Recently, according to a number of media reports, Acura is about to withdraw from the Chinese market due to sluggish market performance. At present, although Guangqi Honda has not issued any official statement on this matter, combined with Acura's situation in China, this rumor is not empty.
Product strategy mistakes have caused Acura to be deeply trapped in China
Among the second-tier luxury brands, Acura is not late to enter China. According to the data, as early as 2006, Acura sounded the clarion call to enter the Chinese market, when it introduced three cars of ILX, TLX and RLX and three SUVs of RDX, MDX and ZDX in an imported manner, but due to the low brand awareness, there has been no volume. It was not until 2016 that Acura settled in Guangqi Honda and really began to "take root" in the Chinese market.
Acura CDX, image source: ACS Acura
Acura's first model after domestic production is CDX, which is a product tailored by GAC Acura for Chinese consumers, in other words, a "special car" for the Chinese market. For the general multinational car companies, in order to quickly open the market after entering the Chinese market, they often take the lead in introducing their well-known global models, and the positioning is above medium-sized. As a compact SUV, and acura CDX is Acura's "special supply car" for the Chinese market, it has not opened up much gap with Honda's products in China in terms of product positioning and configuration, and this product strategy mistake is doomed to make the road after Acura domestic production will not be smooth.
According to the data, acura CDX achieved sales of 13,000 units in 2017 only in the year of entry into the market, and has been declining since then, with sales of only 2,810 vehicles last year. After the failure of Acura CDX, GAC Acura introduced the second SUV model Acura RDX, which is significantly higher than CDX in positioning, and is Acura's mature model overseas, however, because GAC Acura only entered the domestic market at the end of 2018, missing the best period for the rapid rise of the luxury SUV market, coupled with the inherent impression left by CDX to consumers in a short period of time, so the sales of RDX after domestic production are still not good.
Prior to the RDX, GAC Acura also introduced a mid-size sedan, the TLX-L. The model was only on the market for two years before it was discontinued due to poor sales, and its two-year sales were less than 3,000 units. Under the pressure of the market, after 2020, Acura has stopped the import car business and the car business in China, and only retained the production and sales of two SUV products.
Industry insiders pointed out that Acura is facing the embarrassing situation of withdrawing from the Chinese market in five years, which has a lot to do with the mistakes of its product strategy. At the same time, the brand positioning of GAC Acura is also relatively vague, and it has not formed its own unique brand label. According to domestic media reports, due to the small number of GAC Acura products and a low sales base, it has been sold on the grid with GAC Honda, which will undoubtedly make its positioning more ambiguous, and in the long run, it will only be more and more unfavorable to the development of the Acura brand.
Acura's situation is not unique among second-tier luxury brands
Acura's current development dilemma is not an isolated case in the domestic second-tier luxury car market. Among them, Infiniti, which is also a Japanese luxury brand, has been called "difficult brother" in the domestic second-tier luxury car market by the industry together with Acura.
Tracing the development history of Infiniti in China, it also entered the Chinese market in 2006, but the domestic production time was earlier than Acura, and it achieved domestic production in 2014. After domestic production, Infiniti has introduced two models, Q50L and QX50, and there was a brief highlight moment in the first two years after domestic production, and since 2017, Infiniti has gone downhill in China. Because no new models have joined, its sales continue to decline, and dealers in many places have put forward the demand of "withdrawing from the network". Earlier this year, Infiniti, which has been in a difficult position for a long time, announced that it would be included in dongfeng Nissan's management system as an independent business headquarters. This also means that Infiniti will lose more autonomy in brand operation and management in the Chinese market.
Infiniti Q50L, image source: Dongfeng Infiniti
Infiniti after the domestic production of the reason for the business difficulties, the reason behind the Acura has similarities, there are differences, similarities such as the two domestic models are relatively small, and due to the sluggish sales are more unable to market, resulting in a marketing rhythm disconnection, so that the brand is always limited to the "niche" field; the difference is manifested in that the core reason for Acura's mistakes in China is that the core reason for Acura's mistakes in China is that the product strategy is disconnected from market demand, and the main performance of Infiniti's mistakes is that the pace of product advancement is too slow. Eventually lost the initiative in the market.
In addition to Infiniti, there is another brand in the second-tier luxury car market that is not favored by most people in the industry, that is, Genissy.
As a high-end brand of Hyundai Motor, Genises was officially announced to enter China in April last year after being renamed by Genesis. Of course, this is not the first time that Denises has entered the Chinese market, as early as 2014, Genesis was introduced into domestic sales by Hyundai Motor, but it returned in 2016 due to "water as unsuitable". Today, after The Genesis transformed into Genises, it intends to seize the opportunity of the upgrading of consumer demand in the Chinese auto market and the transformation to electrification and once again attack the Chinese luxury car market.
Since landing in the Chinese market in April last year, Genises has been rapid in the promotion of products and channels, such as its successive launch of GV80, G80 and G70 models, and in a short period of time in Shanghai and Chengdu set up Geniseys Center, Jenises Home. However, the enthusiasm of Genises in China has been poured cold water on the epidemic and lack of cores that have swept the world, and public data shows that the total delivery of Geniseses in half a year in China is less than 100 vehicles, which makes many people in the industry say that they "can't see the signs of Growth of Geniseys in China's luxury car market".
Geniseith G80, Image source: Geniseth
A senior analyst in the industry pointed out that from the product point of view, although the three models of Genisesy in China do not have obvious shortcomings, they have no significant advantages compared with the second-tier luxury car products such as Cadillac and Lexus, and because its brand positioning is more "niche", the brand characteristics are not obvious, and it is difficult for consumers to include them in the scope of purchase when purchasing luxury car products. In the long run, It is only a matter of time before Genissee retraces the "old road" of Infiniti and Acura in China.
It is important for weak luxury brands to find their proper positioning
In the context of the upgrading of consumer demand, China's luxury car market has seen rapid growth in the past decade, even if the domestic passenger car market entered a stage of slow growth and negative growth after 2018, the growth rate of the luxury car market can still outperform the market. The improvement of the Chinese market has prompted many second-tier luxury car brands to target the Chinese market again, in the past decade, some luxury brands announced domestic production, such as Jaguar Land Rover, Infiniti, Acura, etc.; some announced "secondary entry into China", such as Lincoln, Genissy and so on. For some brands, because their brand positioning is more distinct, they have a certain brand awareness and fan base before entering China, so they have developed better after domestic production, such as Volvo, Lincoln and so on. There are also some luxury brands, although they have not joined the ranks of domestic production, but the personalized color of their brands and products is also more distinct, and the identity of imported cars at this time is precisely the endorsement of their high-quality quality and service, so it is also recognized by domestic consumers, such as Lexus, Porsche, etc. Acura, Infiniti, and even the second return of Jenisses, due to the vague brand positioning, the product and the high-end products of the business owner brand overlap and fell into development difficulties.
Analysts at the Gaz Automotive Research Institute pointed out that second-tier weak luxury brands that want to regain their vitality in the Chinese market must work brands and products, and in both aspects, they must form a significant distinction from the main brand of the car company, and also increase the pace of transformation to electrification. It is undeniable that with the acceleration of new energy vehicles to replace traditional fuel vehicles, the pattern of the luxury car market is being reshaped. Taking the 2021 luxury brand sales ranking in China as an example, the brands that enter the top of the list are not only BBA, but also Tesla, and Tesla is second only to BBA in the ranking, becoming the "bellwether" of second-tier luxury brands.
Similarly, in the domestic market, NIO and Ideal are taking the luxury brand route in the field of electric vehicles, with deliveries exceeding 90,000 units in the whole year last year, which is close to Jaguar Land Rover, Porsche and Lincoln in the traditional luxury car market. From this point of view, with the increase in the penetration rate of new energy vehicles in China's passenger car market, the new power brands that take the luxury car route will take a large part of the traditional luxury car market.
In view of the current situation, traditional luxury brands are also accelerating the transformation to the field of electrification, in addition to BBA, volvo, Lexus, Cadillac and other products in the second-tier luxury car market have products involved in the field of electric vehicles, while the second-tier weak luxury brands dragged down by sales and operating capabilities are also lagging behind in the layout of electrified models. However, Geniseith has now embarked on the promotion of pure electric vehicle models. At last year's Guangzhou Auto Show, Genises released the pure electric GV70, and before that, it also released the G80 pure electric version at the Shanghai Auto Show. However, in the next competitive track, how should second-tier weak luxury brands remain competitive in products and technologies in the face of the attack of new and old forces?