The ”Quiet“ Chengdu Auto Show

Last Friday, Chengdu was shrouded in the misty autumn rain. The temperatures turned from hot to cool, adding a tint of desolation. This atmosphere matched the mood of the media people who came from all over the country to attend the Chengdu Auto Show.

I believe that the media folks who have just finished participating in the Chengdu Auto Show have noticed some significant changes. First of all, there were significantly fewer paid hotel and invitation letters that used to be handed out by autormakers. This also led to many media only being able to participate in the press conference online. In the past, car manufacturers explicitly required “no online participation,” but this year they opened a green channel for online participation.

Secondly, the “XX brand night” events that used to be held by various automakers on the eve of the auto show have all disappeared this year without exception. Moreover, the various car advertisements that used to stretch from the subway along the exhibition site in previous years have also disappeared this year, leaving only bare car show theme introduction banners.

Thirdly, the media day at the beginning of this year’s auto show has reduced the time for media to take photos of cars. Many media complained that it was even harder to take a “clean” photo of a whole car than to reach the sky. This is because, although theoretically the media day does not allow visitors to enter, in reality, visitors are allowed to enter, which leads to the exhibition area being filled with visitors watching cars, and the media can only contact manufacturers to find another way.

According to a car company executive who spoke to the TiPost App, the reason why the auto show is being “stingy” towards the media this year is because the manufacturers have limited budget for activities. It is reported that due to the suffering from the price war that has continued since the beginning of the year, coupled with the continuous decline in the profit of oil vehicle sales and the continuous increase in investment in electric vehicle research and development, car companies are generally having a tough time this year.

Although the Chengdu Auto Show is one of China’s four major A-class auto shows alongside Beijing, Shanghai, and Guangzhou, it is different from the Beijing and Shanghai Auto Shows, which focus on display and brand promotion. The emphasis of the Chengdu Auto Show is on experience and sales, which is also an important reason why the media refers to the Chengdu Auto Show as the “car selling festival.” However, this year, it seems that selling cars has become the only theme of the Chengdu Auto Show.

So, can the Chengdu Auto Show, which prioritizes “car sales,” fire the first shot of the “golden September and silver October” before the peak season for car sales arrives?

Start selling cars in advance

In fact, the quiet atmosphere perceived by the media does not represent the true atmosphere of the Chengdu Auto Show. On the contrary, this year’s Chengdu Auto Show is particularly lively and popular.

According to official statistics, this year’s auto show brings together a total of 1,600 exhibited vehicles from 129 brands, including German, American, French, Japanese, Korean, and joint venture and independent brands. This number is roughly the same as in 2022, and even one brand and three brands more than in 2022 and 2021, respectively.

In terms of the number of new car launches, this year’s 66 sessions are four sessions fewer than last year, but six sessions more than in 2021. Therefore, in terms of the enthusiasm of manufacturers’ participation, this year can be said to have increased rather than decreased compared to previous years. The difference is that the manufacturers’ participation purpose this year is only to “sell cars.”

How enthusiastic are car companies about selling cars? The following scenarios may explain.

“Sir, are you interested in getting to know Volvo cars?” “Sir, are you interested in Cadillac?” …Inside the exhibition hall, these car brand sales personnel who solicit customers can be seen everywhere. Although some people comment that this approach may lower the brand’s image, car brand dealers who have made selling cars their primary task can no longer be concerned about that.

Even in the case of unknown launch time and price, many brands will not miss this rare opportunity to explore sales clues. For example, the Jiyue brand, which is participating in the auto show for the first time, displayed the Jiyue 01 and car robot concept planned to be launched at the end of this year, but their main focus was on early customer solicitation. For this purpose, the brand dispatched dozens or even hundreds of staff members distributed in various corners of the venue, giving away purple tote bags and various exquisite small gifts with the Jiyue logo to obtain customers’ phone numbers and other information.

This makes the handbags with the prominent 极越 (Jiyue) logo particularly eye-catching, spread throughout almost all venues. It is unknown whether it can achieve the dual purpose that 极越 wants to achieve – expanding the brand’s user visibility as a new brand and obtaining a large number of sales leads.

Car brands using live streaming software to start pre-sales

Pre-selling cars has become a common phenomenon at this auto show. According to the TiPost App, more than 90% of the new cars at this auto show were released through pre-sales, especially for some popular models. For example, the Tank brand 400HiT-4 starts pre-sales at 285,000 yuan, the Haval Raptor starts pre-sales at 160,000 yuan, the Geely Galaxy L6 starts pre-sales at 128,000 yuan, the BYD Sea Lion DM-i starts pre-sales at 176,800 yuan, the Changan Deep Blue new SL03 starts pre-sales at 145,900 yuan, and the Equation Leopard Leopard 5 starts blind pre-orders at 300,000 yuan… There are countless similar pre-sales.

A head of a car manufacturer told the TiPost App that as an auto show primarily focused on selling cars, major car brands certainly don’t want to miss this largest car sales event in the country. However, car manufacturers don’t want to arrange important press conferences at the Chengdu Auto Show, so they can only participate in the show through pre-sales. The benefit of doing this is that it leaves enough suspense for the upcoming official launch conference and, more importantly, allows them to gather a large number of potential orders in a short period of time.

It is worth noting that as soon as the press conferences of many car brands end, the staff on the booths immediately turn into salespeople for the dealerships’ 4S stores, in order to start selling cars in advance. A salesperson from a Tank brand 4S store said that her main task for this visit to the auto show is to attract customers to experience the newly released pre-sale price of the 400HiT-4 model.

The enthusiasm of the local people in Chengdu seems to be exactly what the car brands need to start the pre-sales mode.

Exhibition booths attracting nearly ten thousand visitors per day

“It’s crowded, with people everywhere. Buildings 1 to 16 are full of people. It’s best to take the subway there because there are hardly any parking spaces above or below ground.” This is how one person described the lively atmosphere of the auto show after visiting on the first day of the public day on the 26th.

“There were so many people that you couldn’t see the whole car without squeezing.” An automotive media practitioner described the popularity of the car show that day.

According to my observation, the peak time for the number of visitors on the first day of the car show was between 1 and 4 pm, but the major exhibition halls had significant differences due to different brand attributes.

The most popular exhibition hall is Hall 10, which is mainly focused on new energy vehicle brands. It gathers high-profile independent new energy brands such as NIO, Zhiqi, Xiaopeng, Jike, Avita, Gahe, Lantu, and Weipai. The first booth after entering is NIO’s booth, and there is a long queue at the entrance. NIO prepared gifts such as mugs with NIO logo for visitors, but only those who scanned the QR code to download the NIO app could receive the gifts and enter the exhibition hall.

Not only NIO, but also other brands prepared gifts for visitors. The first offline exhibition of Byton’s brand, the Byton M-Byte, was held at this year’s Chengdu Auto Show. After the press conference, there was also a long queue at the entrance of Byton’s booth, just like NIO’s booth, people also lined up to receive gifts before entering the exhibition hall.

The queue at the entrance of Byton’s booth

However, it is undeniable that the Byton booth and the adjacent Yangwang brand booth are the most popular booths at this car show, without a doubt. TiPost App noticed that in the center of the Byton and Yangwang booths, there were waves of crowds surrounding the Byton M-Byte and the Yangwang U8. This is in stark contrast to the deserted Lexus booth opposite. Interestingly, the sales personnel standing in a row at the Lexus booth also raised their phones to “look up” at the Yangwang booth across.

Compared to Hall 10, which is like the scene of the Spring Festival travel rush, and Hall 3, which is dominated by the BYD brand, Halls 1 and 2, which are mainly focused on gasoline vehicles, appear particularly deserted. Especially Hall 1, which gathers Japanese brands such as Toyota, Honda, and Nissan, is particularly quiet.

Observation shows that the reason for the emptiness of Hall 1 is that most of these brands did not hold brand release events on the same day, but only sent local dealers from Chengdu to participate in the exhibition. Moreover, their booth layout lacks the design sense seen in other booths, and only displays all the models available for sale by the brand. This results in a situation where the cars are seen, but not the people, at the booths of Japanese brands.

Overall, this auto show is very popular. According to a local resident of Chengdu who visited the exhibition on the 26th, he told TiPost App, “I came here for new energy vehicles, and I specifically looked at the Xiaopeng G6 online. I wanted to experience the details of this car at the auto show, but unfortunately I had to wait in line for at least half an hour to see the details.”

The high number of visitors has also boosted sales for many brands. According to TiPost App, on the first day of the exhibition on the 26th, BYD’s booth had nearly 10,000 visitors, with final sales of around 100 units and more than 40 group orders. Many brand representatives also stated that the visitor traffic at this Chengdu auto show is quite significant, and many brands are receiving double-digit orders daily.

Overall, as an auto show that almost gathers all brands and models on the market, its ability to stimulate consumption is far greater than that of traditional 4S stores. Firstly, it saves consumers the time and cost of comparing different brand models at the same price point by eliminating the need to visit multiple locations across the city. It should be noted that it would take weeks or even months to experience all brand models in a city, and it is not guaranteed that all desired models can be experienced due to limitations of the city. However, the auto show can provide convenience for these consumers to experience all models in a short period of time, ensuring that they can experience all models of all brands in one day. Therefore, the auto show itself aggregates all brands and models, greatly compressing consumers’ decision-making time, and achieving significant sales volume in a short period of time.

Secondly, due to the high visitor traffic, the consumer atmosphere at the auto show is incomparable to that of traditional 4S stores, especially for consumers who come with their families to view cars. In an environment with a lively atmosphere, it is easy to generate car purchase behavior. This is because the lively atmosphere will stimulate people’s desire to buy and make impulsive purchases. Especially with the continuous incentives from manufacturers, impulsive consumer behavior is more likely to occur.

Many industry insiders are optimistic that this highly popular Chengdu auto show can kick-start the traditional sales peak season of “September and October”. Cui Dongshu, Secretary-General of the China Passenger Car Association, also stated that with the support of the Chengdu auto show at the end of this month, the heat of the auto market in August remains. According to the China Passenger Car Association’s forecast, the overall sales volume of the auto market in August will reach 1.85 million units, a 4.7% increase compared to the previous month. Among them, the retail sales of new energy vehicles will reach 700,000 units, a year-on-year increase of 31.5%, and the penetration rate will reach a new high of 37.8%.

Price War Spreading

It is undeniable that the high traffic at the Chengdu Auto Show is also related to Chengdu’s ranking among the top in national car consumption.

By the end of 2022, Chengdu ranked second in the national urban car ownership rankings with a total of 5.896 million vehicles, just behind Beijing’s 6.224 million vehicles, far surpassing first-tier cities like Shanghai, Guangzhou, and Shenzhen. In July, Chengdu’s car sales also ranked in the top three nationwide, second only to Beijing and Shanghai.

Moreover, as a key hub of China’s automobile industry, Chengdu is at the forefront of automobile industry development in the country. By the end of 2022, Chengdu had gathered more than 30 complete vehicle manufacturers including Volkswagen and Geely, as well as nearly 1,000 automotive key component companies, with an annual automobile production capacity exceeding 2 million vehicles.

It can be seen that the high ranking of the automobile industry development and the huge base of car ownership in Chengdu are the underlying reasons for the high popularity of the Chengdu Auto Show. This has also led to many car brands continuing the price war at the auto show in order to seize the attractive Chengdu car market.

The first shot of the price war at the Chengdu Auto Show was fired by the Aweta brand under Changan Automobile. On the eve of the official opening of the auto show, the Aweta 11 Hongmeng Edition announced a starting price of 300,000 yuan and a policy of 5,000 yuan deduction for 25,000 yuan, equivalent to a direct discount of 20,000 yuan at the launch, plus the new car itself is 19,000 yuan cheaper than the old model, equivalent to a direct price reduction of 40,000 yuan for the new car compared to the old model.

Popular Hall 3

The price war at the auto show venue became even more intense. With the support of the 800V platform, Zhi Ji LS6 directly offered a blind booking price starting at 230,000 yuan, equivalent to changing the benchmark from the previous 350,000 yuan level NIO ES6 to a 250,000 yuan level Tesla Model Y. On the other hand, Tank brand Hi4-T under Great Wall Motor just announced a starting price of 285,000 yuan, while the first model of BYD’s Formula Leopard, the Leopard 5, started blind bookings at a price of 300,000 yuan, implying a close-quarters battle.

In addition, the pre-sale prices of the Geely Yinhe L6 starting at 128,000 yuan, the Haval Menglong starting at 160,000 yuan, the Changan Shenlan new SL03 starting at 145,900 yuan, and the BYD Haibao DM-i starting at 176,800 yuan all generally lower than expected. Following the industry tradition of official prices generally being 10,000 to 20,000 yuan lower than pre-sale prices, these models may continue to set new price lows for plug-in hybrid models of the same level, intensifying the price war. This is good news for consumers, but may not be beneficial for the healthy development of the industry.

Final Thoughts:

Based on observations in the past few days, although the Chengdu Auto Show appeared desolate in the eyes of the media, it experienced a peak in visitor traffic on the first day after the media left. This is related to the emphasis chosen by automotive brands based on their budget and the consumption potential inherent in Chengdu as a major city for automotive consumption. Data shows that the Chengdu Auto Show in 2021 recorded 37,730 new car transactions, with a total sales volume of 6.516 billion yuan and an average price of 170,000 yuan per vehicle. According to several exhibitors, based on the visitor traffic on the first day, this year’s transaction volume may exceed that of 2021.

In 2021, the majority of sales in the auto show was perhaps dominated by joint venture brands, but this year it is highly likely to belong to domestic brands. 

(This article was first published on the TiPost App. Author: Wang Ruihao and editor: Zhang Min.)

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