State-owned enterprises incubate new brands, with roughly the same starting point, but they still go their separate ways. The final referee is, of course, the market, but we can touch the similarities and differences in their business models and operational ideas through a multi-dimensional perspective.
Author 丨Zice
Edited 丨tian grass
Produced 丨 Automan Media
The last period of 2021 is a landmark node for China's auto industry. Because in November, Chang'an became the last large state-owned enterprise to come up with an independent new brand.
These new brands are all independently established companies or business units, and the talents, management mechanisms and operation and maintenance of the three lines of research, production and marketing are independent of the parent company; at the capital level, they all plan to raise funds abroad and seek listing. In fact, it is an incubation mechanism, similar to the new forces, except that the parent body of incubation is a large state-owned enterprise.
The so-called "large state-owned enterprises" were strictly defined in the 1990s, that is, three national teams of central enterprises: FAW, Dongfeng and Changan, and three large local state-owned enterprises: SAIC, GAC and BAIC.
Among them, only FAW's approach to new brands is very special, and it does not create independent new brands, but adopts the strategy of "rebuilding red flags" and implements the operation mode of "direct management from headquarters".
At present, there is no goal of external financing and independent listing, which is because FAW owns Hongqi, a unique and home-grown luxury brand. Abandon the red flag and find another way, only then will there be the suspicion of violent things.
Objectively, Hongqi can still be regarded as a new brand, because many of its practices after 2018 are fundamentally different from before. The industry calls it the "new red flag", which makes some sense.
In addition to FAW, Dongfeng's Lantu, Chang'an's Avita, SAIC's Zhiji and Extraordinary, GAC's E'an, and BAIC's Jihu have formed a "group" of state-owned enterprises to incubate new forces.
The preparation and launch time of these brands is basically concentrated in these 3 years, and even the "rebirth" of Hongqi is only more than 3 years from today. The convergence of everyone's choices is obviously not a coincidence, but a strategic action driven by changes in the internal and external environment, balancing the cognition of their own strength and goals.
1
Three external environments
First of all, what is the general environment? Since 2018, China's auto market has started a wave of three consecutive declines. This cannot be called a "pullback", but a recession, but the industry avoids this definition. The increment disappears and the stock begins to suffer. The cake is no longer getting bigger, there are more people competing for food, and the intensity of competition is greatly increased.
The data for 2018 was only known at the beginning of 2019. In fact, car companies do not have to wait until the second year, they have worked hard, struggled and used all their strength to protect market share in this year, and no number can appreciate such a profound.
Secondly, the BBA is soaring, and the luxury car market ignores the market and walks out of the independent market. Moreover, this law is still valid today. Second-tier luxury brands are fighting with each other, and their rankings change back and forth, but neither of them can pose a threat to the BBA.
In this segment, Chinese brands are quite fascinated.
The original "ceiling" of the Chinese brand was 100,000 yuan, and later raised to 200,000 yuan, proving that the ceiling height is also variable, but no brand can make a "luxury attribute".
Some people say that this is a historical accumulation. It's like saying that luxury brands are aristocratic and can't change their pedigree. But in fact, time can only serve as a yardstick for market tests. Luxury brands are just survivors for a while.
Chinese brands consciously grow in strength and begin to seek to establish high-value luxury brands, which is a normal law and conforms to the social trend of consumption upgrading.
Of course, it is not easy to become a luxury brand, and the luxury brand itself is also actively expanding its product line and adopting an offensive strategy. China is forced to fight on the inside and compete with luxury brands to extend their product lines, so that no matter whether they win or lose, they have not seized the strategic initiative.
Third, the birth of new forces actually provides a realistic path for how new brands can lay the luxury property. Although the new powers are far from proving the reliability of their business models, if they wait until the dust settles, the business opportunities will be lost.
The new technologies represented by the "new four modernizations" have developed rapidly, spreading from the Internet to the automobile circle. This is new to everyone in the circle. Multinational brands, on the other hand, have stuck to the old law of value, and their acceptance of new technologies has slowed down.
In fact, historical opportunities never openly announce their arrival, and the signals sent out are vague and plausible, and only when they are caught are they called opportunities.
In the understanding of "opportunities", state-owned enterprises have a convergence of views, that is, they must operate new brands in new ways. Judging the situation is one thing, daring to get started is another.
2
The internal environment requires "aggressiveness"
The opportunity has been seen, how is its own strength?
In the internal environment, state-owned enterprises have relied on joint ventures to become bigger. The result of learning from outsiders is that the supply chain and scale manufacturing, positive research and development have all been passed, and the personnel team has also achieved intergenerational change.
Now, new strategic targets must be sought on existing platforms to keep your business alive and aggressive. You can't lie on the joint venture business for the rest of your life, right? Brilliance has done a terrible job autonomously, and although BMW Brilliance's business is still fairly healthy, the result is bankruptcy protection.
Why maintain "aggression"? Like people, moderate "hunger" can make businesses more dynamic and healthier. After the enterprise becomes larger, the internal management structure becomes more and more complex, and the result of the process is to cope with the immediate matter. In order to avoid the disease of big business, it is necessary to start a new stove.
The six state-owned enterprises have all seen that they have taken the opportunity to create new brands to maintain sensitivity to new technologies, reduce the cost of landing new technologies, and try short product lines. The key is to focus on creating a high value of the brand, extending the product line to the high end, burning the flames of war into the camp of the opponent, and challenging multinational brands.
To do this, it is necessary to scale down and think, operate and develop in the same way that startups do. If it is done, the entire group will implement a strategic transformation, with a smaller scale and fewer command levels, and prioritize the deployment of resources at both ends of the smile curve to increase the brand value of the enterprise.
The new brands owned by these six state-owned enterprises have roughly the same starting point, but they still go their separate ways. The final referee is, of course, the market, but we can touch the similarities and differences in their business models and operational ideas through a multi-dimensional perspective.
Let's define "extremely compliant" and "seriously non-conforming" as ★★★★★ and ☆, respectively.
It should be noted that this is not a level of judging good or bad, but only to show that they differ from each other. We do not know what kind of new formats can go further, only hope that their successful path can be copied, and the characteristics of labeling will become a reference for retrospection.
3
Judgment of the dimension of independence
This dimension is a measure of the degree to which a new brand operates independently.
FAW Hongqi is directly managed by the group headquarters and operates as the number one brand of the group, which is different from the business unit structure of Jiefang and Besturn, and its independence is actually ☆.
Dongfeng Lantu, which originated from Dongfeng H Business Department, was established in April 2019, and its mission is to create a new high-end new energy brand. In July 2020, the Lantu brand was released. In June 2021, Lantu established an independent legal person company, with Lu Lai as CEO and officially separated from the business department structure.
From the perspective of financial relations, Lantu does not completely rely on the parent company Dongfeng Company to raise funds. Lu Fang said that he will make extensive use of the capital platform to explore more possibilities. This is actually a hint to take the route of independent financing + listing of start-up enterprises.
However, this is the vision, lantu's current equity structure, jointly funded by Dongfeng Group and lantu automobile core employee shareholding platform, of which core employee shareholding accounts for more than 10%. From the perspective of administrative affiliation and finance, its independence is ★★★. If financing goes well, its independence will be further enhanced.
Avita in Chang'an, the internal code name was "ab project". Changan Automobile's shareholding was diluted from 95% to 39%, CATL held 24% of the shares, the second largest shareholder, Chongqing Cheng'an held 19%, and the remaining shareholders were less than 10%. Tan Benhong, vice president of Changan, is the chairman and CEO of Avita Technology.
Since Chang'an gave up absolute control and clearly followed the external financing route (without mentioning the prospect of listing), its independence is ★★★ ☆.
SAIC's wisdom and extraordinaryness were both invested and established by SAIC Motor.
In December 2020, Zhiji Automobile Was jointly funded by SAIC, Zhangjiang Hi-Tech and Hengxu Capital, and was established with special investment from Alibaba. Wang Xiaoqiu, president of SAIC Motor, is the legal representative with a registered capital of 10 billion yuan, of which SAIC motor invests 5.4 billion yuan, occupying a controlling right, and its independence is ★★★.
Extraordinary Automobile was invested and established by SAIC Motor, formerly known as the R brand project, which belongs to SAIC Passenger Cars. SAIC motor invested 6.65 billion yuan, accounting for 95% of the shares, and employees held 5% of the shares. Extraordinary Auto claims to become an independent brand and carry out market-oriented operations, and explore new models of industrial co-creation. Given its shareholding structure, its independence is ★★ ☆.
GAC Aean will operate independently in 2020 and change its name to "GAC Aean New Energy Automobile Co., Ltd." During the 2021 Guangzhou Auto Show, Gu Huinan, general manager of E-An, revealed: "The employee stock ownership plan is being approved, and it is expected that this step will be completed by the end of 2021. At the same time, given that Aeon is the only new brand that is clearly listed in the 2022 sprint mixed reform, the current independence is ★★★★ ☆.
Jihu is a brand created by BAIC BJEV, BAIC Blue Valley is already a listed company, and BAIC BJEV is a subsidiary of BAIC Blue Valley, so its independence is ★★.
4
Sales comparison: incomplete camp
Market feedback does not equal sales volume per se. The sales figures may seem fair, but they are not. These incubated new brands are at different stages of operation, and it is of little significance to directly compare. We count the full-year 2021 sales figures for each brand, provided that 2021 is the first full year of delivery of the brand's products.
In this way, the only people who meet the conditions for entering the list are Hongqi, Aian and Polar Fox. Lantu's first product, FREE, will begin deliveries in the third quarter of 2021; Avita plans to begin large-scale deliveries in September 2022; Zhiji begins large-scale deliveries in early 2022; and Extraordinary begins deliveries in the second half of 2022.
Hongqi is a mature brand "rebirth", the product line is very rich. Hongqi's sales in 2021 exceeded 300,000 vehicles, an increase of more than 50% year-on-year. It is not easy to achieve such a large increase on this base.
In 2021, EAN's terminal sales reached 123,660 units, an increase of 119% year-on-year, exceeding the annual target of 100,000 vehicles.
It is said that the "internal control target" of The Extreme Fox is to sell 12,000 vehicles in 2021. The latest data from Polar Fox shows that 4993 vehicles will be delivered in actual 2021.
From the perspective of sales volume, the drought death of drought, the death of waterlogging, and the sales of brands with maturity in front are also significantly ahead.
However, the market does not give opportunities generously without restriction. "Lack of core", unfinished channel construction, limited production capacity, consumers will not care about these reasons at all. Brand voice and recognition are the key to sales climbing. The climb curve in the first year or two is not steep enough, and it is difficult to turn over later, not because the window of opportunity is closed.
New brand sales can not rise, there must be something wrong, the product is old, the technical foresight is insufficient, the product positioning is not accurate, the target customer pain points are not solved, and there are congenital or acquired defects in the brand building process. If you don't solve the root cause, just try your luck by pushing another product, the results can be predicted.
For startups, the first mass-produced product must be successful, even if the sales volume is not good or it is really a niche model, it must also expand a higher cognitive range in the market. But then again, why didn't the first mass-produced model choose the volume segment?
Therefore, although the sales volume of new brands does not have absolute reference value, it can also measure the strength and determination of brand building.
5
The technology is forward-looking, and the key is to see the landing
In these years, if the new brand lacks achievements in the "new four modernizations", it will be difficult to get ahead.
The market trend is to take the lead in the preferences of young people, although the younger generation is still lacking in absolute consumption power, but their consumption discourse power is often in the core position in the family. Therefore, intelligent and safety technology has become a must-play card, beyond the focus of endurance, power, comfort, entertainment equipment, health devices and so on.
Before 2019, these performances were generally valued by customers. Although the penetration rate of new energy vehicles has just crossed the threshold of 20% in November 2021, the traction for product and brand value has surpassed that of traditional markets.
Red flags are not exempt. Recently announced the successful development of the next generation of advanced electrification, intelligent vehicle platforms - HEi2.0 and 300 kW electric drives, a new electrical and electronic architecture technology, and an interactive experience platform called "Qikai 2.0".
At the same time, the way the red flag is played is actually a bit atypical. While emphasizing the "new four modernizations", it is also vigorously carrying out luxury upgrades. For example, Hongqi L5 flagship series, Hongqi's newly launched S9 supercar, these products are not in volume, but can establish a high-end brand image.
Because Hongqi has inherent luxury attributes, it can choose both routes. This practice is difficult for other brands to replicate.
Lan Tu took the lead in grasping the pain point of electric vehicles "endurance", the first product FREE push is the extended range electric, that is, the 1.5T inline four-cylinder turbo engine + dual motor power combination. There are fewer range products on the market, and the more typical one is the ideal ONE, 1.2T engine + dual motor (there is a saying that "three motors", inaccurate, the system will be the generator and the motor confused).
From product equipment to endurance, Landu FREE is more sincere than the ideal ONE. Ideal ONE sales are good, Lantu as a latecomer, must be in the performance competition to press a head, in order to seize the market.
Lantu is proud of ESSA's native electrical and electronic architecture, 5G vehicle cloud collaboration, L2+ assisted driving capabilities, full-scene automatic parking and the first "smoke-free, fire-free, non-explosive" electric mass production vehicle.
The Dreamer MPV launched by Lando in the fall of 2021 is surprising because the performance and price are outstanding. The sudden entry into the relatively niche MPV market is also surprising. The idea of Lantu trying to establish a high-end image and create an asymmetrical competitive advantage is about to come out.
Changan's Avita has not yet officially released its products, and there is less information at present, but Avita executives emphasize that its brand tone is "high-end luxury, warm and considerate, and futuristic". This means that while taking the technology route, there may be some elite tone in product details and marketing methods.
Huawei is Avita's technology partner, and the upcoming Avita 11 is expected to feature high computing power, intelligent networking, and hyper-perception capabilities. Avita executives claimed that they would completely subvert the traditional electrical and electronic architecture, and that the central converged computing would be applied "very thoroughly.". Such a bold statement makes people look forward to Avita products.
GAC Aeon's operation is very stable, first there is technical preparation, and then there are products, sales climb after the beginning of independence, until the formation of a separate operation of the start-up company, the development of the vein is very clear.
Aeon's battery technology (magazine battery) and sponge silicon anode plate technology are striking. The latter supports AION LX models with a range of more than 1000 km. In August 2021, Aeon released a 6C magnification supercharge pile (charging 5 minutes, 200 kilometers of range), and in terms of intelligent software, the relative sense of presence is weaker than "Wei Xiaoli", which may be due to cautious deployment.
In the eyes of the outside world, Eian will focus on the basic point of the technology tree on the "three electricity" technology.
BEIQI Jihu is the most active and radical brand in promoting intelligence, not only taking the lead in using lidar in perception, but also partially using Huawei HI technology on the computing platform. Although it is not used in the full set, the test video of its self-driving is still very impressive.
Polar Fox is also one of the few willing to upgrade Huawei's intelligent technology to the point of bundling the vehicle brand, and the current effect is not too good in terms of sales and market feedback. But from the perspective of technical practice, the boldness of the polar fox is very rare.
State-owned enterprises incubate new brands, not test fields, from less than a billion yuan to billions of yuan. With such a large investment, even for large state-owned enterprises, the financial pressure is also very large.
Therefore, most of them hope that the investment is staged, and after passing the most difficult entrepreneurial stage, it is necessary to carry out external financing and even IPO in a timely manner to share short- and medium-term expenditures. But the bulk of the risk always belongs to the lead entrepreneur, that is, the state-owned enterprise itself.
Fortunately, they all did it without hesitation.
In a few years, the second wave of technology companies investing in electric vehicle companies, survivors of new forces and new brands incubated by state-owned enterprises will compete together in the new market.
In the traditional market, as the penetration rate of new energy vehicles gradually increases, the sound wave will continue to decline. The conversion process takes years, but the opportunities that belong to every business are only a short period of time. The incubation itself retains hope to obtain a pass to the entrance to the new world.
【Copyright Notice】
This article is the original manuscript of Automan Media
Unauthorized reproduction is not permitted
▼