicle market.

In addition, with the rapid popularization of new energy vehicles, the procurement costs of components such as power batteries and lidar are also declining rapidly, expanding the profit margins of manufacturers, which has also contributed to the price reduction trend to a certain extent.

As professional organizations such as the China Passenger Car Association have said, frequent price cuts will not only squeeze manufacturers' profit margins, but will also cause consumers to wait and see. However, no one dares to go against consumers' preferences, and in the price cut trend, not many manufacturers dare to go against the trend.

When will the decline stop?

Since the beginning of last year, the Chinese auto market has experienced several waves of price cuts. If you have not paid attention to the auto market in the past two years and are going to buy a car now, you may have this question: What happened to this car? Why is it so cheap?

In fact, the price cuts in the Chinese auto market are also divided into many situations. Traditional joint ventures cut prices because they are not selling well. Their product performance has not been significantly improved. The price cuts are just to exchange price for volume. From the beginning of 2024 to now, joint ventures have rarely cut prices significantly, because they really have no room for further reduction.

The price reduction of domestic new energy manufacturers is different. Zhiji L6 is a good example. Its product performance has been greatly improved, but the price has been falling.

In fact, this is a normal phenomenon. New energy vehicles are new things, and the price system itself is not stable. In the past few years, this price system has been reshaped. How much should a medium-to-large pure electric car sell for? There is no final conclusion on this issue.

So, when will the price cuts end?

First of all, it should be clear that cars are not clothing, shoes or hats, nor are they computer software. Instead, they are complex industrial products with high costs that are unlikely to be reduced. No matter how much the price of a Mercedes-Benz E-Class is reduced, it is impossible to reduce it to the level of a Volkswagen Lavida. This is basic common sense.

Secondly, as product performance continues to improve, the cost-effectiveness of new energy vehicles will exceed that of fuel vehicles. At this stage, it will make no sense for manufacturers to lower prices. They will begin to pursue profits, and then the prices in the entire new energy market will return to normal.

Improving performance and reducing prices is a common practice among domestic new energy manufacturers, and Zhiji is just one of them. In this process, many manufacturers will be eliminated, but for consumers, this is a benefit. Think about it, are you really willing to accept a Honda CR-V that costs 180,000 yuan but does not have a reversing camera?

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.