While "entering the city" while "going to the sea", Nezha Automobile will break through the double line in 2022

The new car-making enterprises are still continuing to stage a tug-of-war of delivery "qualifying", of which the competition in the second echelon after "Wei Xiaoli (Weilai, Ideal, Xiaopeng)" is the most anxious, including several enterprises such as Nezha, Zero Run, and Weima. As a member of the second echelon, Nezha Automobile showed some momentum of attacking the first echelon after a period of competition.

According to the latest February delivery data released by the new car-making forces, the delivery volume of Nezha Automobile in February was 7117 vehicles, ranking second among the new car companies. In November and December last year, Nezha Automobile delivered more than 10,000 yuan for two consecutive months, which was comparable to Weilai Automobile.

Time to 2022, Nezha Automobile began to think about how to further stabilize the first echelon, and from the previous low-end positioning to the high-end positioning to promote. This is a new challenge for Nezha Automobile, which comes from the sinking market, where opportunities and pressure coexist.

On March 2, Nezha Automobile revealed its 2022 development plan at a media communication meeting. Zhang Honghan, public relations director of Nezha Automobile's brand, said that Nezha Automobile's work priorities in 2022 are "going to the city" and "going to the sea".

According to Zhang Honghan, the so-called "going to the city" is the transfer of the target market from the non-urban area to the urban area, which contains multi-layered meanings such as product up, brand up, and target market up. "We must not only enter the core city in the geographical sense, but also enter the mentality of the mainstream consumer population in the core city, and enter the core camp of the intelligent track."

According to the statistics provided by Nezha Automobile, in 2021, among the users of Nezha Automobile, the proportion of users from first-tier, new first-tier and second-tier cities has increased to about 64%. Coupled with the Nezha S, the first model of the Shanhai platform that the company strives to build in 2022, and the company's advance layout in terms of technology, products, services, channels, talents, etc., Nezha Automobile will vigorously enter the first- and second-tier markets.

As a representative enterprise of "traditional car companies" in the new car-making forces, Nezha Automobile has previously mainly developed in the sinking market of the third, fourth and fifth lines. According to public information, the starting price of Nezha Automobile's previous products is below 150,000 yuan, especially the main sales model Nezha V series, which is priced at about 70,000 yuan. In the sales structure in 2021, the A0-class SUV Nezha V series delivered a total of 49,646 units, accounting for 71% of the total sales of the year, and the car became the top pure electric SUV sales champion of the new force in 2021 with its cost-effective advantage.

In other words, a very important external factor for the rapid sales growth of Nezha Automobile is that it has stepped on the rise of the A0-level pure electricity market. It is reported that in 2021, the sales volume of the national A0-level pure electricity market increased by 296% year-on-year, ranking first in all levels, and the share proportion rose from 10.1% in 2020 to 14.9%.

However, if Nezha wants to occupy the market of first- and second-tier cities, it means that it must compete head-on with the "Wei Xiaoli" who is already in the city. Relying on low-priced A0-class models, it is obviously difficult to produce stronger competitiveness. Nezha Automobile can only achieve its goal by continuously developing upwards. Moreover, this year's new energy vehicle market has encountered large-scale cost upward pressure due to chip shortages and raw material shortages, and A0-class cars with low prices are in the torment of price increases, that is, slow sales.

Nezha Automobile urgently needs to win the mountain in the high-end market. During the Guangzhou Auto Show in November last year, Nezha Automobile released the first pure electric sedan Nezha S, which is positioned as a B-class car, and its competitors include Model 3, Xiaopeng P7, BYD Han EV and other mid-to-high-end electric vehicle products. According to Zhang Honghan, Nezha S will open pre-sale at the Beijing Auto Show in April and be officially delivered in the fourth quarter of 2022. So, can Nezha Car have a chance to break through?

"According to the forecast data we got at the National Information Center, the B-class pure electric car market will have a continuous growth, with an average compound growth rate of about 17% before 2030. That is, by 2030, the capacity of this single pure electric car segment is about 3 million, so Nezha S is facing an incremental competitive market. A Nezha car insider said.

In the face of many fierce enemies, Nezha Automobile's more meticulous strategy is to find "blank spots" in the market segment. "If the crowd is divided into ten subdivisions with two dimensions: values (ease, enterprising, control, leadership, stimulation) and social class (mainly income). We found that there are some users who do not have a model to touch at present, they are relatively middle income, values are more aggressive, our Nezha S is specially tailored for these users. This is an opportunity for our future. The above insider analysis believes.

From the product level, Nezha S has a lot of mainstream smart electric vehicle technology on the market. In terms of pricing, according to the different positioning of Nezha S and Model 3, Xiaopeng P7, and BYD Han EV in the consumer population, the industry expects that the starting price of the car will be between 150,000 and 200,000, similar to or slightly lower than Adhan EV. Price will remain an important competitive advantage for Nezha S.

In addition to the heavy responsibility of achieving upward mobility on the product side and the market side, Nezha Automobile also hopes to go overseas and carry out a global layout. From the perspective of the market situation of China's new energy vehicle exports, the number of new energy vehicle exports in 2021 reached 310,000 units, an increase of 3 times year-on-year, exceeding the total export volume in the past few years. At this stage, going overseas has become a good new business opportunity for domestic new energy vehicles.

Nezha Automobile's choice of export strategy is "first go south to Southeast Asia, and then go west to Europe". Previously, Enterprises such as Weilai and Xiaopeng used Europe as their export launch location. This may be another differentiated way of playing for Nezha.

It is understood that Nezha has made preliminary preparations for export to Southeast Asia. Previously, in November 2021, Nezha Automobile signed a strategic cooperation framework agreement with Thai National Petroleum Co., Ltd., and the two sides formally established a long-term win-win cooperative relationship.

"In December last year, we already debuted the Nezha v right-hand drive model at the ASEAN Expo held in Nanning, and in March we will have a more specific landing project, that is, Nezha Automobile debuted at the Thailand Auto Show, which is also the substantive action of Nezha Automobile brand to officially enter the Thai market." Zhang Honghan said.

In addition, Nezha Automobile has also set up a European business unit within the company, planning to use the European market as the next overseas position.

Economic Observation Network reporter Wang Shuaiguo

Editor/Fan Hongwei