"Young Consumers Show Desire for Cost-Effectiveness and New Technologies, Products"
"Concerns Raised Over After-Sales Service and Parts Supply Issues"
Among Millennials & Gen Z in China (those born from the late 1980s to the early 2000s), it has become a trend to purchase electric vehicles from car companies that are on the verge of bankruptcy or have already gone bankrupt at significantly reduced prices.
On November 10, Chinese media outlets such as Sina Finance and Zhonghua Net reported, "It is becoming popular among young people in China to buy cars from electric vehicle companies that have already declared bankruptcy, such as Neta, X-Trail, and HiPhi, at bargain prices."
Mr. Zhang recently searched extensively and was able to purchase a Neta car, originally priced at 149,900 yuan (approximately 30.43 million won), for 77,700 yuan (about 15.72 million won) after discounts and subsidies. He had test-driven a Neta car last year but gave up due to the price, saying, "I was only able to buy it because the car company went bankrupt." Similarly, Mr. Guan obtained a Zhiwei car, originally priced at 219,900 yuan (about 44.72 million won), for 150,000 yuan (about 30.63 million won), expressing satisfaction by saying, "I was able to buy it cheaply because the company went bankrupt."
Sina Finance pointed out that this purchasing phenomenon stems from young consumers' simultaneous pursuit of high cost-effectiveness, new products, and a desire for the latest models. Li Yanwei, a specialist at the China Automobile Dealers Association, commented, "Some young consumers with limited budgets are satisfying their desire to purchase a car by buying vehicles from bankrupt automakers," but also noted, "They may face difficulties due to challenges with after-sales service, parts supply, or technical support."
Recently, a number of electric vehicle companies in China have been undergoing bankruptcy proceedings. Since 2023, various new car brands have emerged, but many have faced production halts, restructuring, or bankruptcy crises. The average selling price of vehicles from major electric car manufacturers, including BYD, dropped from $31,000 in 2021 to $24,000 in 2024. The profit margin in the finished vehicle industry was halved from 8.0% in 2017 to 4.3% in 2024. Out of 130 Chinese electric vehicle manufacturers, only four-BYD, Tesla China, Li Auto, and Geely-recorded a profit last year. Global consulting firm AlixPartners projected that only about 15 companies will remain financially viable through 2030. Li Ke, Vice President of BYD, stated at the Munich Motor Show last year, "The Chinese automotive industry is in the midst of fierce competition," adding, "Companies lacking competitiveness will find it difficult to survive."
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