[YesAuto News] On July 6, 2018, the US decision to impose 25% tariffs on US$34 billion of Chinese products came into effect on July 6. And my country's 25% tariff measures on 545 imported goods with a total value of 34 billion U.S. dollars originating in the United States have been officially implemented at 12 o'clock on the 6th Beijing time. Among these 545 items, imported cars are included.
We all know that for the traditional fuel models of the American brand, Lincoln has the greatest impact. So far, all Lincoln models have been sold in the domestic market by way of imports. Previously, Lincoln has made a policy in accordance with the domestic tariff reduction policy. In order to guide the price reduction, the substantial increase in US imported models this time is no less than a blow. Now it has been a week since the implementation of the tax increase policy. What is the current situation of the Lincoln brand? Where should we go in the future? We then look down.
●How much will Lincoln go up after the tax increase?
Expected to increase by 20%
First of all, we need to understand the composition of imported car taxes. Since July 1, 2018, the tariffs on imported cars will be adjusted to 15%, and after July 6, the tariffs on imported cars in the United States will increase by 25%, which is Reached 40%. The comprehensive tax rate (including tariffs, consumption tax, and value-added tax) of imported cars in the United States also increases by 29.2%-48.7% depending on the displacement.
And how much will the cost of the popular models of the Lincoln family have? I found the US official website prices of MKC models and Continental models, and assumed FOB prices. Among them, MKC starts at US$41,166 (approximately RMB 275,400) and the mainland model starts at US$54,866 (approximately RMB 367,100). If calculated according to the comprehensive tax rate for imported cars before July 6, the two models The 2.0T version will charge a comprehensive tax rate of 54%, and the after-tax prices are 424,100 yuan and 565,300 yuan respectively. After July 6, both models will face a comprehensive tax rate increase of 30.7%, reaching a comprehensive tax rate of 84.7%, and the duty-paid value will increase by 84,600 yuan and 112,700 yuan respectively. Judging by the results, the price of imported cars after the tax increase will fluctuate upwards by about 20%. (The results are for reference only)
●After the tax hike, is Lincoln still competitive?
The cost-effective advantage will be filled
Based on the above assumptions, the overall price of imported cars in the United States will increase by 20%. For Lincoln, which has a weak brand premium ability in the domestic market, it will also lose its cost-effective advantage. If you have a favorite Lincoln model, you might as well increase the current price by 20%. I believe that after getting the result, you will definitely have to consider other products of the same level.
●Current market status survey
Small increase in sales in the first half of the year / short-term prices are not affected
On the same day that the tariff increase on imported cars in the United States was announced, Ford Motor announced its sales in the first half of the year. The cumulative sales of the Lincoln brand from January to June were 24,314, a year-on-year increase of 4%. This also has to worry about its annual sales. Sales performance. We must know that in 2016 and 2017, Lincoln's annual sales growth was as high as 180% and 66%, respectively. At the same time, there is another data worth paying attention to. In the first half of the year, when the year-on-year growth was only 4%, the Continental and Navigator models increased by 34% and 76% respectively. This also reflects that in addition to these two models, other models are all There is a certain decline in sales. Of course, this is also related to the mid-term facelift of the two main models of MKX and MKC. These two mid-term facelifts will be officially launched in China at the end of the year, which coincides with this time. The increase in tariffs caused us to sweat for Lincoln’s sales in the second half of the year.
In order to have a clearer understanding of the current Lincoln brand sales, we asked several dealers as consumers. The result is that the current Lincoln model does not increase the official guide price, and there is no current discount in the store. Affected, take the hot-selling SUV model MKC as an example, the discount rate can reach 50,000-60,000 yuan. But at the same time, the sales staff in the store also mentioned that the models currently participating in the preferential activities have been declared before July 6, which is the domestic car. At the same time, it is not clear whether the guidance price will be raised after the sale of these models in the future, but it will not be affected in the short term. In addition, we understand from the manufacturer level that Lincoln will maintain the current price unchanged in the future, and the increased tariff pressure will be borne by the manufacturer. However, according to the tariff cost calculated by us, the cost of each car has increased by 20%. Based on the entry-level MKC, the current price is 275,800 yuan. After the tax rate is increased, it will reach 331,000. It is difficult to say for the increase of 55,000 yuan. How long can the manufacturer maintain the subsidy?
●Where will we go in the future?
Capacity transfer/accelerate the process of localization
As far as the current situation is concerned, Lincoln is in the vortex of this Sino-US trade war, and will be submerged in the torrent if he is careless, and how to save himself has become the biggest problem before him. Of course, no one wants to see a trade war that hurts the enemy by one thousand and eight hundred, but instead of looking forward to a truce between the two sides, it is better to take fate in their own hands. From the current state of view, Lincoln can do. Only the transfer of production capacity or the acceleration of the localization process.
In fact, Lincoln is really not out of the way. After analyzing the tax increase policy, we found that the 25% tariff increase is only for models originating in the United States, and there are three models in the Lincoln family that are produced in the United States. They are MKC/Continental/Navigator, and the other two MKZ and MKX models come from the Hermosillo plant in Mexico and the Oakville Ford plant in Canada, which means that these two models should not be affected by the tax increase. .
If you want to ease the impact of the tax increase on the Lincoln brand as soon as possible, then transfer some of the existing hot-selling models to factories outside the United States for production, whether it is the transfer of production lines or the CKD assembly method, it will be a different way. First, as the domestic market demand continues to increase, this approach can only solve the urgent need, and it is difficult to meet the greater demand.
Since the transfer of production capacity cannot fully meet future demand, another solution is more practical, which is to accelerate the current process of localization. In fact, the voice of the localization of Lincoln brand models has been around for a long time, but it was not until February this year that the Zhejiang Provincial Development and Reform Commission approved the official Lincoln domestic project.
According to previous plans, Lincoln will launch 5 models between the end of 2019 and 2022, including the pilots and navigators we have already seen. The replacement products of MKC and MKZ will also join the domestic ranks. In addition, Lincoln will also A new coupe model is launched in China, and in order to meet the domestic electric vehicle points policy, the above five models will also launch their hybrid versions.
For the current model planning and deployment, it is difficult for Lincoln to make a major breakthrough in time, so how to accelerate the domestic production process? I think we can first use the existing platform to produce domestic models for sale. Although it will face higher cost input, this will reduce the impact of tax increases as soon as possible. Some of the specifications in the production process have enabled the new models to get on track more quickly after being put into production.
In the trade war, Lincoln apparently encountered a stumbling block when everything was ready but the east wind owed it. There is no doubt that in the localization that has been negotiated, Lincoln must race against time to accelerate the domestic production process. In order to consolidate the foundation laid in the domestic market in the past few years, and to continue to achieve the sales target in China. As far as the current situation is concerned, it is unlikely that Lincoln will bear high taxes and fees for a long time. This is what we said before, “the inventory will increase first, and the inventory will increase later.” Indeed, there are still a lot of opportunities in the current Chinese market, but these opportunities are often fleeting. For Lincoln, how to continue to increase its influence in the hearts of domestic consumers and build higher user loyalty It is also the foundation of life.