Yesterday, a reporter learned from several automobile markets, including the Beijing Asian Games Village Automobile Exchange Market, that the price of Guangzhou Honda Accord, which had to be increased by tens of thousands of yuan just two months ago, has now started to decline. Currently, some models of the Accord can be purchased without any price hikes, and dealers have even begun offering discounts. Among them, the 3.0L Accord has seen the largest drop, with a discount of up to 12,000 yuan per vehicle.
Industry insiders noted that the aggressive sales campaigns by dealers for the popular Accord model—once in short supply—indicate that the last line of defense in the domestic auto market's pricing system is beginning to collapse. The demand for cars has historically exceeded supply, but this trend is shifting rapidly.
At the Beijing Asian Games Village car market, Liu Gang, a sales representative from Beijing Cailin Guangmao Economic and Trade Co., Ltd., stated that all Honda Accord models, regardless of displacement or color, are now available at their original prices. Even the 3.0L model comes with a discount of up to 12,000 yuan. The best-selling 2.0L model is also available without any markup, while the 2.4L version offers a profit margin of 1,000 to 2,000 yuan.
When asked about the invoice pricing, Liu explained that local invoices in Beijing are 2,000 yuan higher than those issued elsewhere. Regarding the origin of the vehicles, the company’s staff did not disclose whether they were sourced directly from the factory.
This trend isn’t limited to one dealer. Another salesman from Dongfang Ventures Automobile Sales Co. confirmed that their shop does not increase prices on Accord models and offers a cash discount of 7,000 yuan for the 3.0L model. At Fenghui Tongshun Automobile Sales Company, the 3.0L model was quoted at 309,800 yuan, which is 2,000 yuan below the manufacturer's suggested retail price, plus a 5,000 yuan value in car decorations.
According to the reporter’s findings, although the discount levels vary across different models, one thing is clear: the era where consumers had to pay 40,000 yuan more to buy a current Accord is now over. Before March this year, it was common to pay a premium, but that has changed dramatically.
Wen Yuzhen, a representative from Guangzhou Honda’s office, told reporters that the recent price fluctuations do not reflect any strategic changes in Guangben’s pricing policy. He emphasized that Guangzhou Honda does not take responsibility for the price drops, as they are unaware of the source or distribution channels of these vehicles. The company has consistently maintained that price cuts by dealers are unrelated to its own strategies.
One dealer from the Asian Games Village market explained that the sharp price reductions are due to an oversupply in the market, rather than a lack of demand. In March of this year, the market price for a 2.0L Accord required an additional 20,000 to 30,000 yuan. However, there was no price markup in Beijing 4S stores at that time, and it was nearly impossible to buy a new car without waiting in line.
The reporter contacted seven 4S stores in Beijing and found that all had available inventory. Even the most popular 2.0L model had multiple color options in stock. A Guangzhou Honda sales manager revealed that production capacity will significantly increase this month, with daily output reaching 1,000 units starting July 1st. This expansion is expected to lead to inventory buildup if sales don't rise significantly.
An industry source pointed out that Guangzhou Honda's production expansion coincided with a downturn in the auto market and aggressive price cuts from competitors. As a result, dealers are forced to reduce prices to manage inventory. Unlike other domestic manufacturers, Guangzhou Honda once used a “one-stop†pricing strategy, setting fixed prices that influenced the entire mid-to-high-end car market.
However, since May this year, the recent wave of price cuts has eroded Guangzhou Honda’s pricing advantage. Despite repeated claims from Wen Yuzhen that the company will not cut prices, industry insiders believe that dealers may follow a similar pattern to other manufacturers—first cutting prices for promotions and then the manufacturer officially announcing the reduction.
Analysts suggest that the price cuts by Guangzhou Honda signal the collapse of the domestic auto pricing system. The market could see a sudden drop in prices, much like what happened in the home appliance and IT industries. With many brands announcing price cuts, dealers are likely to further lower prices, leading to a major reshuffle in the automotive industry. (Zhang Lidong Ejia) Source: Jinghua Times
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