Source: Stills from Fast and Furious 6
"Does China need a new car brand?" If I remember correctly, the first person to throw up this question was Qoros. Since then, when many new brands come out, they will inevitably encounter the same torture as Qoros.
Since the birth of a large number of new car companies, the automotive circle has intensified, although after a few years, most of the brands are either "lingering" or "disappearing", but also achieved a number of new brands like Wei Xiaoli.
Geely and Chery, which had folded on the path of "having more children and fighting", have returned to the multi-brand strategy in recent years; Great Wall Motors has long been no longer the original focus on SUVs and pickup truck models, and has now formed a six-brand matrix and blossomed at more points; and SAIC Motor Group has independently separated the original R brand after incubating Zhiji Automobile and established Feifan Automobile.
Behind the actions of several major Chinese car companies, there seems to be a consensus - on the track of smart electric vehicles, they have chosen to continuously divest sub-brands or cooperate with third parties to incubate multiple new brands, broaden financing channels, and try to occupy the fast-growing new energy vehicle market.
If a decade ago, people blamed the failure of the multi-brand strategy on "the market is not ready", will they lose this wave of multi-brand strategy?
#01
Fei Fan and Zhi Ji: Left and right fighting each other?
The core of the reason why car companies derive new brands is that the core value of different brands is different, the target consumer groups are different, and the product design concepts and style characteristics behind each brand are different.
For example, Zhiji Automobile is a new smart electric vehicle brand set up by SAIC Zaichong high-end, introducing external strategic investment from Pudong and Ali, focusing on more than 400,000 yuan of space, and has just recently delivered 200 Zhiji L7s in a small scale.
However, just when Zhiji had not yet established a stable market, SAIC hurriedly launched Feifan Automobile, positioning itself in the field of high-end new energy intelligence, allowing the two brands to jointly seize the track.
According to the data of the China Passenger Car Market Information Association, the penetration rate of the new energy vehicle market in 2021 has increased to 14.8%, and the penetration rate in February this year has reached 21.8%. A number of industry experts predict that China's new energy vehicle market will usher in a steep "growth curve" in 2022.
"In the period of great change, if an aircraft carrier wants to transform, it must send several advance troops to trial and error, and the purpose of multi-brand is also to quickly occupy the market, and whoever runs out wins." Automotive industry analyst Zhou Ping (pseudonym) said.
Although a multi-brand strategy can increase the probability of winning, if the brand differentiation is not obvious, it is likely to become an embarrassing situation for left and right hands.
According to an industry insider close to the Zhiji car project, "Zhiji will launch smaller SUVs and cars next year, with a price range of between 300,000 and 350,000 yuan." "While Feifan is mainly attacking the range of 200,000-400,000 yuan, the two sides still have a certain overlap in positioning differentiation."
In fact, the newly established Feifan Automobile is a renamed brand of R Automobile, that is, a new energy sub-brand under the Roewe brand. "From the very beginning, SAIC motor did not make a systematic strategic plan for Feifan in the strict sense, and with the independence of Zhiji Automobile, the group also looked at the R brand while walking and then made decisions." Wang Le (pseudonym), another insider close to SAIC's passenger car project, told Auto Market Monogatari.
According to Wang Le, the independent Feifan car is also a helpless move. Before R Car was independent, the overall expenditure cost was beyond the scope of the Roewe brand, and the marketing investment alone was as high as 1.5 billion yuan in 2021, but this did not exchange for the actual output benefit.
According to the data of the Association of Passenger Transport associations, the MARVEL R sold 7865 vehicles in 2021, which is not ideal, and the ER6, which bears the flagship title of "the only 620 km ultra-long endurance in the same class and 200 km of 15 minutes of charging", has sales in its early 10,000s.
R Auto's performance will drag down the various evaluations of SAIC Passenger Cars, and it will be renamed Feifan Auto Independent, which can control financial losses within a certain range of affordability. The introduction of external capital after independence will bring a certain imagination space to Feifan Automobile.
Although the two brands have maintained independence, they lack synergy in resources.
This "inner volume" is the first to be reflected in talent recruitment. According to the car market story, the overall "talent pool" is insufficient, which will force some car companies to sign non-compete agreements with employees, and when the talents cannot be retained, the company will launch non-compete restrictions, in order to prevent competitors from having the opportunity to get them. In the list of saic group's non-compete agreements, Zhiji Automobile is actually listed.
A departing Feifan employee once expressed his dissatisfaction, "We don't need to use the plan for our own use, or we have already done it, we want to do better, even the suppliers, are more energetic on the wisdom of themselves, SAIC passenger car project to give way." ”
In the key resource of autonomous driving data, Zhiji and Feifan are not working together to roll more and more data, but belong to "independent policies". According to Wu Bing, "R7's intelligent driving is completely co-created by the intelligent driving team of SAIC Technology Center, and Zhiji is more in cooperation with Momenta." However, in Wu Bing's view, this is also the separation point between the two brands.
Flying R7
"Whether car companies can successfully promote multiple high-end brands depends on rational decisions such as their own development strategy and strength, otherwise it is useless to launch more new brands, and the effect may not be as good as always focusing on one brand." Zhou Ping said.
#02
From "Return to a Brand" to "Fission"
If the multi-brand strategy does not have obvious differences in product positioning, technical support, and brand culture, then there may be internal friction between brands, which is a lesson that is not uncommon in the era of fuel vehicles.
The first to start laying the idea of "having more children and fighting" was Yin Tongyue. Chery Automobile launched Kerry, Chery, Weilin and Ruiqi in the early years; subsequently, Geely's three sub-brands of Global Eagle, Emgrand and Shanghai England have appeared one after another; even Zotye Automobile, whose technical strength is obviously inferior, has also incubated brands such as Hanteng and Junma.
The reason for this is not only that enterprises want to revitalize their multiple bases and activate their various teams, but also the background is that at that time, China's automobile market (fuel vehicles) was in a period of rapid growth, and the new consumer demand needed to be met by different brands, while carrying the dream of Chinese auto manufacturers to impact the high-end.
However, two or three years later, Chery and Geely both found that due to the distraction of too much energy and resources, both of them had a more obvious decline in terms of overall sales and group profitability.
When reflecting on cheryto's brand strategy mistakes, Yin Tongyue admitted that he was "not calm enough, made the mistake of greed for perfection and eagerness, and pursued speed and sales too much."
It's just that compared to Chery, Jili is more fortunate, and he strengthens himself through "snake swallowing elephants", and in this four-way attack, he finds a more suitable route through trial and error.
After the Emgrand EC7, which An Conghui was responsible for, gained market recognition, Geely quickly straightened it out, and only later did Geely rise on fuel vehicles (first cars, then SUVs) and enter the head camp of independent brands.
This style of play gave Gilly a taste of sweetness. For Chinese car companies, the window period of the market is only a few short years, and it is in a limited stage in terms of its own technology, resources, management, etc., and it is a good way to launch a multi-brand to seize the market.
The same is true for today's smart electric vehicles, the market demand is huge, everyone needs to find opportunities, so try a new brand, it is not impossible.
Geely, which chose to "return to a brand" at that time, is no longer "breaking away" and has returned to the road of multi-brand development. Since Geely's independence of Polestar from Volvo in 2017, Geely established Geometry Auto and Geely Daimler Smart Electric Vehicle in 2019, and announced the incubation of the Maple Leaf car brand in 2020.
But geely's electric vehicles are mostly mediocre. As early as 2015, Li Shufu announced the "Blue Geely Action" in a high profile to achieve new energy vehicle sales accounting for more than 90% of Geely's overall sales in 2020. As a result, Geely's new energy vehicle sales have never accounted for more than 10%, accounting for only 2.5% in 2021.
When talking about the failure of the "action," Li Shufu said: "This is not a mistake in strategic direction or a failure in strategic implementation, but that the historical timing is not ripe and external strategic conditions have not been formed. ”
Nowadays, new energy vehicles have entered explosive growth, and the new forces represented by Wei Xiaoli have completed the verification period of 0 to 1, and are now gradually entering a growth period of 1-10. The practice of traditional Chinese car companies is more like trying to enter a growth period of 1-10 while retaining existing assets.
Multi-brand was once regarded by Chinese car companies as a good medicine to strengthen themselves. SAIC motor plans to sell more than 2.7 million new energy vehicles worldwide by 2025. Geely Automobile plans to sell 3.65 million vehicles by 2025, of which smart electric vehicles account for more than 30%, that is, more than 1.09 million.
Geely also adjusted its strategy, launched a new brand of Extreme Kr, and chose a pure electric architecture with a more prominent scale effect in the research and development of pure electric architecture - SEA Haohan Architecture, investing 18 billion yuan in 4 years.
SEA vast platform
One brand can not carry so many products, in order to share the cost, Geely's approach is to let more brands use the SEA architecture, including geometry, Volvo, Lynk & Co, Smart, etc., but also use the technical advantages of SEA and other brands to provide technical support or FOUNDC services, such as Jidu, Foxconn, FF, etc.
However, since the release of Extreme Kr, in just one year, the public opinion storm has never stopped. I can't help but think of a sentence that Li wanted to say, "Any enterprise facing a new productive force and production relations cannot skip the stage from 0 to 1." ”
There are many industry views that if there is no thinking about upgrading, opening a new brand must not be a solution to the problem of existing brand growth.
On the other hand, if some brands have difficulty achieving economies of scale, there is no need to exist as an independent brand.
#03
Relying on the "horse racing mechanism" to get ahead?
"The general trend of the world will be united for a long time, and it will be divided for a long time."
In the transformation of all traditional Chinese car companies, Great Wall Motors was the first to talk about the focus, but under the pressure of selling 4 million vehicles in 2025, it has basically given up "focus", and there are many new brands. Recently, the Great Wall also revealed a brand code-named "BC" on its official website, alongside five other brands.
In these five brands, Euler, Great Wall pickupn new energy, body form dimension has obvious category segments, Haval, Wei brand, tank can be understood as in the SUV market segment, from the price, function and other dimensions after subdivision, the formation of the brand.
Recently, the Great Wall has sold well on brands such as Euler, Great Wall pickup trucks, and tanks, allowing it to emphasize the concept of "category segmentation" in various publicity. The success of these subdivision brands actually impacts some inherent brand concepts that have history, accumulation and intensification.
"The Mercedes-Benz brand is not necessarily stronger than Tesla in the new era, and the tank brand is not necessarily weaker than Beijing off-road in the new era, and the key is not the logic of the brand itself, but the logic of the market." Industry insiders sighed about this.
However, with the independent development of each brand's business, there may be uncertainties as to whether each brand of Great Wall Motor can still achieve a clear division of each brand as it does now. If you want to dig deeper, Weipai, Salon, Euler, and even the future BC brand will overlap in the field of intelligent electric.
The most worrying thing is that the pace is too fast, blindly carrying out multi-brand operation under the goal of digesting production capacity, it will be easy to fall into the trap of multi-brand development.
At present, on the road of multi-brand strategy, most of China's car companies are walking on thin ice. With the Internet giants represented by Huawei, Ali, and Baidu building cars, the car company's logic of "having more children and fighting" has a taste of "horse racing mechanism".
In addition to the "left-right mutual combat" of Zhiji and Feifan, not long ago, Huawei Xilis was transformed into the M5 of the World of Inquiry. At that time, some insiders believed that Huawei had shifted its focus to the newly listed model M5, and stopping the SF5 was in a sense a timely stop loss.
However, under the pressure of the complaints of the owners of the Sf5 of Xilis, the official had to announce to the outside world that Xilis and Qingjie were independently and parallel as two brands. Nowadays, the two brands coexist, the marketing concept is similar, and how to allocate resources has not yet had a unified statement.
The automobile industry is a typical technology-intensive and capital-intensive asset-heavy manufacturing industry, and the "horse racing mechanism" of the Internet is suitable for the automotive industry? Under the outlet of smart electric vehicles, it is difficult to draw a clear conclusion, but public data show that in recent years, the bicycle profits of Chinese car companies are declining year by year, and the dispersion of resources is also a risk.
Car companies want to develop, and it is normal to encounter problems and solve problems in the process of change. Intelligent electric vehicles are the product of rapid growth, and car companies often encounter a shortage of outstanding talents whose organizational structure system is not perfect and have undergone certain run-ins in the process of change.
If the main brand of the car company still has many pits to fill, rushing to open a new battlefield, it may not only be impossible to fight the brand awareness, but also easy to "lose the lady and fold the soldiers".
End
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