Introduction

Introduction

Not dying is hope, and where there is hope, there is endless life.

A late autumn rain ended Guangzhou's longest summer on record, bringing a hint of coolness to this scorching southern city.

However, at the 22nd Guangzhou Auto Show held at the Canton Fair Complex on Xingang East Road in Pazhou, 'cool' is unlikely to be the theme or prevailing feeling.

As the year's grand finale for the automotive market, the Guangzhou Auto Show has always served as a report card for the entire year.

Compared to the Chengdu Auto Show in the third quarter, when automakers were pessimistic about the market, leading to waning enthusiasm for promotional activities and tight budget constraints, the fourth-quarter Guangzhou Auto Show saw automakers, media, consumers, and various auto enthusiasts converge in Guangzhou, restoring the bustling atmosphere.

Behind this enthusiasm lies the sudden surge in domestic auto retail sales since September, with two consecutive months of positive growth turning around the declining trend in auto retail sales. Furthermore, retail sales for the first ten months returned to a level of 3.2%, which surpassed most people's expectations.

If industry experts' predictions hold true that 'China's auto market will likely surpass the record sales of 2017 in the fourth quarter of this year, becoming the best-selling quarter on record,' then automotive professionals can look forward to a prosperous year-end.

Often, industry observers tend to paint the best possible picture when describing market trends. When reality falls short, pessimism naturally arises, and decline and survival become the main narrative. However, they overlook one point: regardless of whether it aligns with their expectations, the world presents itself as it is.

Talking about death is too heavy, but not dying is hope.

Returning to the special topic name finalized at this year's Guangzhou Auto Show, the term 'oil vehicle' has a literal meaning. Despite the increasing number of new energy vehicles, the supply of oil vehicles, consumer demand, and momentum are no less significant than electric vehicles. It also has an intermediate meaning, encompassing any vehicle with a fuel tank, making the presence of plug-in hybrids and extended-range electric vehicles even more formidable.

If we delve deeper, 'oil vehicles,' labeled by their engines and fuel tanks, represent the automotive era led by joint-venture gasoline vehicles. From the current landscape, leading brands from the previous era, such as Toyota, Volkswagen, and Honda, are beginning to make substantial progress in new energy strategies and products, forging ahead on the path of electrification and intelligence.

After visiting 14 exhibition halls and walking over 20,000 steps, witnessing the competition between joint ventures, domestic brands, and new forces, many automotive professionals have realized that life and death are not predetermined; as long as there is hope, there will be endless life.

Caesar to Caesar, auto shows to selling cars

Theoretically, the core of an auto show should be the display of technology and trends, or the unveiling of concept cars, which determine the future design and product direction of an automaker. However, after wandering through the entire auto show, concept cars were not the focus. Some automakers, though presenting concept cars, either overexposed them previously or did not place them at the center of their booths, nor did they widely promote them.

I roughly counted over a dozen concept cars at the auto show. Chery brought the Jin Yun leisure MPV, Lie Feng, and Xing Ji Yuan E08, representing Chery's exploration of MPVs, design trends, and interior space redesign. GAC brought the Trumpchi 1 CONCEPT and Guangfeng Boxue 7, both looking closer to production status, representing the upcoming new product styles of these two companies.

The concept car AUDI E concept from the new Audi brand by SAIC Audi, unveiled earlier this month at the China International Import Expo in Shanghai, also made a grand appearance as a heavyweight concept car. The production version of this concept car will soon meet consumers, and the new force brand created by a luxury brand, along with the endorsement by Zheng Qinwen, makes it the most significant concept car at this auto show.

Of course, there are also Nissan's Epic and Era, representing Nissan's latest explorations in electrification and intelligent technology, as well as the redesign of design language and style for the new era. Jiyue presented the AI supercar concept car ROBO X, designed specifically for autonomous racing, with a limited edition of 88 units and a not-so-cheap price tag, expected to elevate Jiyue's brand image. Additionally, Hyundai, with solid experience and exploration in hydrogen energy, brought the hydrogen fuel concept car INITIUM and the N Vision 74 concept car, representing Hyundai's firm commitment to the development of a hydrogen energy society.

Since there weren't many artistic concept cars, the realistic side of the Guangzhou Auto Show was very evident: selling cars wholeheartedly to make a strong finish in the fourth quarter.

Automakers know that Guangzhou, as a major auto consumption province, always orients the Guangzhou Auto Show towards car sales. When I arrived at the exhibition hall at 8 am, many salespeople were already on standby at various booths. Even without on-site sales support, they all shifted to exclusive live streams, hoping to capture online traffic on the first day of the auto show.

Another typical example is the decrease in truly significant new car launches. A considerable number of automakers, such as Geely, Changan, and many new forces, have already unveiled their new products in advance. Without significant new car launches or even new car launch events, more new cars arrive as light or heavy annual models. Automakers' greatest anticipation may lie in orders on public days.

New energy, a turning point

Whether the outside world and all consumers accept the general trend and future of new energy, the development of China's new energy vehicles has now reached a turning point.

For example, the new energy penetration rate announced by the China Passenger Car Association has remained above 50% for the past few months, representing terminal retail sales. This means that more than half of national users primarily choose new energy vehicles when selecting a new car. Additionally, with 512 new energy vehicles displayed at this auto show, supply-side guidance is further driving the explosion of the new energy market.

On the eve of the auto show, there was another significant event in the industry: the official rollout of the 10 millionth new energy vehicle of the year. Reviewing the pace of reaching 10 million vehicles reveals its true essence.

It took China a full 27 years to produce the first million new energy vehicles and reach the 10 million mark. However, it only took 17 months to surpass 20 million vehicles, showcasing an astonishing 'China Speed.' This year's new energy development has accelerated further, with new energy vehicles surpassing 10 million annually for the first time in just 11 months, indicating that China's new energy automotive era is deepening at an accelerated pace.

What's more noteworthy is that the exploration and cultivation of new energy over the past two years have primarily focused on Chinese brands. Foreign automakers, who were initially slow to react, are now watching as Chinese brands leverage the new energy trend to rapidly increase their market share from less than 50% to over 70%. Foreign brands, of course, can no longer sit idle.

After the layout and promotion of new energy in the previous two years, the landing of foreign new energy products at this year's Guangzhou Auto Show and their integration into intelligent cabins and driving systems have ushered in the next phase of foreign participation in the new energy battle, marking a new turning point in the entire automotive market competition.

For example, Dongfeng Nissan, with its home base in Guangzhou, brought the first pure electric sedan based on its new energy technology architecture, the Nissan N7. With an inductive front end, trendy lighting systems, zero-pressure seats, a Qualcomm 8295P cabin chip, and the first cabin collaboration with Huawei HarmonyOS among joint ventures, these are currently leading configurations for new energy vehicles. Additionally, the collaboration with Momenta to create advanced intelligent driving systems and end-to-end large models has made joint ventures more fashionable and avant-garde.

Another example is GAC Toyota, whose entire booth was almost entirely dedicated to the Boxue brand, with existing models like the Highlander, Camry, and Sienna taking a backseat. This signifies that in the era of China's new energy dominance, GAC Toyota represents the determination of mainstream joint ventures to transition towards electrification and intelligence.

One of the representative models is the Boxue 3X. Unlike the previous GAC Toyota bZ4X, the interior of the newly unveiled Boxue 3X looks very sleek, essentially aligning with current smart car interior design. It comes standard with an 8155 chip and features four-zone voice recognition.

Apart from the cabin, the intelligent driving system is also impressive. The Boxue 3X will be equipped with an L2++ end-to-end intelligent driving system jointly developed by GAC Toyota and Momenta, even featuring the NVIDIA OrinX chip and LiDAR, making it one of the first global automakers to achieve an end-to-end intelligent driving large model. With a predicted price range of 150,000 to 200,000 yuan, joint ventures have caught up in terms of both brand image and value ratio.

Of course, North Toyota also has a similar product, the bZ3C, featuring a 15.6-inch HD screen, 5G communication, over 200 third-party apps, the first driver and passenger dual monitoring system in its class, and the first triple interaction system combining gesture control, intelligent voice, and hand-vehicle interconnection. It will also be equipped with the Toyota Pilot advanced intelligent driving system developed in collaboration with Momenta, making the traditionally old-school Toyota increasingly avant-garde.

There's also Honda's new electric brand, with Guangben's Ye P7 and Dongben's Ye S7 fully embracing domestic supply chains, representing a culmination of Chinese elements. They comprehensively embrace the Chinese market in terms of exterior and interior design and intelligent technology, not only changing the dull and outdated image of joint ventures but also aiming to 'reshape the intelligent electric era for joint ventures.'

Another example is the luxury brand Audi. Apart from the Audi mentioned earlier in collaboration with SAIC, which adopts a more Chinese technological style and attributes, the domestic debut of the Audi Q6L e-tron features the significant change of being equipped with Huawei intelligent driving, making it the first luxury pure electric vehicle to do so. It is equipped with dual LiDAR, which is highly advanced even among new forces, and supports full-scenario advanced intelligent driving at the L2++ level without high-definition maps.

Behind these changes lies the result of close cooperation with Chinese enterprises. After foreign brands' distrust of Chinese technology, hitting a wall in the Chinese new energy market, and finally realizing the appeal of Chinese new energy technology and supply chains, foreign vehicles, marked by 'oil vehicles,' are also reshaping their new era in China.

So don't say that joint venture new energy vehicles are no good anymore.

'Fuel' the hope

Since new energy vehicles are so popular, and joint ventures and luxury brands are all in, does this mean the demise of fuel vehicles?

Data from the first ten months of the Chinese market shows that from January to October, domestic sales of traditional fuel passenger vehicles totaled 9.046 million, a decrease of 2.332 million or 20.5% year-on-year. In 2023, domestic sales of traditional fuel passenger vehicles were 14.043 million, a year-on-year decrease of 7.2%. This indicates that the decline in domestic sales of traditional fuel passenger vehicles has further widened.

Even though many consumers are still caught in the battle between fuel and electric vehicles, the existence of fuel vehicles remains an indispensable part of the market. While new energy vehicles dominate daily news reports and social media, for the vast majority of consumers, fuel vehicles are still robust. This is evident at this year's Guangzhou Auto Show, where while there are 512 new energy vehicles, the number of fuel vehicles exceeds that of new energy models.

Although Mercedes-Benz is led by the electric G-Class, fuel vehicles are the guardians of its luxury niche market. The 2025 GLC Coupe SUV is equipped with the Qualcomm 8295 smart cabin chip and L2+ navigation-assisted driving system, featuring Mercedes-Benz's latest third-generation MBUX intelligent human-machine interaction system. It also proclaims the slogan 'Intelligent luxury knows no fuel or electricity,' demonstrating its commitment to the fuel vehicle market.

BMW's entire booth focuses on the sporty M series, indicating that as Chinese new forces gradually penetrate the high-end market, BMW aims to attract and guide the market with its sporty performance label. Of course, the unveiling of the new long-wheelbase X3 and the arrival of the new fuel MINI also represent BMW's continued dedication to fuel vehicles.

Another luxury brand, Audi, although introducing significant new energy vehicles, also presented the A5L, a replacement for the Audi A4L, as one of the heavyweights at this auto show. Even with new energy vehicles taking the lead, fuel vehicles remain indispensable.

Of course, the way of life for fuel vehicles may change. SAIC Volkswagen's Weiran made a splash with its one-price listing of 199,900 yuan, which is indeed eye-catching and topical. The Volvo XC60 Midnight Black, also unveiled at the auto show, has a starting price the same as the Weiran, essentially a direct reduction of 100,000 yuan compared to previous models.

But in fact, this is just putting the original terminal discounts on the table. In the context of such fierce market competition, hiding them is meaningless and easy to be ignored by consumers. Directness is the real truth.

There are also the Red Flag Golden Sunflower over one million yuan at the auto show, FAW-Volkswagen TAYRON L, and Cadillac XT6, all typical representatives of fuel vehicles. The Chinese market is vast, with diverse consumer demand, and a considerable number of fans of fuel vehicles can still support the development of the fuel vehicle market. Moreover, the fuel vehicle supply chain built over the years involves so many enterprises, so it is more important to maintain rationality and orderly change.

On the other side of "fuel" are the actual consumer demands supported by hybrid and extended-range vehicles. Judging from the development trend and consumption situation of fuel vehicles and pure electric vehicles in recent months, the previously considered middle ground is becoming more mainstream. GAC AION, which originally only produced pure electric vehicles, announced the launch of an extended-range and plug-in hybrid multi-energy route by 2025. The display of new models such as Geely Galaxy Starship 7EM-i, GAC Trumpchi S7, and Changan Deep Blue extended-range represents a new direction for hybrids.

Actually, from the policy perspective, or even the national level, the existence of fuel is gradually being placed in a more important position. At the annual meeting of the China Society of Automotive Engineers on the eve of the auto show, Guo Shougang, Deputy Director of the First Department of Equipment Industry of the Ministry of Industry and Information Technology, stated that while vigorously developing new energy vehicles, it is also necessary to simultaneously promote the development of internal combustion engine technology to stimulate the development synergy of traditional energy vehicles and internal combustion engine plants.

This is different from the previous statement of the Ministry of Industry and Information Technology to vigorously develop new energy, which means that the national and policy trends are gradually adjusting. In fact, this is a very important signal. Combined with the previous national-level evaluation of new energy that "new energy is not equal to electrification, but the common development of multiple energy forms," it can also be seen that the future of "fuel" will not necessarily be a dead end as believed by new energy vehicle professionals.

As some viewpoints suggest, the new energy industry drives the national industry and economy. Currently, new energy is not profitable and even incurs significant losses. We should be vigilant against the herd mentality, which can lead to chaos, and should properly plan for emerging industries, understand market size and risks, and prevent blind advancement, resulting in ultimate failure when fighting alone.

However, according to the trend of supply-side driving market demand, the growth and development of new energy will further accelerate. Especially now that independent brands, new forces, and joint ventures are basically on the same track, competition pressure will further intensify, and the struggle will be even more brutal.

With the strong subsidies for new energy, the development speed has exceeded expectations. The entire market has flourished throughout the year. But what about next year and the year after? The stimulus of subsidy policies will inevitably lead to consumer overspending, driving the automotive market to fluctuate up and down in a wave-like pattern. This is an inevitable rule.

However, this also leaves some room for the adjustment of industrial structure and corporate strategy. Only by withstanding the devastation of the times and difficulties can the Chinese automotive industry move more steadily.