CONSUMPTION REPLACEMENT INSIGHTS: BYD continues to soar, Li Xiang replaces Audi, BMW and Mercedes in the Chinese automarket!

[XN Motors News] On the 5th-7th of July 2023, the China Automobile Industry Association (CAAM) hosted the "2023 China Automobile Forum" in Shanghai. At the main conference, Long Quan, Secretary of the Party Committee, Chairman and CEO of Autohome China, released the "2023 China Automobile Replacement Consumption Insight" report on the spot.

The report points out that replacement consumption is a new driving force for the growth of the automobile market. Focusing on the "new energy vehicle replacement consumption", we may observe that the stimulation of new energy-related policies has resulted in the improvement of the product power and safety of new energy vehicles, the new energy market is developing rapidly. At the same time, lower consumption costs, more intelligence and better driving experience also make the substitution effect of new energy vehicles on fuel vehicles more and more obvious. 

The data shows that the proportion of fuel vehicle owners replacing new energy vehicles from January to May 2023 has reached 22%, compared with only 4% in 2020, with a nearly five-fold increase in three years.

The new energy models replaced by fuel owners are mainly pure electric vehicles, accounting for more than 60%. With the increasing rationality of consumers buying cars, more and more attention is paid to the economy and comprehensive cost of car use. 

In the future, the proportion of new energy vehicles replacing fuel vehicles will be further increased.

■Chinese branded new energy vehicles getting popular by the minute!

Although the proportion of fuel owners replacing new energy vehicles continues to grow, the proportion of the overall replacement behavior is still not high. 

According to the data, 25% of Chinese brand car owners choose to replace to new energy vehicles; 23% of overseas brand car owners choose to replace to new energy vehicles, and 27% of luxury brand car owners make the same choice.

At the same time, Chinese brands are highly recognized in the field of new energy. Among Chinese brands, overseas mainstream brands and overseas luxury brand owners with the intention to replace; the proportion of users who replace new energy vehicles to Chinese brands is 22%, 17% and 16% respectively, while the proportion of new energy vehicles flowing to overseas mainstream brands and overseas luxury brands is less than 10%. New energy vehicles are a sharp tool for Chinese brands to grab other brand base users. This is also consistent with the trend of the entire new energy vehicle sales market. Chinese brands almost top the new energy sales list, and only Tesla can fight overseas brands.

Therefore, for Chinese brand new energy vehicles, how to stand out in the internal environment and attract users is the key to future development. For new energy vehicles of overseas brands and overseas luxury brands, it is necessary to increase the volume to let old users know that they also have new energy vehicles and give enough sincerity. At present, overseas brands led by Buick have begun to develop at low prices and high-end, striving for the new energy market.

■BYD and Tesla are "suitable for all ages", ideally favored by luxury brand users

Although Chinese brands, overseas brands and luxury brand owners have different preferences when choosing to replace new energy vehicles, BYD and Tesla are obviously "suitable for all ages" and "both men and women", firmly occupying the top two, but with different proportions in different user groups. In other words, most users who replaced new energy vehicles chose BYD and Tesla at the same time. From January to May this year, BYD sold 996,476 new cars, and the replacement users are estimated to have contributed a lot.

Specifically, when Chinese brand users choose to replace fueled cars to new energy vehicles, they preferred BYD, Tesla and Wuling Automobile. Among them, BYD is loved by Chinese brand replacement users with 38.6%. After all, it has a strong product matrix from small to medium-sized, SUV to sedan, 100,000 to 300,000, which can meet the demand for replacement users and new buyers.

Overseas mainstream brand owners are more inclined to choose BYD, Tesla and Aion. Compared with Chinese brand owners, the probability of Tesla being selected has increased to 12%. Tesla's two models are medium-sized cars and SUVs, with prices of about 230,000 to 300,000 yuan. The mid-to-high-end positioning is very in line with the needs of replacement users. In the oversees market, between luxury brand car owners like Tesla, BYD and Li Autos, Li Autos been seen high in demand, and has successfully become the most popular brand among luxury brand replacement users.

At the same time, we also found that users with Chinese branded cars prefer to choose replacement vehicles within Chinese brands, while overseas brands and luxury brand users have increased  the buying of Volkswagen, Toyota, BMW, etc. “ The new energy vehicles of these brands are not as good as Chinese new energy vehicles, but they can also gain the hearts of a number of old car owners with brand power.” , Wei Xiaoli.

■ Which models are more popular with replacement users?

So which models are more popular with replacement users? One may say depends on the sales ranking of each model? However, that’s not necessarily true. According to data, BYD Qin PLUS (price starting at 9.98-209,900 yuan), Song PLUS New Energy (starting at 154,800-21,900 yuan), Han (starting price at 189,800-331,800 yuan), Tang (starting price 209,800-342,800 yuan) are very popular. Both Chinese, overseas and luxury brand users preferred these three over others.

[Han DM-i Champion Edition]

In contrast, Han is more popular with luxury brand users, which is due to the price bracket of its flagship car. In its price of 189,800-331,800 yuan, the main models can meet the entry-level vehicles of most luxury brands, and the same price can be exchanged for larger models and more advanced configurations.

This also reflects the logic of "consumption upgrade" (replacing small cars with big cars, same in terms of technology)." According to the data of the Passenger Association, from January to May this year, the two most sold cars of BYD were Qin and Dolphin. Although one may consider that Qin did not appear to be on the top of the list.

In terms of users replacing their cars with Tesla, majority preference is seen for Model Y and Model 3, while low preference is shown towards Model X and Model S and that may account to its higher price brackets.

[Wuling Hongguang MINIEV]

Hongguang MINIEV, Bingo and Xing Chen are the Wuling models preferred by users with chines brand cars or prefer Chinese branded cars. Data shows that the Wuling brand users prefer internal replacement, such that, most Wuling and Baojun users replace or upgrade their cars with these three models. In addition, Wuling's new energy vehicles do not take the high-end route, but are low-priced cars, thus, can be referred to"micro-cars on the road". 『AION Y』

After BYD and Tesla, data shows that most overseas brand users prefer to choose Aion. The compact SUV AION Y has shown much popularity with accounting to nearly half the sales towards overseas users. This is majorly due to the price bracket Aion is offering. At the price of a Corolla, users can now buy a more fashionable pure electric SUV. And Why not!

Li Autos has strongly become the third choice of users preferring luxury brand vehicles after Tesla and BYD. The prices of the three models currently sold by the Li family in its L series have covered the range of 300,000 to 460,000 yuan, these coincide with its luxury brand market. In addition, its emphasize on adding more luxurious specifications such as sofa seats, refrigerator and vibrantly colored LCD’s has only made the brand more compelling. Among them, L8, as a 6-seater model is in third place, and the price is lower than that of L9, directly hitting the hearts of family users, while becoming the first choice for replacement users.

■ Volkswagen owners said to be the most eager for change!

So now the question arises, which brand’s users did BYD, Tesla and Li Autos take away? According to data, the highest proportion of replacement consumption for the above three models - is by Volkswagen owners.

In addition to Volkswagen, owners of BYD, Honda, Toyota, Buick and other brands have also shown more preference towards changing their vehicles to BYD. It is rather evident that BYD's new energy vehicles have attracted the attention of many overseas and local Chinese brand users. Although this may also be credited to brand loyalty, that is, the probability of old consumers of BYD continuing to put their trust in the brand.

In terms of customer preference, it may also be observed that consumers using overseas brand vehicles remain firm on their preference towards overseas brands, choosing brands like Tesla, Audi and BMW. Compared with BYD, Tesla is more attractive to high-end users.

Although users of luxury cars like BMW, Mercedes and Audi have shown a very positive response towards the newly established Li Auto brand. Li Niang, the founder of Li Autos, also shows much confidence, in June 2023, the founder said on Weibo: "This week, we surpassed the sum of all SUV products sold by any BBA (BMW, BENZ, AUDI) brand in the Chinese market with only three SUVs. With the delivery of Li Autos L6 next year, we are confident that the total sales volume will exceed that of BBA users in 2024."

Of course, it should be noted that the above data is only the data of replacing fuel cars to new energy vehicles. Judging from the overall data, the brand loyalty of overseas brands such as Volkswagen is very high. About 43% of replacement users choose to continue to replace overseas brand models of the same level, but the probability of choosing new energy vehicles of overseas brands now is relatively lower than before.

Judging from the general trend, as predicted in the report, the proportion of replacing new energy for fuel vehicles will further increase in the future. ( Articles/ XN Motors Sarah)