Produced by | Tiger sniff car group
Author | Wang Xiaoyu
Edit | attentive
Header image | Visual China
China's middle-class families, is it enough for domestic car companies to harvest?
On March 16, Ideal Auto announced the appearance, interior and intelligent configuration of its new car L9. This car is an SUV model positioned as the flagship of home intelligence, and the price range is as high as 450,000-500,000 yuan. Obviously, the new forces are already cutting into the mid-size SUV market of traditional luxury brands with higher sizes and configurations.
But this is not the first time that the new car-making forces have entered the 500,000 yuan price mark. As early as a year ago, the maximum price of the SELF-titled "smart electric flagship car" of Weilai ET7 has exceeded 500,000 yuan, and the subsidy has reached 430,000-510,000 yuan.
Ideal L9
In the past, you had to have a budget of 400,000-500,000 yuan to buy a car, and the first choice was definitely the BBA (Mercedes-Benz, BMW, Audi) executive class sedan 56E (BMW 5 Series, Audi A6L, Mercedes-Benz E-Class), or BBA mid-size SUVs (Mercedes-Benz GLC, BMW X3, Audi Q5L).
And now, Weilai and Ideal have entered the BBA hinterland with a "butcher's knife" with a clear purpose - to harvest a new middle class.
However, are there still so many people in the market who can be knifed?
First, China's luxury car market, monks more meat less
In China, how many Chinese can spend 500,000 yuan to buy a car?
China's typical family of three, with an annual income of between 100,000 yuan and 500,000 yuan, has 400 million people and 140 million families in China, with the ability to buy a car, buy a house, and travel leisurely. According to the National Bureau of Statistics, the middle-income population accounts for about 30% if calculated on a base of 1.4 billion people.
Among them, those who can afford to buy luxury cars are destined to account for only a minority. In 2021, domestic passenger car sales were 21.127 million units, of which domestic luxury car sales were 3.573 million units (including Tesla), accounting for 16.9% of the overall sales of passenger cars.
However, the above sales statistics for luxury cars are relatively general concepts. According to the definition of the association, luxury brands mainly refer to: Mercedes-Benz, BMW, Audi, Cadillac, Jaguar, Land Rover, Tesla and other brands. As we all know, the price of luxury brands has been declining over the years, such as the weighted average price of Mercedes-Benz in 2021 of 464,000 yuan, BMW 409,000 yuan, and Audi 337,000 yuan.
Strictly speaking, if you look at the benchmark line of 500,000 yuan, the market share is even more pitiful. According to the data of the Association, in 2020, the sales volume of models over 500,000 yuan was 997,000 units. The company will increase its number of units to 1.054 million units for the full year of 2021. However, compared with the passenger car market of more than 20 million units in 2021, sales of more than 500,000 yuan account for only 4% of the entire market.
What's even more cruel is that the number of new energy vehicles is even smaller. In 2021, the sales volume of high-end new energy vehicles of luxury brands and new forces was 617,000, of which 465,000 units were sold for pure electric models, accounting for only 2.9% and 2.2% of the domestic passenger car market, respectively.
It is such a niche market, but today's domestic car companies are crazy to pursue. In addition to Weilai ET7 and Ideal L9, there is also The Salon Car, a high-end brand owned by Great Wall Motors, which launched the Salon Mecha Dragon, with a pre-price of up to 488,000 yuan; and BYD's Denza, which is expected to launch a high-end MPV positioning of 500,000 yuan in the near future; and BYD's new high-end brand, which is known as the price range of 500,000-800,000 yuan.
Are there really so many users willing to pay for these products?
Among the angel wheel users of zhiji L7 before, 78% of the users accounted for more than 75%, of which more than 75% had traditional luxury brands represented by BBA, that is, nearly 60% of the users were traditional luxury car owners. At the same time, the average price of bicycles has exceeded 430,000 yuan, and the goal is to replace one of the BBA. "As NIO enters the high-end market and forms an alternative to high-end mainstream luxury fuel vehicles, we should be able to turn the 'BBA' pattern into 'NBA' (NIO in English for NIO)." Qin Lihong, co-founder and president of WEILAI, said.
As a result, they almost all carry the same banner – snatching customers from the BBA. But it is unknown how many users these new cars will have yet to be delivered, and whether they will be able to achieve sustained sales.
Second, Li Bin and Li Xiang are eating BBA meat
However, at this stage of the luxury electric vehicle market, BBA is indeed defeated by Weilai and Ideal.
The most tragic is Audi, its first pure electric SUV Audi e-tron launched in the Chinese market, the guidance price is in the range of 54.68-64.88 million yuan, only 1564 units sold in 2021; Mercedes-Benz EQC guidance price is 49.98-6228 million yuan, 2021 annual sales of 6,098 units; slightly better is BMW, BMW iX3 guidance price of 39.99-43.99 million yuan, last year sold 22,446 units. However, the actual price of iX3 in China is basically reduced by 50,000 yuan, that is to say, the price of its top terminal is not even 400,000 yuan.
On the one hand, the traditional luxury brand of more than 500,000 yuan or even lower electric vehicles in the Chinese market cold; on the other hand, the new forces of Chinese car manufacturing with higher prices have been recognized by users. NIO's sales volume in 2021 is 91,429 units, of which the ES8, which is priced at 468,000-611,000 yuan after subsidies, is more than 10,000 units. At the same time, despite being a range extender electric vehicle, 90,491 units were sold at an ideal price of 328,000 yuan and 338,000 yuan (the price of the old model was different from the new model). These two brands each account for nearly 15% of the market in the high-end electric vehicle market, which is equivalent to Li Bin and Li Wanting to take away 30% of high-end electric vehicle users.
So why do these people who can afford high-end electric vehicles not choose BBA but buy new brands?
"Why did I give up the 530 to buy ET7", a Hangzhou ES6 owner, ready to replace the BMW 5 series with Weilai ET7, and the reason he gave is also very simple: "ET7 can bring me more freshness, I am still young, I am willing to accept new things." ”
This group of people will have a characteristic: they have the ability to think independently and are not easily affected by the outside world. Because for a long time in the past, Chinese car purchase was based on the family unit, and the advice given by partners and elders directly affected the decision to buy a car. But today, the new middle class with economic independence and cognitive differences will be more inclined to self-awareness and willing to try new brands in the decision-making process of buying a car.
For example, Weilai, on their App, recently began to recruit user pilot groups (OTA function internal testing). There are very many car owners, by listing their professional experience and professional ability, to fight for the seat of the user pilot group. Most of these people work in the Internet industry or the financial industry.
For example, there is an ES8 signature version user, he said: he is ready to buy another ET5, studied software engineering, engaged in fixed asset management in state-owned assets for 9 years; there is also an ES6 owner, working in a robot technology company - unmanned AGV industry; there are also two ES6 owners, who are engaged in the civil aviation industry, and so on. Basically, it is also in line with the user portrait positioning of the new middle class.
Zhiji L7
Zhiji gave this group of users a new label, "Young Kochi Users". In a data they provided to Tiger Sniff, it is shown that among the users who book the L7 angel version, the age is concentrated between 26 and 40 years old, and the proportion of people under 40 years old is more than 72%, and the overall trend is young; most users are mostly engaged in related occupations such as "Internet", "finance" or "art".
This group of users of Weilai and Zhiji is a typical portrait of new middle-class car buyers. Even if the outside world spreads rumors that "Weilai has no future", they have enough reasons to insist on their ideas. And with the older generation of consumers, there is a clear difference.
According to the survey of Big Arithmetic, the standards of traditional and new generation consumers' perception of luxury brands have begun to differ greatly. For example, traditional consumers will pay more attention to the level of market awareness, but the new generation will pay more attention to high-quality experience and advanced technology.
High-quality experience and advanced technology are also the breakthrough points of new power brands.
Now look at the Audi e-tron, Mercedes-Benz EQC and BMW iX3, you will find that they are not far from the new forces in terms of product strength and sense of technology. This is obviously no longer more attractive to new user groups.
Third, the new forces are climbing high, for what?
Compared with fighting in the narrow electric vehicle market, playing "Tianji Horse Racing" with BBA fuel vehicles is where the opportunity lies.
In the 2021 high-end sedan ranking, the BMW 5 Series ranked first with an annual sales of 170,000 units. In the high-end SUV ranking, in addition to the first Tesla Model Y, BMW X3, Audi Q5, Mercedes-Benz GLC occupy the second, third and fourth places respectively. These are all models with annual sales of more than 130,000 units, and they are all C-type sedans and mid-size SUVs. Therefore, Weilai and the ideals have adopted the idea of reducing dimensionality and still choose to start with the simple and crude strategy of "cost performance".
For example, the ideal newly launched large-scale SUV range extender electric vehicle L9, priced in the range of 450,000-500,000 yuan, is almost the price gap area of the BBA medium-sized SUV and the medium-sized SUV, such as the Mercedes-Benz GLC priced between 40.25-47.12 million, while the Mercedes-Benz GLE is in the range of 69.98-88.03 million, and the middle 500,000 yuan gear is empty. This is similar on BMW and Mercedes-Benz SUVs.
In terms of pricing, the ideal L9 is mainly in the cockpit experience. For example, the current Mercedes-Benz GRC and BMW X3 are only equipped with a standard central control screen and LCD instrument, but the ideal L9 directly gives you a five-screen interaction, a large HUD, a safe driving interactive screen on the steering wheel, and a vehicle central control screen, a co-driver entertainment screen, and a rear cabin entertainment screen (all three screens are 15.7-inch vehicle-level OLED screens). Even the processor of the smart cockpit uses two Qualcomm Snapdragon 8155.
Weilai is slightly blunt in pricing. For example, the Weilai ET7, the pricing is comparable to the BMW 5 Series, the size is also comparable, and even in terms of size and price, BMW is slightly superior. But Weilai put the longboard on performance and intelligence. In addition to the crushing 100-kilometer acceleration performance, NIO announced the domestic ceiling early at the level of autonomous driving hardware - four NVIDIA Orin chips, and established a supercomputing platform with a computing power of up to 1016TOPS for ET7.
NIO ET7
In terms of raising the intelligent driving experience, both companies have no intention of giving in. Both the NIO ET7 and the Ideal L9 are equipped with a lidar. The NIO E7 uses ultra-long-range lidar from Innovusion, which has a 120-degree ultra-wide viewing angle and can detect up to 500 meters. The ideal L9 uses Hesai Technology AT128 semi-solid-state lidar, laser beam 128 lines, laser wavelength 905 nm, the farthest detection distance of 10% reflectivity is 200 meters, and the horizontal field of view angle is also 120 degrees.
However, with some expensive and no configuration on the new car, but only selling for a relative price, is Weilai and Ideal really just to grab the blank market of the BBA? In fact, it is not difficult to see from the historical sales of Weilai ES8, it is often hundreds of thousands of vehicles per month, which does not pose too much of a threat to the BBA. At that time, ES8, like the CURRENT ET7, the most important task was to set up a flagship brand anchor. In the end, it must be a lower level of products.
This is actually a familiar routine in the industry.
In 1983, Toyota launched a crazy program, flagship 1, to try to build a luxury car that surpassed the best-selling Mercedes-Benz S-Class (W140) and BMW 7 Series (E32) at a price far below them. Finally, after spending 6 years and 1 billion US dollars, Toyota came up with the first generation of Lexus LS400, which caused a sensation in the industry. But the most popular is still the Lexus ES based on camry's "magic reform".
The same is true of Tesla, which was only founded in 2003. Elon Musk relied on the Roadster sports car to seize the rich American market first, and then relied on flagship products such as model S and Model X to occupy the minds of high-end consumers. Then, keep creating new experiences and new technologies. Finally, decentralize these technologies to cheaper models and expand the market size. So we saw the Model 3, which was once the top seller of an A-class sedan in China.
Therefore, Weilai and ideals are re-walking the path that Tesla once walked.
Write at the end
In the book "Innovation Diffusion Theory", there are five categories of "innovative adopters": innovators, early adopters, early majorities, late majorities, and laggards. At present, most of the users of NIO and Ideal are "early adopters" - they are respected social figures and public opinion leaders. Willing to lead the fashion and try new things, but behave cautiously.
The entire new energy vehicle is also like this, and the new middle class of high-end electric vehicles that are sought after is like the "early adopters" in the picture. But then came a chasm that needed to be crossed to get into the "early majority" and usher in a much larger number of users. For the automobile manufacturing industry, the expansion of scale must be driven by the downward exploration of product prices.
Therefore, after the new car-making forces touch the ceiling of the price of 500,000 yuan, they will most likely turn their targets to the low-end market. Ideal Auto has announced that the product should be fully covered at a price of 150,000-500,000 yuan, and 150,000 yuan is a bottom line. Weilai has repeatedly rumored that it will be a low-end brand with a price of more than 150,000. Including Xiaopeng, who broke through with cost performance, he once set a price bottom line of 150,000 yuan for smart cars.
China's high-end middle-class household market certainly cannot withstand several rounds of harvesting. However, the opportunity for a sinking market is always there.