Written by / Hong Hanqi
Edited / Mao Shiyang
Euler "stopped production" doubts
After nearly ten days of fermentation of "black cats and white cats suspected of stopping production", the Great Wall Euler began to sit still.
Late on the night of February 23, Dong Yudong, CEO of Great Wall Motor's Euler brand, responded in a post on the Ora APP, saying that the black cat and white cat models "stopped taking orders, not stopped production."
Previously, some consumers said that they were told by the staff of Euler dealers that the dealers had received notice from the manufacturer that the order date of Euler black cats and white cats was as of February 14, 2022.
On February 14, the open letter showed that the Euler brand did send a notice to the terminal dealers that the black cat and the white cat stopped taking orders.
This has sparked widespread concern among car owners. In 2021, the Euler brand sold 135,000 vehicles, an increase of 140% year-on-year. Among them, the cumulative sales of black cat and white cat models exceeded 88,000 vehicles in the whole year, accounting for 65% of the total sales of the Euler brand. With the fermentation of the news, the existing Euler owners began to worry about the follow-up maintenance and repair problems, in addition, a "discontinued" car, the retention rate will be greatly reduced.
Today, there are still a large number of consumers waiting in line to wait for the car, and they are beginning to worry about whether the car will be far away. In this regard, Dong Yudong said that the black cat and white cat have not stopped production, and the orders that have been received will continue to be put into production, "We will actively seek raw materials, strive for the greatest resources, and quickly realize the delivery of existing orders." "And promise to the user that after stopping receiving orders, all after-sales services of black cats and white cats will continue to be maintained and will not be affected by this."
As for why he stopped taking orders, Dong Yudong said that this was "a helpless move in the environment of lack of core and less electricity."
"At present, the cumulative number of orders for black cats and white cats to be delivered to users has exceeded 20,000 units, and according to the current production volume, if orders continue to be received, the delivery of new orders will wait until the second half of 2022." Dong Yudong said.
"At present, the black and white cat is mainly the lack of chip supply in ESP, which is a chip shortage problem faced by the automotive industry around the world." Perhaps to calm the user's anxious mood, Dong Yudong revealed that last week, three Great Wall executives, including chairman Wei Jianjun, had rushed to Shanghai, "We have been on the road of 'urging the core'." ”
For this open letter, users who queued up to wait for the car reacted differently.
"According to the saying that new orders must be scheduled to the second half of the year, which means that the first half of the year can be delivered one after another." One Euler user reasoned so.
But more Euler prospective owners have lost patience. In the comment area of this open letter, some users questioned why the higher price Euler good cat model can be delivered on schedule in the market environment of "lack of core and less electricity".
On the black cat complaint platform, nearly 100 Euler black cat owners launched a collective complaint, saying that Great Wall Motors did not deliver the model on time, and it was suspected that there was a phenomenon of cutting in line to deliver.
Collective complaint users said that the 4S store originally promised car owners to pick up the car for 2-3 months, but many black cat owners who were ordered in October still could not pick up the car after 4 months. They also questioned the transparency of euler's billing, saying that "many November bookings in Guangdong have been delivered ahead of schedule in early January."
In this regard, Dong Yudong explained that the priority supply is not the CHIP model with chip shortage, "The order delivered in advance after October is actually the ABS+EPD configuration model. ”
Black cats and white cats do not make money
In fact, even if the Euler brand side questions the outside world about "soldiers will block", from a long-term point of view, Euler is indeed adjusting the positioning of the two products. Although the black cat and white cat still account for the bulk of the sales volume of the Euler brand, whether it is the proportion of sales or profitability, black cats and white cats are in an embarrassing situation.
Entering 2022, the presence of Euler black cats has decreased significantly. According to public data, the sales volume of the Euler brand in January was 13,229 units, an increase of 28.9% year-on-year. Among them, euler good cat sales in January were 9020 units, an increase of 333.4% year-on-year. In contrast, according to the data of the Association, euler black cats sold 3891 units in January, while the white cat model sold only 318 vehicles.
In addition, the car brought huge losses to the company. Dong Yudong admitted, "Taking black cats as an example, after the price of raw materials rose in 2022, black cats lost more than 10,000 yuan per unit. ”
Therefore, in the view of the above-mentioned users, this is not a small number of orders for black cat models, but due to limited production capacity, which restricts sales growth. They believe that this is Euler's limited materials, priority supply to the bicycle more profitable good cat model.
In Euler's product line, the black cat pricing range is 59,800 yuan - 102,800 yuan, the white cat is 71,800 yuan - 106,800 yuan, and the good cat price range is 103,800 yuan - 143,800 yuan.
Not only Euler, the shortage of chips and the resulting rising costs have become a common dilemma for enterprises. In this context, car companies produce many products that have become no longer "cost-effective".
In fact, due to the rising cost of power batteries, chips, etc., the A00-class (small and micro) electric vehicle market where black cats and white cats are located is becoming commercially difficult to maintain.
Due to the decline in subsidies, coupled with the rise in the price of raw materials upstream of lithium batteries, the price of power batteries in Euler's segment generally rose by more than 3,000 yuan. In addition, the increase in the total number of new energy vehicles, the previous income that can be obtained through new energy credit trading, may also decline. It is understood that a single new energy credit can be sold for more than 2,000 yuan, and now it has dropped to less than 1,000 yuan.
These have further squeezed the living space of low-cost products. In fact, the price range of Euler's A00-class products is already higher than that of the industry, and the price range of the star model Wuling Hongguang MINI EV is only 30,000 to 50,000 yuan. From the perspective of the industry, the products in the A00 market have been more in the loss.
"Since 2020, automotive industry companies have been plagued by chip shortages, and in 2021, they are deeply aware of the pain of 'core', and many domestic and foreign auto companies have reduced production or stopped production for a short time." At the press conference on the development of the automobile industry in 2021 held by the Ministry of Industry and Information Technology in January this year, Wang Weiming, director of the First Department of Equipment Industry of the Ministry of Industry and Information Technology, said so.
Under the shortage of chip supply, many car companies have begun to test the waters of "reduced distribution and delivery", or use suppliers to replace chips to ensure production capacity to consolidate market share.
In October 2021, Ideal Auto took the lead in proposing a "reduced delivery" pick-up plan, saying that due to the serious shortage of millimeter-wave radar chips, for users who were originally scheduled to deliver vehicles from October to November of this year, they can choose 3 radar versions (the original version is 5 radars), and will make up the remaining radar in the future. If the user does not select the reduced version of the model, the pick-up time needs to be postponed to December of the same year.
Since then, Xiaopeng Motors, Mercedes-Benz, Tesla, and SAIC Volkswagen have also been caught in the storm of vehicle allocation reduction, all of which point to the lack of chip supply.
According to the "Auto Chip Case Answers to Reporters' Questions" issued by the State Administration of Market Regulation, there are individual unscrupulous traders and floating capital groups in China who maliciously snap up chips, hoard and inflate prices, causing the prices of some automotive chips to continue to rise, some up 3-10 times, and some up to 30-40 times.
Entering 2022, the tight supply of chips continues. According to media reports, automotive semiconductor giant Infineon has issued a notice letter to dealers a few days ago, saying that the imbalance between supply and demand of semiconductor production capacity will run through the whole year of 2022, and the company can no longer digest costs under the influence of rising cost structure, and it is said that the intention of price increase is obvious.
However, there are also industry voices that believe that the shortage of chip supply will be alleviated in the second half of this year.
"At present, the world's major chip companies have gradually increased the production and supply of automotive chips, and new production capacity will be released in the second half of this year, and it is expected that the shortage of automotive chip supply will gradually ease in 2022." Wang Weiming said. According to public information, Bosch and Infineon have announced that they will expand investment in 2022 and expand factory production to increase chip production.
Euler Transformation
However, compared with the industry contradiction of chip supply shortage, some insiders believe that the Euler black cat and the white cat are "locked", and the Great Wall Euler is more out of the cost level.
Entering 2022, the shortage of chip supply and the rise in upstream raw material prices have become unavoidable topics in the new energy automobile industry. Under the influence of multiple factors such as the decline in subsidies for new energy vehicles and the increase in the cost of power batteries, the profit margins of new energy vehicles have been diluted. Especially for the low-priced A00-class models, the cost pressure is becoming more and more prominent.
Since the beginning of this year, a number of car companies, including SAIC-GM-Wuling, Xiaopeng Automobile and BYD, have successively raised the prices of their new energy models, and SAIC Roewe brand products will also be adjusted from March 1 this year.
Some new energy vehicle company insiders told the "Finance and Economics" weekly, "The cost pressure is directly transferred to the car price, and consumer acceptance also needs to be considered, especially for low-priced models, three or five thousand yuan, which may account for 10% of the cost of car purchase." ”
In the open letter, Dong Yudong also said that in response to the rise in raw material prices, Euler is "actively looking for ways to improve and developing improvement strategies." ”
In fact, there are also voices that the suspension of the two relatively low-priced models is the Euler brand turning the bow and beginning to make way for the high-end of the brand.
The relevant person in charge of the Euler brand has said that in the future, Euler will mainly focus on products in the price range of 100,000 yuan to 200,000 yuan, and will attack the price range of more than 200,000 yuan. The price range of the black cat and white cat models is between 50,000 yuan and 100,000 yuan.
On the other hand, the Euler brand will launch three new products in 2022, namely ballet cat, punk cat and lightning cat, and the price will be locked in the range of 100,000 yuan to 200,000 yuan.
Behind the transformation of the Euler brand is Great Wall Motors' ambition in the field of new energy.
According to the 2025 strategy previously released by Great Wall Motor, by 2025, Great Wall Motor will achieve global sales of 4 million vehicles, of which 80% will be new energy vehicles. In 2021, Great Wall Motor's new energy vehicle business will have cumulative sales of 137,000 units. This means that Great Wall Motors needs to achieve sales of new energy vehicles from 100,000 to 3 million within 4 years.
To this end, Great Wall Motor has laid out the Euler brand, Wei brand and salon brand as the three major brands of the new energy vehicle business, corresponding to different levels of market segments from low to high.
In the view of industry insiders, increasing the intensity of new energy and intelligent transformation often means huge capital investment, which puts forward higher requirements for the profitability of enterprises. In fact, according to public information, in the next five years, Great Wall Motors' R&D investment alone will reach 100 billion yuan.
However, according to The Great Wall Motor's financial report, in the past six years, from 2016 to the first three quarters of 2021, the company's bicycle gross profit margin showed a fluctuating downward trend, from 24.46% to 16.58%. It can be seen that improving the profitability of its sub-brands has also become the meaning of Great Wall Motor's new energy transformation.
In this regard, Dong Yudong also admitted that from the overall strategy point of view, Euler will pay more and more attention to the waist market of 150,000-200,000 yuan, "rather than entanglement in the bottom market." ”