I don't know if you have found that if you are ready to buy a domestic car in recent years, there are more and more brands to choose from. In addition to our conventional sense of the "old brand", what Lynk & Co, Extreme Kr, Euler, Wei Pai, Tank, Lantu, Jietu, Xingtu, UNI, Deep Blue... In short, the variety of new brands is dazzling. But these new brands are often sub-brands derived from traditional car companies, but now most of these sub-brands operate independently, which is what we commonly call the multi-brand strategy.
As the saying goes, having more children is a good fight. For car companies, the biggest significance of sub-brands is to break the framework of existing conventional brands, so as to achieve differentiated competition, and enrich the brand product matrix, sell more cars and make more money.
What is the reality? Taking Geely's Lynk & Co as an example, as an independent high-end brand mainly engaged in the joint venture market, Lynk & Co can be said to be very successful on the road of independent operation of sub-brands. In terms of annual sales in 2021, Lynk & Co's annual sales reached 220516 vehicles, an increase of 26% year-on-year, and since the birth of the brand, Lynk & Co has contributed 600,000 sales data to Geely Automobile, which is very impressive.
However, on the contrary, it is also a high-end sub-brand, and the starway from Chery is obviously not so good. In 2021, the annual sales of Xingtu Automobile will only be 37,154 units, compared with the achievement of Lynk & Co breaking 200,000 vehicles, it is obvious that some cannot be taken. Even in many cities, Xingtu's 4S stores have gradually been replaced by other brands, and even in the terminal, Xingtu has no choice but to discount sales due to poor sales, and since the price reduction, it has also damaged the image of high-end positioning at the beginning of the establishment of the brand.
Compared with Lynk & Co and Xingtu, it is not difficult to see that the development of sub-brand strategies of car companies is not a "one-million-profit" thing. Doing well can increase sales, and even feed back to enhance the image of the parent brand. But if you don't get it right, you will also fall into embarrassment, and even become a "drag" of the parent brand.
The same thing has been tried by a large number of independent brands more than a decade ago, providing a wealth of experience for latecomers. In that wave at that time, Chery Kerry, Ruiqi, Geely Emgrand and other sub-brands were good cases. And as now, car companies create sub-brands, the purpose is to further enhance the brand premium, and even create high-end models.
This line of thinking is also well understood. More than ten years ago, the main market for independent brands was still below 100,000 yuan, but the capacity of this market was limited after all. If the ceiling of 100,000 levels is not broken, then independent brands will not be able to break the A-class car or even SUV market blocked by joint venture brands. However, at that time, the product strength of independent brand models was often weak, and even some models could not even solve the basic quality problems. Consumers spend more money to buy only the packaged high-end brands, the product core is not much different from the basic car, the natural appeal is limited, and eventually led to a large number of sub-brand strategies to fail.
But now, with the mainstream independent brands in the product quality and three major pieces and even new energy technology breakthroughs, the hardware conditions on the sub-brand road have been established. Especially in today's world, new car-making forces are emerging in an endless stream, not only the products are more interesting, but also the gameplay in marketing is more abundant. In contrast, traditional car companies have a difficult turn, and the response to the market is inevitably slow and half a beat. Therefore, the independent operation of the brand can not only increase the consumer's point of view, but also increase the sensitivity of the brand to the market, so as to achieve differentiated competition. Take the Great Wall Group as an example, Euler focuses on women, tanks focus on hardcore off-road, Haval focuses on the home SUV market, and enough differentiation undoubtedly plays a positive role in the sales of the parent brand.
Write at the end
However, in Lao Wang's view, it is not easy to play the sub-brand well. First of all, in terms of products, the models of the sub-brand should be sufficiently different from the parent brand. Playing high-end is bound to mean that the product strength needs to be improved in all directions! In terms of marketing means, compared with the tradition, the sub-brands that operate independently must have unique brand labels, such as Lynk & Co trend sports, Euler women's pure electricity, tank hardcore off-road, consumers need enough attraction points. From this stage, the significance of the existence of sub-brands lies more in the extension of consumer segmentation needs preferences, it does not have to become the mainstream volume, but once successful, the help for the parent brand is bound to be very large.