Gac Acura behind the Chinese market new luxury cars are ready to "start"

China Business Daily (reporter Wang Tongxu wen / photo) Rumors settled, GAC Acura finally chose to say goodbye. Recently, the official website of GAC Honda announced that it will no longer produce and sell existing products of the GAC Acura brand from 2023, and integrate resources to join the electrification business. From the pride of promising to sell 100,000 vehicles a year at the beginning of landing in the Chinese market, to the loneliness of selling less than 6,000 vehicles a year before leaving the market, what did Acura do wrong? Or it is foreseeable that with the rise of the mainland automobile industry and the "encirclement" of independent new energy brands, more and more "new luxury cars" or replace "Acuras".

Poor sales Exit becomes inevitable

In fact, before the announcement of Acura's exit, the news of its exit had long been spread, and some dealers even began to sell inventory cars.

After the announcement of the exit, a reporter from China Business Daily visited the GAC Acura 4S store located in Jingang Auto Park, Chaoyang District, Beijing, which is also the only independent GAC Acura 4S store in Beijing. The reporter saw that at present, the Acura showroom has been "people go to the empty building", only in the adjacent Dongfeng Honda Automobile Golden Port special sales service store, there are acura CDX and RDX one of the models.

GAC Acura 4S store in Jingang Auto Park, Chaoyang District, Beijing.

A GAC Acura sales staff told a China Business Daily reporter: "Now some models do not have existing cars, although they can be booked, but the inventory is not much." The purchase of CDX and RDX series models basically has a cash discount of about 50,000 yuan, which can be said to be very strong. ”

When asked about the after-sales protection, the salesperson said that although Acura is about to leave, there is no need to worry about after-sales. "In the future, after-sales service can be carried out normally at Guangqi Honda's 4S store." For Acura's after-sales problems, GAC Honda also stated in the announcement: it will continue to provide services for GAC Acura car owners through GAC Acura special stores that have joined the electrified sales service network, as well as GAC Honda's related channels, to protect the rights and interests of car owners.

In 2006, Acura entered the Chinese market as an imported luxury car. However, its sales have been poor since entering China, and even hit a record low of 2300 vehicles in 2012. Faced with a dilemma, Acura tries to save herself. In 2016, Guangqi Honda Acura was officially launched, and the localization of Acura ushered in a short spring. According to the data, the cumulative sales volume of GAC Acura in the domestic market in 2016 reached 9,062 vehicles, an increase of 120% year-on-year. The following year, GAC Acura sold more than 16,000 vehicles, the peak of sales since entering the Chinese market.

However, the localization development has not brought real vitality to Acura, and the still dismal sales after the "honeymoon period" have forced Acura to slow down the pace of product launch, no longer launch new models, but only on the basis of existing models to iteratively upgrade. Before announcing its exit, Acura only had two domestic models on sale in the Chinese market, CDX and RDX.

"The dismal sales volume is the most direct trigger for Acura to withdraw from the Chinese market. Acura's sales were too low last year, and many of these sales contributed through price reductions. Zhang Xiang, dean of the New Energy Vehicle Technology Research Institute of Jiangxi New Energy Technology Vocational College, said in an interview with China Business Daily that for a luxury car brand, the annual sales volume in the Chinese market must reach at least 50,000 to ensure profitability. If the benefits of economies of scale cannot be achieved, "closing the door" is the inevitable result.

"The automotive industry is undergoing three major changes - the change from traditional fuel vehicles to new energy vehicles, the rise of intelligent driving, and the rise of local brands represented by intelligent new energy vehicles." Mei Songlin, a senior analyst in the automotive industry, told China Business Daily that "these changes are not conducive to the development of a foreign traditional brand in the Chinese market (including luxury and non-luxury brands). For Acura, it has not been able to gain a place in the market during the boom of traditional automobiles, and it will be even more difficult now and in the future. Therefore, Acura's withdrawal and GUANGC Honda's integration of resources to accelerate electrification are wise moves to follow the trend. ”

Water and soil are not satisfied with the preferences of Chinese consumers

In the 16 years since it entered the Chinese market in 2006, Acura, a Japanese luxury brand that has been successful in the North American market, has not been able to truly gain the favor of Chinese consumers. Under the influence of factors such as high price and low recognition, slow product launch, Acura is gradually embattled.

Mr. Han, the former owner of Acura CDX, believes that Acura's brand power is weak, there are few models, and the replacement speed is also slow, which is contrary to the positioning of its luxury cars. "Acura and Changan Automobile's logo is very similar, many people around me do not know this car, and thought I bought Changan." In the minds of many people, Acura is not a high-end brand, but it is no different from many of Honda's brands. Compared with other luxury cars in establishing a brand image and brand marketing efforts, Acura's investment is very small, and its popularity is not as good as other Japanese brands. Mr. Han told reporters.

A car owner told reporters that he had test-driven Acura and felt that the interior of the model was relatively outdated. In the case of the price once benchmarked BBA (Mercedes-Benz, BMW, Audi), the cost performance is not high, and when buying a car, it still does not hesitate to give up Acura.

"New cars are not easy to sell, the amount of ownership in the market is low, used cars are naturally not easy to sell, easy to 'smash' in the hand, so when collecting used cars, I generally tend to refuse acura." A used car salesman told reporters.

Cui Dongshu, secretary general of the Association, said: Acura is not a brand tailored for Chinese consumers, after localization production, Acura's technical characteristics are not prominent, brand accumulation is not enough, naturally it is difficult to win the favor of Chinese consumers.

Mei Songlin said that the psychological characteristics of Chinese consumers are "not more than three things" and cannot accept too many different brands in the same category, which is especially obvious in the luxury car market. The core reasons why consumers buy luxury cars can be summarized into two: brand differentiation and cost performance. You can't have both, but you can choose one or the other to "attack the city" and win over consumers. Luxury brands that are currently declining are usually vaguely positioned in terms of brand differentiation and cost performance. In addition, it is also necessary to take into account the combined impact of factors such as the timing of the brand's entry into China.

"First of all, Acura's pricing was high in the early stage of entering the Chinese market, and it lacked competitiveness compared with first- and second-tier luxury cars such as BBA and Lexus, and then missed the best market development period." Secondly, in recent years, the rise of independent high-end brands has further squeezed the living space of Acura. In general, Acura does not meet the needs of domestic consumers, but only copies the models sold abroad for simple localization, and it is inevitable that it will lose in the fiercely competitive Chinese luxury car market. Zhang Xiang further explained.

The emergence of independent brands New luxury cars are coming?

The rise of new energy vehicles has blown the east wind of market transformation, and the mainland new energy vehicle market has ushered in a golden period of rapid development. According to data released by the Ministry of Industry and Information Technology, the sales of new energy vehicles in mainland China reached 3.521 million units in 2021, an increase of 1.6 times year-on-year, ranking first in the world for seven consecutive years. In March 2022, the wholesale penetration rate of new energy vehicle manufacturers was 25.1%, an increase of 14 percentage points over the 11.1% penetration rate of the same period last year, while the penetration rate of independent brand new energy vehicles was as high as 41%. In the March new energy SUV sales rankings, high-end new forces such as Ideal and Weilai were on the list.

In the face of the "encirclement" of traditional giants and new forces, who will be the next "Acura"? Some insiders speculate that Acura's brothers and sisters, Infiniti, who also has low sales in China and failed to catch up with the new energy "early train", may easily retrace Acura's old road. But whoever the second "Acura" is, there is probably not much time left for it.

Acura's delisting has also sparked industry discussions on the positioning criteria for luxury cars and high-end cars: Is high-end equal to luxury? In its monthly in-depth report, the Association lists Mercedes-Benz, BMW, Audi, Cadillac, Jaguar, Land Rover, Volvo, Infiniti, Acura, and Tesla as luxury car brands; and calibrates vehicles priced at 300,000 or more as high-end cars. But the embarrassing thing is that luxury cars also contain many models below 300,000, and the line between high-end and luxury is still blurred.

In this regard, Cui Dongshu proposed a new concept - a new luxury car. "The concept of new luxury cars on the mainland should be gradually strengthened. In other words, the actual sales price of electric vehicles is more than 200,000 yuan of new energy models, which can be considered to be our new luxury concept. The concept brand and model of this new luxury car should be an important opportunity for the transformation and upgrading of our domestic independent brands, and cultivating a new luxury concept can make these brands get better social recognition and enable consumers to get more consumption choices. Cui Dongshu said.

With the remarkable results achieved in the development of new energy vehicles in the mainland as the cornerstone, what is the possibility of independent brands reaching the top of the Chinese market in the future? Mei Songlin believes that it is probably too early to say that the future king identity of independent brands is still too early. At present, many technologies of smart electric vehicles are still in the development stage, the competition pattern on the new track is undecided, and the entrants may become dark horses.