Author | Li Jinglin
No matter how powerful the new power brand is, the success or failure of new energy vehicles still depends on sales.
According to the global new energy brand sales data released by CleanTechnica, BYD ranks second after the giant Tesla, ranking second with a sales volume of 593,900 vehicles and a year-on-year growth rate of more than 220%, and its models within 200,000 yuan, Song and Qin series sales are all around 200,000 vehicles, and the yuan series, E series and dolphins of about 100,000 yuan have also sold more than 100,000 vehicles. From the perspective of models alone, the sales of Wuling Hongguang Mini EV are second only to Tesla Model 3, ranking second with 426452. In contrast, only Xiaopeng squeezed into the top 20 among the new car-making forces, ranking 19th.
The pyramid tip is always a minority, when the high-end route of new cars "good at" enters the growth bottleneck, going to sink the market and connecting with traditional brands is their only choice.
BYD Song | Source: BYD official website
Who is dominating the sinking market
Before combing through the market situation, we must first clarify the concepts of "sinking" and "low-end". The sinking market is a geographical concept, divided by the city where the market is located and the structure of the consumer population, while the low end is defined at the product level, mainly based on price as a measure.
The sinking market is not without high-end models, but the low-end dominates. Whether from the perspective of brand or model, the low-end models of traditional car companies are the absolute protagonists of the vast and decentralized sinking market.
The road to new energy in third- and fourth-tier cities is opened by low-cost mini-vehicles.
Since its listing in 2020, Wuling Hongguang Mini EV has quickly ended the myth of Tesla Model 3 slaughtering domestic new energy vehicle sales. According to the data of Garage 42, from the whole year of 2021 to the first two months, the official starting price of 34,800 yuan of Hongguang Mini EV has been at the top of the sales list. The models in the second and third places in sales are constantly changing, but they have never been able to endanger the top position of Wuling Hongguang.
The person in charge of new energy in the Autohome Information Center previously told Zhentan that the highest sales of new energy vehicles in the country are first-tier cities such as Beijing and Shanghai, as well as southeast coastal areas such as Guangdong and Hainan, followed by low-tier cities in Shandong, Henan and other provinces. In addition, Autohome's big data as of April 2021 shows that Hongguang Mini EV and its competitors have the most users from Henan, Jiangsu, Zhejiang and other provinces.
The success of Hongguang also indicates the broad potential of A00-class micro-electric vehicles. At the end of last year, Chery New Energy launched Chery QQ Ice Cream, laying out a miniature electric vehicle track, and the official price of the three models was in the range of 29,900 yuan to 42,900 yuan, even cheaper than Hongguang. In the face of Wuling Hongguang Mini EV, which occupies an absolute right to speak in the A00-level pure electricity market and has a market share of more than 50%, Bo Siyu, general manager of Chery New Energy, showed his ambition: "Chery QQ Ice Cream and Little Ant in 2022 the sales target is more than 300,000 vehicles. ”
In the first two months of this year, QQ Ice Cream sales were 7517 and 6221 respectively. Micro-electric vehicles have become Chery's main supporting force in the new energy market.
Wuling Hongguang and Chery New Energy occupy the top sales of mini cars, in addition, their main competitors include SAIC Roewe Kelaiwei (official guidance price from 44999 yuan), Changan BenBen E-Star (official guidance price from 29800 yuan), Euler Black Cat (official guidance price from 69800 yuan) and so on. In February this year's pure electricity sales list, the above models also ranked in the top 20.
Wuling Hongguang Mini EV | Image source: Wuling Hongguang official website
However, from the first half of 2021, the mid-range new energy (priced in the range of 100,000-200,000) market began to rise. Xu Haidong, deputy chief engineer of the China Automobile Association, once said that the mid-end consumer market represented by A-class cars is the most difficult to do. The current situation of the market determines that the market in this grade is difficult to do, but it also means that the mid-end products have enough room for development.
According to the no. 42 garage data, in the first two months of this year, BYD Song PLUS New Energy (official guidance price from 145,800 yuan) and BYD Qin PLUS (official guidance price from 111,800 yuan) two models ranked third and fourth in the sales list, and in the second half of last year, these two models were also frequent customers in the top five sales.
On the whole, the sinking market has always favored mini cars, and the penetration of mid-range products based on A-class cars is gradually strengthening.
In February 2022, the sales volume of new energy vehicles | Source: Garage 42
The hot sinking market has supported a large number of new energy vehicles in China, and Li Jinyong, president of the New Energy Vehicle Branch of the Automobile Chamber of Commerce of the All-China Federation of Industry and Commerce, disclosed at the 2022 Electric View Conference that in 2021, non-restricted cities contributed 70% of the sales of new energy vehicles. Multiple factors such as consumer preferences and channel layout of car companies have jointly created a boom in new energy in the sinking market.
From the perspective of consumers, the pursuit of high cost performance is still the biggest driving force for their consumption. Compared with traditional fuel vehicles, the purchase of new energy vehicles can not only get policy incentives, but also save money by using electricity than using oil. According to a new energy car owner in Liangshan County, Shandong Province: "Usually, it is to drive to and from work and pick up and drop off children, driving an average of 200 kilometers a week, charging once a week, and spending less than 20 yuan per week on the car." ”
From the sales side, traditional car companies have more complete sales channels in the sinking market than the new forces. Tesla, Weilai and other new forces adhere to the direct operation model, this high cost, low rate of return of the channel model is difficult to fully cover low-tier cities, so for the current car, test drive demand for sinking market consumers, the purchase of new forces is not cost-effective.
Ai Media Consulting once conducted a survey on the sales channels of the sinking market - dealers within 20 kilometers are the main car purchase choices for users in the sinking market, such as parallel imports, direct sales models, etc. The share of the sinking market is only 2%. In addition, if the construction of sinking channels is met, manufacturers need to establish 300+ sales outlets, and each outlet has at least 10 or so stores of radiation capacity, which is beyond the current strength of the new forces, and the advantages of traditional car companies.
At the same time, the sinking market follows the characteristics of the acquaintance economy, and the word-of-mouth spread and the recommendation of relatives and friends have a strong consumer persuasion. Forbes told such a story in the report: after Wang Hailong, a kashgar boy, made up his mind to buy a car, he did not run to the 4S store hundreds of kilometers away, but relied on the introduction of relatives to find a small dealer in the county and asked the car shop owner to help coordinate the desired model. "There are 80,000 small car dealers in China, which are like capillaries that form a car sales network in the sinking market." Hu Fei, founder and CEO of Sell Good Car, said.
In addition, the policy support related to auto finance has also added a fire to the heat of the sinking market. Li Xiang, secretary of the party committee and general manager of Huaxing North Automobile Trading Co., Ltd., once said at the two sessions of the National People's Congress that through the financial leasing model, consumers will enjoy the right to use vehicles in advance by paying rent on schedule, and will obtain vehicle property rights after paying the final rent or one-time settlement, which is a low down payment and low financing threshold that can more effectively meet the demand for car purchases in the rural market.
Wuling Hongguang has implemented a down payment of 2999 yuan to pick up the car in the countryside activities, and can also handle the measures of one to five years mortgage loans, which directly stimulated the sales of the product.
High-end new cars are difficult to break
In the face of the huge sinking market of the cake, the new car-making forces that started with the high-end route finally couldn't stand it.
In the central market represented by first- and second-tier cities, the penetration rate of new energy has gradually increased to more than 20%, but with the increasingly strict acquisition of new energy licenses, the growth rate of the first- and second-tier city market may slow down. The main position is speeding up its internal rolling, and the new forces are bound to open up new room for growth.
At NIO's second quarter 2021 earnings call, Li Bin made it clear: "We will enter the mass market through a new brand, and we have now established a core team and taken an important step." In Li Bin's plan, NIO's relationship with new brands targeting the mass market will be similar to that of Audi-Volkswagen and Lexus-Toyota.
According to the plan, WEILAI will launch three models this year, in addition to the ET7 delivered in the first quarter, it will also include a smaller body size model, Li Bin said, this new model will be slightly lower than the current pricing of all products. The third model will most likely come from the sub-brand of Weilai Automobile.
NIO ET7 | Source: WEILAI official Weibo
The breakthrough direction chosen by Weilai is like the road that domestic mobile phone manufacturers have taken.
In 2013, in order to break through the low-end mobile phone market and capture young consumer groups, Huawei created the Glory series, relying on Huawei's production line and supply chain advantages, Glory grew into the head of the domestic market Internet mobile phone brand in seven years. In addition, Xiaomi incubated Redmi and OPPO to create realme, which separates the market space between the sub-brand and the main brand through product and price positioning, and quickly seizes the market.
Like mobile phone manufacturers such as Xiaomi and Huawei, NIO uses new products or new brands to open up the low-end market, and at the same time, it also highlights the high-end positioning of core main products. Walk on two legs, uninhibited and accomplish each other.
However, whether the sinking road of the new car can be passed like a mobile phone is still unknown. After all, in the sinking market that is not dominated by brand power, channels and cost performance are king. Will the new car-making forces, which are eager to get rid of the internal volume of the central market, fall into the new cost-effective quagmire and find it difficult to extricate themselves?
Xiaomi, who has tasted the "bitterness" of cost performance, is taking the initiative to leap to the high-end market, and at the moment, the new forces of car manufacturing are walking at both ends of a fork in the road with mobile phone manufacturers.
Xiaopeng Automobile | Source: Brand Official Weibo
In the field of mobile phones, overseas brands have seized the high-end market of Chinese mobile phones early in the morning. Whether it is Nokia and Motorola in the functional machine era, or Samsung and Apple in the era of smart phones, firmly occupy the high-end market, domestic brands want to survive in the cracks, there is only one way to overtake in the corner. Huaqiang North opened a gap with a cottage mobile phone, and the domestic brands that followed the entry, such as Xiaomi and OV, also gradually grew with a more extensive sinking market.
However, with the advent of the stock market, the product space for high cost performance and low profit margin is getting smaller and smaller, and on the road of building brands and obtaining higher premium rights, domestic mobile phone manufacturers are bound to go to the fields they are not good at, and compete with industry giants in the high-end market.
In contrast, in the field of new car manufacturing, whether it is Tesla, which is the first in the industry, or the domestic independent brand "Wei Xiaoli", which is followed by the domestic independent brand "Wei Xiaoli", it is starting from high-end products of more than 200,000 yuan, focusing on first-tier city consumers who are more sensitive to science and technology and innovation. With the gradual deepening of the layout and penetration of the consumer market and infrastructure in high-tier cities, the new car-making forces have eaten the "low-hanging fruit" little by little.
But after all, the hardware consumer goods industry is different from the Internet, OPPO, vivo's channel operation began in the era of functional machines, and long-term deep ploughing has allowed it to weave a first-class agent network, which is difficult to match by the new car-making forces with a relatively short development time. Before the new energy consumption demand in the sinking market is completely detonated, even if it is a direct store that sinks to a prefecture-level city, it is difficult to take into account the service and cost, let alone the delivery channels to more than 2800 county-level markets.
From the perspective of business operation, low-cost electric vehicles are already thin profits, before, interface news has mentioned in the report that the bicycle cost of Wuling Hongguang Mini EV is even less than 90 yuan, even if the products of the new forces are not low to this extent, but the narrowing of profits is almost inevitable. Coupled with the recent rise in the price of raw materials for new energy vehicles, will the "Wei Xiaoli", who have been losing money, be dragged deeper by the sinking quagmire?
The fat meat of the sinking market is tempting, but it is also full of danger and fierce competition. Is it the traditional car companies that continue to advance by relying on favorable terrain, or the new forces swooping into the war? A new scuffle belonging to new energy vehicles has already begun.