Recently, the “price reduction wave” has swept through the automobile industry. Dongfeng Citroen started to cut prices significantly. The original price of C6 was 210,000 yuan, which was directly reduced to 120,000 yuan, which immediately aroused public opinion. Afterwards, brands such as Honda, General Motors and even Mercedes-Benz and Audi followed suit. So far, at least 30 brands have participated in this price war.
The editor usually pays attention to car-related news, so I will not miss it when I encounter such a big melon. But thinking more deeply, this scene in the automobile industry now cannot be said to have nothing to do with what is happening in the textile industry. It can only be said that they are exactly the same.
Standards spark change
The incentive for this “tide of price reductions” is the upcoming “National VI B” which is known as the most stringent emission standard. Many previously produced stock cars do not meet the new standards and need to be sold before the standards are released. This has put great pressure on car companies.
In the past two years, policy changes caused by environmental protection have also had a huge impact on the textile industry. If some traditional textile and printing and dyeing finishing companies do not invest enough in technological transformation, it will be difficult to meet the increasingly strengthened environmental protection requirements, and it is becoming more and more difficult to survive. getting bigger.
Inventory, eternal pain
Price reduction is always the most effective way to clear inventory. This time the car brand price war has indeed attracted a large number of consumers. Because Citroen’s price reduction is Hubei’s policy, many consumers went directly to Hubei to order cars, and all 4S stores were fully booked. If one car company cuts prices and seizes the sales share of other car companies, other car companies will either follow suit or wait for their own inventories to explode, triggering a domino effect, so they get involved.
This reminds the editor of the textile market in recent years. In 2019, when the price of gray fabrics was slightly lower than the cost, it was called selling. It was considered news once it happened. But starting from 2020, as the inventory pressure continues to increase, the pressure on Selling at cost price has become a routine practice for textile companies. Gray fabrics at a lower price than cost are not difficult to buy as long as they are in cash. Many cloth bosses have told the editor that the cost of using gray cloth bought from outside to make fabrics is lower than that produced at home.
Sir, times have changed.
For deep-seated reasons, the dividend period for gasoline vehicles from established joint venture brands is about to end. With the rapid development of the new energy vehicle industry and the improvement of the technical level of China’s own brands, the trend of pure electric and hybrid vehicles replacing fuel vehicles cannot be changed. The process of changing times is a process of waves washing away the sand.
The same is true for the textile industry. Low-end industries are constantly moving to Southeast Asia, competition is intensifying, and the importance of R&D and design continues to increase. Textile companies are engaging in fierce competition from all aspects of management, logistics, and technology. The process of survival of the fittest is painful, but it is inevitable.
The era of great involution
In the automotive industry, not only fuel vehicles are rolling in, but new energy companies are also rolling in. In order to seize the market, car companies such as BYD, Tesla, NIO, and Xpeng will also launch considerable discounts in 2023.
In the textile industry, it is not just the regular “bulk goods” that are being rolled out. Even some fabric companies that serve high-end brands have also seen their profits compressed in the past two years. Coupled with the ever-increasing costs of technology development and fabric research and development, the actual receipts The profits are not high either.
In the process of turbulent times, survival is the first priority for enterprises, and the prerequisite for survival is sufficient cash flow. When the increment is reduced and stock competition enters, costs and profits are no longer the first issues to be considered. The top priority is how to maintain market share.
But looking at it from another perspective, for consumers, the more intense the price war, the better, and it can indeed promote consumption.
Just like “Jiangnan Leather Factory has gone bankrupt” that was posted on the street in the past, consumers can be attracted to see it as soon as they hear it. But for enterprises, this kind of “tearful sale” is not a long-term solution. Cash flow is limited. If this bleeding continues, it will depend on who can survive to the end.
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