Consumers are not swayed solely by price when purchasing a vehicle.

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The Chinese auto industry buzzed with activity in March, witnessing a flurry of product launches. Amidst this flurry, an intriguing contrast emerged: Dongfeng Honda S7 boldly priced its entry model at RMB 259,900, while GAC Toyota BZ3 stunned with a starting price of merely RMB 104,800.

As titans in the Japanese auto industry, Honda and Toyota have taken diametrically opposed approaches, with one prioritizing quality and the other engaging in a price war. Behind this divergence lies a complex interplay of supply chain strategies, quality standards, and pricing decisions.

Competition in the auto sector is intensifying, and Japanese automakers face mounting pressure to transform. However, amidst the urgency of change, automakers must approach pricing and configuration with clarity. Engaging blindly in price wars and pursuing short-term sales volume may not be sustainable solutions. The Chinese auto market is replete with brands and models that rise and fall swiftly.

Hidden Concerns Amidst Accelerated Transformation

A compact pure electric SUV priced at RMB 104,800 sold 10,000 units in just one hour, shocking many consumers. The model behind this achievement is GAC Toyota's BZ3, prompting netizens to exclaim that Toyota has awakened.

This low price is attributable to GAC Toyota's "Sino-Japanese hybrid" manufacturing logic. BZ3's supply chain boasts a 65% share of local Chinese suppliers, with core components fully embracing Chinese technology. The battery comes from ZLNE and CALB, the intelligent solution relies on Momenta's end-to-end driving algorithm, the domain control solution is from Desay SV, and the LiDAR employs domestic sensors like RoboSense's M1. Compared to past Toyota models with a localization rate of less than 30%, this shift signifies a "supply chain revolution".

Some media outlets have revealed that the chassis of GAC Toyota BZ3 is identical to that of the second-generation GAC AION V, although the AION V is slightly larger in size and wheelbase, with minor differences in intelligent driving sensor configuration.

In summary, through full supply chain localization, this "as-is" approach enables BZ3's cost to be over 30% lower than similar joint venture vehicles.

However, the cost is evident: brand premium is diluted. The achievement of over 10,000 orders in one hour seems to validate the strategy's success, but in reality, the low-end version's reduced L2 assisted driving has sparked controversy, with complaints that "the top-end version looks like a new force, while the low-end version resembles a ride-hailing car".

The significant gap between the entry-level and top-end versions ultimately reveals BZ3's insufficient intelligence capabilities, and Toyota still lags behind domestic cars in software iteration. It remains uncertain whether it can continuously enhance user experience through OTA updates.

Some users have also reported abnormal lag in the infotainment system when retrieving the car from the parking lot, resulting in a black screen for up to 3 minutes before restarting. This occasional system crash and the infotainment system's fluidity fall short of the standard expected of an 8155 chip.

BZ3's four-zone independent voice control system has been criticized for its "mechanical interaction": when the front passenger says "turn on the air conditioning," the system fails to automatically recognize the location and requires additional specification. While this design adheres to technical logic, it lags behind the intelligent contextual understanding capabilities of new models.

This exposes the underlying pain of integrating new and old supply chains. GAC Toyota's rapid iteration and China's intelligent ecosystem are not yet fully compatible.

Thus, this race is far from over.

Is Further Acceleration of Localization Needed?

It is nearly inevitable for Japanese automakers to collaborate with China's independent brand supply chain during their transition to new energy. This model offers dual advantages of cost savings and technological iteration, as evidenced by BZ3.

As BYD proclaims "electricity is cheaper than oil" and Wenjie M9's monthly order volume exceeds 50,000, the time Japanese automakers have to make mistakes may not be measured in years. Faced with monthly system upgrades by new players, the pace of joint venture vehicles making changes every three years is insufficient.

Many joint venture brands must localize their supply chains and accelerate their efforts.

However, localization is not a panacea.

Take Changan Mazda as an example. Its first electric vehicle, the EZ-6, launched last year, has gradually become unsellable, and the Mazda3 Axela faces constant complaints. This joint venture automaker has fallen into a transformation dilemma.

Changan Mazda chose the path of localizing its supply chain during its transformation. For instance, Desay SV provides Changan Mazda with products such as in-vehicle infotainment systems, fully automatic air conditioning controllers, and driving information display modules. Additionally, domestic suppliers provide basic components like wheel assemblies, interior parts, and filters.

Moreover, Changan Mazda's EZ-6 model has begun using Changan Automobile's supply chain system, including core components like range extenders and batteries.

The reasons for its failure lie in blurry product positioning and insufficient cost-effectiveness. It lacks differentiated advantages in intelligence, power, space, etc., and is uncompetitive compared to domestic new forces.

What's alarming is that although EZ-6 continues Mazda's handling genes, its design language lacks innovation and has been criticized as "having form but no soul," even disappointing "Mazda fans".

More severely, frequent quality issues with Changan Mazda's products have exacerbated the crisis of user trust.

On Chezhizhi.com, Changan Mazda's best-selling model, the Mazda3 Axela, has received numerous complaints about cracked seats, air conditioning failures, engine cooling system issues, transmission abnormal noises, etc., severely tarnishing Changan Mazda's brand image.

Currently, Changan Mazda's top priority is to reshape its brand image. Ensuring product quality and service during transformation is its responsibility to consumers.

This is particularly crucial for Japanese cars, renowned for their excellent quality and durability.

Among the top three Japanese automakers, Honda is the most resolute. Market discussions about the pricing of its new car, Dongfeng Honda S7, are in full swing, with "expensive" being the predominant impression.

So why is it so expensive? The reason is straightforward. While all enterprises strive to shorten the research and testing cycle for new cars to mass-produce and launch them as soon as possible, and to compress costs to engage in price wars, Dongfeng Honda still chose to invest four years in research and testing, including 1.5 million kilometers of test mileage, over 5,300 vehicle-level tests, 118 collision tests on 59 vehicles, and 48 white body collision inspections.

Dongfeng Honda S7 also features a high-level steering gear from Bosch, akin to luxury cars, with motors from United Automotive Electronic Systems, batteries from CATL, electronic mirrors from Panasonic, and speakers from Bose. The vast majority of suppliers are international first-tier companies.

This results in high costs and explains why Dongfeng Honda S7's pricing cannot be lowered.

Dongfeng Honda's attitude is that it's better to have nothing than something inferior, but will the market agree? Time will tell.

However, whether it's Honda or Toyota, their products have won over Chinese consumers with attributes such as fuel economy, handling, and reliability. It's presumed that neither "Honda fans" nor "Toyota fans" want to see the companies blindly pursue sales volumes and engage in price wars while neglecting quality assurance.

Imagine Toyota's "zero-defect" quality control standard being replaced by AION's cost-oriented supply chain. Toyota's proud "Jidoka" quality control system would be challenging to implement under the AION production system. For instance, Toyota's unique "laser spiral welding" body technology requires dedicated equipment support, which may not be replicable on AION factories' existing production lines.

Toyota's confidence stems from the endorsement of its "global quality control system," and users will never disdain high-quality, high-safety products. However, in the era of new energy vehicles, Japanese automakers still lack a mature new energy platform, and there are relatively few new energy products launched in China. It's believed that the market is still awaiting impressive technological innovations from Honda and Toyota.