Abstract: No longer the luxury car is not important, the giant's abandonment of the "oil to electricity" route highlights the determination to electrify, but in the Chinese market in 2022, the localization rate is not high, which is bound to constrain mercedes-benz's supply chain
Text | Guo Huaiyi
Edited by 丨 Wang Jingyi
The era of new energy vehicles is surging and the former inventor of the car, Mercedes-Benz, is also trying to catch up.
In 1866, the German Karl Friedrich Benz built the world's first car, and the luxury brand Mercedes-Benz became famous.
Two centuries later, "we have only one direction to go, and that is electrification." Ola K Lulenius, Chairman of the Board of Directors of Mercedes-Benz Group AG (FRA:MBG), once again conveyed his determination to electrification.
Judging from the market performance in 2021, although the new pure electric brand EQ series created by heavy investment increased by 154% year-on-year, the annual sales of 48,000 vehicles not only lagged behind new forces such as Tesla, but also lagged behind old rivals such as BMW and Audi.
Fortunately, the financial report data is good, giving Mercedes-Benz certain transformation funding conditions.
In order to achieve a counterattack in the electric vehicle market, Mercedes-Benz will invest 40 billion euros on the one hand to realize the electrification of all brands. On the other hand, in order to adapt to the rapid iteration of pure electric vehicles, Mercedes-Benz began to abandon the traditional strategy of the fuel vehicle era and changed from "oil to electricity" to full pure electricity.
China is the largest single market for Mercedes-Benz and the world's largest new energy vehicle market, and whether it can make a breakthrough in China's new energy market will be related to the success or failure of Mercedes-Benz's transformation.
The initial battle of the electric model is unfavorable
The COVID-19 pandemic and chip shortages have hit Mercedes-Benz's sales hard. Mercedes-Benz's global sales in 2021 were 2.4 million units, down 5% year-on-year, and the top position in global luxury car sales was taken by BMW.
▲ Image source: Public information collation
Mercedes didn't care. Conlinson said in 2020: For Mercedes-Benz, the most important thing is not sales or ranking. The most important job of Mercedes-Benz is to achieve carbon neutrality and electrification.
In order to achieve the electrification transition, Mercedes-Benz announced in 2019 that it will invest more than 10 billion euros in the next few years to expand the lineup of electric models.
As a new pure electric series of Mercedes-Benz, the first product of the EQ series, EQC, did not perform well in the market after its listing in 2019, which was a huge gap with the dominance of Mercedes-Benz in the traditional fuel vehicle market.
The Mercedes-Benz EQ series currently has four models, namely EQA, EQB, EQC and EQS, with a minimum price of 365,800 yuan, and the cumulative global sales in 2021 are only 48,900 units, which is not only behind Tesla's (NASDAQ: TSLA) 936,000 units, or even less than Niolai's (NYSE: NIO, 09866.HK) 91,000 units. Among the German luxury brands, BMW's 103,000 units and Audi's 81,000 pure electric models also lead Mercedes-Benz in sales.
In the Chinese market, the EQ series also suffered setbacks. According to the data of the Association of Passenger Transporters, in 2021, the sales of the main model Mercedes-Benz EQC in China will only be 6098 units, even less than Weilai's single-month sales.
▲ Source: Traffic Insurance Risk Volume Draft: Yan Bin
Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, told Caijingqiche (ID: caijingqiche): "Many traditional car companies' pure electric models are transformed from the traditional fuel vehicle platform, which is what we commonly call oil to electricity, which is different from the products created by the pure electric platform, and the competitiveness of oil to electricity will be insufficient, so it is still necessary to have a new pure electric platform." ”
Just when the EQ series could not open the market, as the basic sales plate of Mercedes-Benz in China, the fuel vehicle market also sounded the alarm bell.
According to the data of the Association of Automobile Associations, after tesla Model 3 achieved domestic production in 2020, the Mercedes-Benz C-class, which was close to its price, experienced a 3.8% decline in sales that year. In 2021, the growth of Model 3 sales and the start of delivery of domestic Model Y have caused Mercedes-Benz's three main models in China, C-class, E-class and GLC, to decline at the same time, with a range of -14.8%, -9.3% and -17.7% respectively.
Cui Dongshu, secretary general of the Association, said in early 2021 that with the improvement of Tesla's localization rate and the reduction of costs, the competitive price relationship between Tesla Model Y and Ashkenazi luxury SUVs has reversed significantly. Especially in megacities, the license advantage will allow Model Y to perform better.
The traffic insurance data confirms Cui Dongshu's prediction that as the main model of Mercedes-Benz in the luxury SUV market, the Mercedes-Benz GLC with a starting price of 400,000 yuan has been impacted by the Tesla Model Y.
In 2021, among the five cities with the highest Mercedes-Benz GLC sales, Shanghai, Beijing, Shenzhen, Chengdu and Hangzhou, mercedes-Benz GLC sales declined collectively, with a range of -23.3%, -19.7%, -27.5%, -22.9% and -11.9% respectively. The same thing happened on the Mercedes-Benz C-Class and E-Class.
In the case of the EQ series being unfavorable and the fuel vehicle being impacted by Tesla, Mercedes-Benz chose to adjust the strategy in time. In July 2021, Mercedes-Benz released a new electrification strategy, the previous "electric first" to "full electric".
Despite the decline in global sales, Mercedes-Benz's revenue increased by 9% to 167.9 billion euros in 2021, and net profit increased by 484% to 23.3 billion euros, thanks to the product portfolio, bicycle pricing, improved cost efficiency and used car business. This undoubtedly gives Mercedes-Benz sufficient capital to fully implement the strategic transformation.
The giant turned and walked toward full pure electricity
"Whether in the Chinese market or around the world, we are concerned that consumers are abandoning internal combustion engine models at a faster rate than we expected, choosing plug-in hybrid models, or even skipping plug-in hybrid models and choosing pure electric models directly." On April 13, Britta Seeger, a member of mercedes-Benz's board of directors and responsible for sales and marketing, told Caijingqiche (ID: caijingqiche), "For Mercedes-Benz, our path to 'full electric' is very clear, that is, to vigorously promote pure electric models."
It is not difficult to see from Bessg's statement that Mercedes-Benz has regarded pure electric models as the future development direction. However, as a pure electric model born from the fuel vehicle platform, the EQC of "oil to electricity" has not won the favor of the market, which shows that in the era of intelligent electric vehicles, the brand appeal of Mercedes-Benz alone can no longer cover the world.
A number of industry insiders told Caijingqiche that if Mercedes-Benz wants to build the EQ series into a luxury pure electric brand, it not only needs a macro strategy, but also comes up with breakthrough products, because consumers can only understand a company through products, and Mercedes-Benz can only achieve a counterattack in the pure electric market.
On April 19, the new EQS pure electric SUV made its global debut in China. At the other end of Eurasia, Mercedes-Benz also announced earlier that the VISION EQXX concept car will travel thousands of kilometers on a single charge for the first time.
The VISION EQXX concept car departed from Sindelfingen, Germany, with a high-speed cruising speed of 140 km / h and an average speed of 87.4 km / h, through multiple road conditions and complex climates, and finally arrived in Cassis, France, a total distance of about 1008 km, and there was still about 15% of the remaining electricity on arrival. As of now, all the new and old forces, including Tesla, have not achieved a single charge to drive more than 1,000 kilometers.
The VISION EQXX is more than just a demo-only concept car. "In 2025, almost all the technology equipped with the VISION EQXX concept will be put into mass production." Markus Sch, a member of mercedes-Benz's board of directors and chief technology officer in charge of research and development and procurement, told the media.
Under the background of the rapid iteration of new energy vehicles, Mercedes-Benz has also changed a traditional strategy.
In the era of fuel vehicles, Mercedes-Benz will first apply new technology to S-class cars, and then gradually descend to the lower car series.
But Xue Fuming said: "Today's innovation and technology development is so fast, we will not wait for the next generation of S-class to come out before applying the most advanced technology." No matter what the model level, as long as we develop the most advanced technology, we will continue to upgrade the product. ”
Under the strategy of "all-electric", the traditional strategy of S-class priority has come to an end, and the "oil to electricity" as a transitional route will gradually fade out, and in the future, Mercedes-Benz will focus on a new platform with pure electricity first.
According to the plan, from 2022 to 2030, Mercedes-Benz plans to invest more than 40 billion euros in pure electric models, and all its brands will be electrified.
Christoph Starzynski, vice president of architecture and electric drive development for Mercedes-Benz's large-scale all-electric models, said that the new platforms launched in the future will be electric vehicle-first platforms, such as the upcoming Mercedes-Benz Modular Architecture (MMA) platform designed for compact and medium-sized cars, which was developed from the beginning with the idea of electric vehicles first, although it still has the production capacity of fuel vehicles.
From "oil to electricity" to full pure electricity, this is the intuitive feeling of the outside world for Mercedes-Benz's new pure electric platform. As an old rival of Mercedes-Benz, BMW's Neue Klasse architecture, which will be launched in 2025, is also considered a similar platform.
As for why these two traditional giants chose such a route, Zhang Junyi, managing partner of Oliver Wyman Consulting, told Caijing Automobile (ID: caijingqiche): "After all, the sales of electric vehicles are still small, if only the development of electric vehicle platforms, for some traditional car companies is not worth the loss." Therefore, taking into account pure electricity and fuel oil can not only expand the utilization rate of the platform, but also share the cost. In addition, this practice should not be simply regarded as a copy of 'oil to electricity', the two are completely different, but whether this compromise is the most effective way still needs to be tested by the market, otherwise it is a temporary compromise response to the high cost of the three electricity. ”
Be careful of supply chains that become Achilles' heels
In 2021, China became mercedes-benz's largest single market for the seventh consecutive year. At the same time, China is also the world's largest new energy vehicle market.
Under the superposition of the two "largest", the Chinese market is of great significance to the transformation of Mercedes-Benz. China will be the key region for Mercedes-Benz to launch electrification.
In 2022, Mercedes-Benz plans to launch eight pure electric and plug-in hybrid models in China. Among them, the first domestic pure electric sedan EQE based on Mercedes-Benz's new pure electric EVA platform will be listed this year.
Mercedes-Benz announced the establishment of a Shanghai R&D center in March to further focus on intelligent connectivity and autonomous driving. This also marks the era of Mercedes-Benz entering the era of dual R&D centers in Beijing and Shanghai in China.
For this layout, Professor Hans Georg Engle, Senior Executive Vice President of Daimler Greater China Investment Co., Ltd., Head of R&D, Platform Management and Supplier Management, said: "Regarding the division of labor between the R&D teams in Shanghai and Beijing, Beijing will remain the core of our R&D work in China, while the Shanghai R&D Center will focus on the development and testing of software and hardware for intelligent interconnection and autonomous driving. Such a R&D layout will reflect considerable flexibility and further improve R&D efficiency. ”
Under the transformation strategy of "all-electric", Mercedes-Benz is doing a meticulous layout in the Chinese market, whether it is products or research and development. But the supply chain is increasingly like the Achilles heel of Mercedes-Benz in China.
"In the transformation from functional vehicles to intelligent electric vehicles, the transformation of traditional car companies is not a problem that can be solved by only the release of intelligent electric vehicles, but a comprehensive transformation that includes production, research and development, sales, supply chain and even company architecture." Among them, the supply chain is a foundation. Zheng Yun, global senior partner at Roland Berger and vice president of Greater China, told Caijingqiche.
In China, Mercedes-Benz in the transition period has encountered problems on the basis of the supply chain. A Beijing Benz person told Caijingqiche (ID: caijingqiche): "The current production planning can be said to be internal and external troubles, internal worries from the supply chain disruption caused by the Shanghai epidemic, external troubles from the Russian-Ukrainian conflict, many air routes have become unsmooth, including some chips, including the supply of core components there are problems." ”
It should be said that the supply chain tension caused by the Shanghai epidemic and the Russian-Ukrainian conflict is indeed a problem faced by the entire industry, but the relatively low localization rate is also a real problem that Mercedes-Benz needs to solve.
Huatai Securities pointed out in a research report that the localization rate of Mercedes-Benz in China in 2018 was 72%. The above-mentioned Beiben person told Caijingqiche (ID: caijingqiche): "At present, some domestic parts of Mercedes-Benz are not completely domestic, but are produced in the form of assembling imported parts, so the actual localization rate may not be so high." ”
For the current localization rate of Mercedes-Benz, Caijingqiche (ID: caijingqiche) has asked Mercedes-Benz for verification, but as of press time, no relevant data has been received.
Cui Dongshu, secretary general of the Association, told Caijingqiche (ID: caijingqiche): "At present, the localization rate of auto parts of mainstream domestic joint venture brands is 80% to 90%, while luxury brands such as Mercedes-Benz and BMW are around 70%. ”
As a comparison, in January 2020, Tesla's first domestic model, the Model 3, rolled off the production line. In August 2021, Yuan Guohua, chairman of Shanghai Lingang Economic Development (Group) Co., Ltd., introduced that by the end of 2021, the localization rate of Tesla's Shanghai Gigafactory will reach about 90%. In November of the same year, Tao Lin, Tesla's global vice president, said that she hoped that in the near future, domestic Tesla models could achieve nearly 100% localized productivity.
In Chen Shihua's view, now the international mainstream parts giants have production capacity in China, from a technical point of view, domestic parts are not irreplaceable, more likely to be operational considerations.
The relatively low localization rate has affected the production capacity of Beijing Benz. The above-mentioned Beiben source told Caijingqiche (ID: caijingqiche) that in the past March, Beijing Benz had a brief suspension of production, and the current production frequency was reduced from two flights per working day to one. What is more worrying is whether the shortage of components will affect the launch of the new EQE.
It should be pointed out that BMW's production in China does not seem to have been similarly affected. In 2020, BMW Brilliance said that its localization rate will rise to 70% by 2022.
But in 2021, BMW's sales in China not only achieved growth, but also completed the overtaking of Mercedes-Benz. Some analysts believe that relying on a relatively stable supply chain and logistics system, BMW is more flexible and flexible in the face of the strong impact of the epidemic, and the flexible production line that is adjusted immediately can also focus key components on the main model, thereby boosting sales.
Judging from BMW's practice, although strengthening supply chain management can also make up for the lack of relatively low localization rate. But Zhang Junyi still stressed the importance of local suppliers: "The markets in various countries are fragmented, so there is a greater need for local suppliers, otherwise it will not be able to meet local needs." ”
Former British Prime Minister Winston Churchill famously said: Never waste a crisis. For Mercedes-Benz, the supply chain crisis is also a good opportunity to deepen its localization rate and improve its supply chain management, and if handled properly, it will make up for a short board in its business in China.