No road is easy to follow
Photo: Wood Tree Wood Tree
Edit: Mei Mei
At the end of the year, some people are happy and some people are sad, just like the students' final exams, how the results are, which directly affects the mood of the "New Year". We once said that the faster you post the report card, the more you can show confidence and confidence, and vice versa, you can only avoid its sharp edge and act in a low-key manner. However, FAW Hongqi has some exceptions.
Although it is still nearly 138,600 vehicles away from the sales target of 400,000 vehicles, the Hongqi brand dares to face life and still takes the lead in releasing the report card, announcing on December 1 that it exceeded 25,400 vehicles in November, an increase of 1.5% year-on-year. As of November, Hongqi's cumulative sales exceeded 261,400 vehicles, an increase of 46.7% year-on-year.
Compared with 2020, this year's environment is more complex, the market competition is becoming more and more fierce, as a domestic luxury brand Hongqi can ensure such growth, it is worth affirming, and even valuable. However, can the monthly sales of more than 20,000 vehicles cheer up the "military heart"? The answer may be self-explanatory.
The gap is in front of you, can the red flag create a miracle of monthly sales?
Last year, Hongqi can be described as a high song, selling more than 30,000 vehicles a month for many months, and finally stepping on the line to complete the task, which is gratifying and congratulatory. Thanks to the good momentum of development, Hongqi even raised its sales target for 2021 to 400,000 vehicles in August last year, and plans to double sales again this year. Unfortunately, the "step" has taken a little bigger, and this challenge is difficult to achieve.
Unless there is a miracle, the gap of 138,600 vehicles, to be filled in a month, the probability of completion is almost zero, even if it is a "BBA", it is almost impossible to complete the task. At the end of the year, efforts were made to rush a wave, with monthly sales exceeding 38,600 vehicles and achieving annual sales of 300,000 vehicles, which is hope for Hongqi.
As a luxury brand whose brand recognition needs to be improved, increasing the sales volume of 100,000 vehicles per year is already a relatively difficult challenge to complete, and the challenge of doubling can be had, but it is slightly embarrassing to achieve nothing, and everyone laughs at it, but hongqi overestimates its ability to challenge impossible tasks.
Therefore, there is reason to believe that although Hongqi took the lead in handing in the papers in November, it was more or less mixed in its heart.
Challenges cannot be inevitable, and it is no accident that tasks cannot be accomplished
Some people may ridicule how big the hand is, how big the bowl is, and the attempt to "how bold people are, how productive the land is" should be cautious. But on second thought, you don't force yourself, how do you know how good you are, in case Nu tries to bite your teeth, the goal will be achieved? Even if it can't be completed, to impact in a higher direction, you can find the gap, and then find the crux of the problem to improve, and the breakthrough is also a kind of progress. It can be seen that challenging the doubling of sales is an expectation and an inevitable behavior.
So why do we say that it is no accident that the red flag will not be able to complete the task this year?
First, the lack of core impact of the general environment. The impact of the epidemic + chip gap on the entire automotive market is obvious to all. As such, we are fortunate to admit that it has been affected by chip shortages in global supply chains. After all, Hongqi officials have a poster of "Like-minded Broken Core Knot" to cheer up the company's employees and dealers.
However, the data does not seem to "buy it". Relevant statistics show that from March to July this year, Hongqi's ending inventory continued to rise, and by July, it had climbed to nearly 20,000 vehicles. According to the results of the July auto dealer inventory survey released by the China Automobile Dealers Association, Hongqi is also one of the brands with the highest inventory depth in July this year, with an inventory coefficient of 2.02. It was not until the third quarter that the inventory coefficient of Hongqi began to have a downward trend.
The difference between the data and the official news shows that the impact of the chip is the reason, but not the main factor. You wait, we'll move on later, and we'll look at the other factors first.
Second, the market is rolled up, the brand power of the red flag "feelings" is weakened, and the cake is difficult to grab. Although consumption has upgraded, the cake does not necessarily increase exponentially, and to get a share in the Red Sea market, it is impossible to grab food with only one card.
Since the return of Hongqi, BBA, Lexus, Volvo and other first- and second-tier luxury brands that have accumulated for a long time have been constantly exploring in order to survive, and the mainstream independent brands in the domestic market have been high-end and new power brands have occupied the new pit, some of these brands have a thick foundation, some are flexible, everyone's direction is still very clear, and the limits of the share that Hongqi can get can be imagined.
From the perspective of the Hongqi brand, it is advantageous to cut into the market with the card of national feelings, which is higher than the starting point of the new force brand that came out of thin air. However, a bottle of perfume always runs out, and if you want to continue to attract people, Hongqi has to seek other ways. Obviously, when the major brands are crazy to please young people, the "feelings" style held by the Hongqi brand has not impressed more consumers, but after harvesting a bunch of uncles with feelings, it is somewhat incompatible with the main force of young consumption. You ask them the heart of the Hongqi brand, and they will at most put the Hongqi in the second-tier luxury block.
Therefore, hongqi, which lacks other strong labels to support, has seen a decline in sales in the same period and a month-on-month decline in the good months of this year, and in September this year, even the best-selling Hongqi HS5 did not sell tens of thousands of units that month.
Third, the product support is insufficient, and the target span is slightly larger. Previously, we also analyzed the sales structure of Hongqi, the volume is always relatively close to the people, and in the eyes of consumers has not been identified as a high-end luxury model, such as Hongqi HS5, Hongqi H5 can be said to be two models to support half of the sales.
Speaking of which, we are going to explain the previous "difference" problem. From the terminal, it is understood that the supply is short supply of Hongqi HS5 and Hongqi H5, which are indeed affected by chips. But the backlog of inventory is the Red Flag HS7 and the Red Flag H7. It can be seen that the other "leg" of the relative volume is somewhat "slack", and it is naturally much slower to walk, and the pressure in the second half of the year is particularly large, to know that from January to June, Hongqi only accumulated sales of 145,000 vehicles.
What's more, if a brand wants to continue to grow in sales, there is no diversified word-of-mouth products or new products that meet the needs of mainstream consumer groups in the market, and it is easy to be eliminated after all. From the current sales situation, the potential of Hongqi HS5 and Hongqi H5 has approached the limit, there is no follow-up fresh blood to keep up, do you want to rely on Hongqi H9, Hongqi E-HS9, Hongqi H9+, etc., mainly to earn high-end models to go? This is clearly unrealistic.
Then let's look at the original product matrix plan of Hongqi, L (supreme level), S (coupe), H (mainstream car), Q (commercial vehicle), Hongqi built four series of products, but even after the electrification of some models, it has not been able to get the admission ticket of "explosive model", and I don't know whether the plan for new products to shine is pushed to next year.
Since the product matrix is not enough, the brand power has not improved, and the large environmental impact is still continuing, the original sales target is relatively high, but the reality is that Hongqi has not adjusted the sales target of the dealer.
Fourth, cross-border cooperation, treating the symptoms rather than the root causes. I believe that many friends will also have the same question, although the Hongqi brand has sold more than 200,000 units a year, but the street rate is not high, is the market volume too large, or do consumers with feelings buy a car and go back as a collection? Often the market calls it "special supply". There have been media reports that in 2020, Hongqi launched the "one red flag car per person" plan internally, just like handing over a piece of evidence to the "special offer".
This year, Hongqi and Wanda reached a strategic cooperation, and the cross-border handshake between real estate and car companies is a good road, but we have reservations about sustainability. At present, Wang Jianlin personally took the lead in replacing all Wanda executives with Hongqi brand models, which is a trust in the Hongqi brand and also solves the urgent need of Hongqi. But we can't help but ask, in order to solve a little more urgent needs, who will be the next large-scale cooperative enterprise, and the next one?
The road is getting more and more bumpy, can the red flag successfully break through?
Look back at the "military order" of the red flag: it will be raised to 500,000-600,000 vehicles in 2022, raised to 700,000-800,000 vehicles in 2025, and hit the target of 1 million vehicles in 2030. According to the previous statement, Hongqi can hardly complete the task by relying only on "feelings" and two main models, and it has to reorganize future plans, including sales targets.
It can be seen that the road to the future automobile market will become more and more difficult to walk, and the reshuffle is also close at hand. If Hongqi believes that grasping the uncle, you can't rely on feelings alone, retired and non-retired uncle market has room to tap, but the demand is different, and there must be diversified products that can make the uncle pay.
If you want to break the original situation and explore the young main force, then in addition to product planning, the adjustment of brand marketing is also necessary. Chang'an, Geely, Great Wall and other mainstream independent brands "storytelling" ability is already very strong, there is also a basic precipitation in young people, coupled with the promotion of users to create budding and developing of new power brands, red flag to impress young people, high cost of transformation, competitive pressure, can be described as obstacles and long. The difficulty is that if you want to break through more markets and grab more cakes, this road has to be taken.
There are limitations, but it does not mean that there is no strength to break the game. At least Hongqi has opened up cross-border cooperation with Wanda, indicating that it has understood that it has encountered a bottleneck and has the mentality of seeking another way. In addition, as a symbol of the national automobile high-end brand, Hongqi's foundation is able to compete with foreign car companies, and it carries the high hopes of the nation, and I believe that FAW Group will do its best to support this Chinese luxury brand.
Write at the end
A challenge failure is not terrible, we admire the challenge spirit of Hongqi and the attitude of facing the results, I hope that this year's Faqi brand will be summarized well, and in the next year, we will get good news.