Chang'an and Great Wall, as China's top 3 brands with a volume of more than 1 million independent brands, are undergoing the transformation of brand segmentation and layout of new energy.
In the past few years, independent brands have indeed had a sense of crisis, or they have even begun to become a kind of "human design" of the head brand. Either suffering from the ship's difficulties and turning around, or wanting to show the determination of transformation, Chang'an and the Great Wall like to issue "warning and alarming words".
Changan, it is expected that in the next 3-5 years, 80% of the brands will face shutdown and turn. Great Wall Motors asked itself "Will Great Wall Motors survive next year", always maintaining a sense of crisis, in fact, it is also sending a signal to the outside world that it is transforming.
Last year, great wall announced at the science and technology conference the goal of annual sales of 4 million vehicles and 80% of new energy.
Source: Great Wall Motor's official website
Recently, Changan announced at the 2022 Changan Automobile Global Partner Conference that it is expected that by 2025, the total sales volume of Changan Automobile will reach 4 million vehicles, of which 3 million will be Changan brand, and new energy will account for 35%; by 2030, Changan Automobile's sales will reach 5.5 million, of which 4.5 million will be Changan brand, new energy will account for 60%, and overseas sales will account for 30%.
In other words, the Great Wall will achieve 3.2 million new energy vehicles in 2025, while Chang'an will have 1.05 million vehicles. As two independent brands of comparable size, why is there such a big difference in new energy targets?
Source: Changan Automobile's official website
Failed new energy strategy
In fact, in the past few years, it can be seen that whether it is the high-end of the brand or the new energy strategy, the independent brand has not gone very smoothly. Especially in new energy, independent brands often shout very loudly, but the steps are very cautious.
In terms of new energy strategy, in fact, there is no shortage of examples of failure of independent brands.
For example, at the end of 2015, Geely Automobile released the "Blue Geely Action" plan, the core goal proposed is that in 2020, Geely's new energy vehicle sales will account for more than 90% of the overall sales, of which plug-in hybrid models and oil-electric hybrid models account for 65% of sales, and pure electric vehicle sales account for 35%.
In 2017, Changan Automobile released the Shangri-La Plan, proposing to completely stop selling fuel vehicles in the traditional sense by 2025 and realize the electrification of full-spectrum products.
However, during this period, independent brands did not come up with a real new electrification platform product, and they introduced oil-to-electricity products based on the original models.
In fact, in the same period, foreign brands such as Volkswagen, Honda, etc. also have the same product strategy: with the smallest product development cost, launch oil to electricity products to test the water.
Radical goals, conservative products, coupled with new forces drawing on white paper, in the new energy market, auto brands with fuel vehicles as the main market have to be classified as "traditional brands".
In contrast, the Great Wall focuses on the mining of market segments, directly launching the Euler brand in 2018, first seizing the market share of low-end electric vehicles. This is a typical case of finding opportunities in the segment at a stage where the electric vehicle market is not yet mature, and a successful market strategy at a specific stage.
In 2021, Changan and Great Wall will sell 70,000 new electric vehicles and 137,000 units respectively. Among them, Changan Automobile relies on the Ben E-Star micro-electric vehicle, the highest sales volume of Euler is also the mini car Euler Black Cat, followed by the small electric vehicle Euler Good Cat, independent brands mainly began to rely on low-end models to earn double points, and do not yet have real product competitiveness.
It is precisely because of this year's supply chain cost crisis caused by the epidemic that Changan Ben E-Star and Euler Black Cat cannot withstand the pressure and have announced the temporary suspension of production.
Judging from the market size of 1.2 million vehicles in Chang'an and the Great Wall, the position of the two in the new energy market does not match the status of their first-line independent brands.
Technology, turning points
In fact, for independent brands, 2021 is an important time node.
The high-end of the fuel vehicle market has achieved initial results, electric vehicles have started to sub-brand, and independent brands are also quietly carrying out technical reserves. Regarding the development path, there is also a clear differentiation at this stage.
In the past few years, Great Wall Motors has incubated a number of technology companies in the fields of intelligent driving, intelligent cockpit, and three electrics, including The Ultimate Wisdom Walk, which was independent of the Great Wall in 2019, deeply bound to Xiandou Intelligence, which was just founded in 2019, and Hive Energy, which was independent from the Battery Division of Great Wall Motors in 2018.
Through capital binding, Great Wall Motors has created a core ecosystem and released a series of core technologies, including coffee intelligence, Dayu battery, as well as architecture, chassis, computing platform and other aspects.
One through capital binding, one with the help of a strong circle of friends, the Great Wall and Chang'an in the intelligent, electrification of a series of actions although different, but there is a point, both of them recognize the importance of transformation.
During this period, Changan also had a joint venture with Weilai, hoping to create a new new energy vehicle brand, but after the joint venture of Changan Weilai, it was just in time for the new forces to experience setbacks, resulting in changan Weilai being established for two years without any movement.
In 2021, Changan Weilai transformed into Avita, introduced Huawei and NINGDE era, Ningde era became Avita's second largest shareholder, the three also through the cooperative development model, to create a new CHN architecture, Avita also equipped with Huawei's iDVP intelligent car digital platform, and Huawei Inside capabilities.
Avita's first model 011 Source: Avita officially released
At the same time, Changan has released a new digital pure electric brand deep blue, and this year will launch C385EV, C673EV two models, as well as can be compatible with pure electricity, extended range, hydrogen fuel and other power configurations of the all-electric platform EPA1.
The Changan UNI brand also announced brand operation, which means that UNI will become part of Changan's electrification transformation as an independent brand, and carry out hybrid transformation like the Great Wall Wei brand.
It can be said that after several years of brewing, independent brands have officially entered a new era in which core technologies have appeared and formed a market segment array layout through multiple sub-brands. On the one hand, it can be seen that the use of plug-in hybrid to transform the existing fuel vehicle market and achieve high-end in this way has become a common practice of mainstream independent brands, on the other hand, the electrification products of the new platform have also become a landmark stage for independent brands to start a new journey of electrification.
Chang'an, the Great Wall in the technology, brand, products have completed the layout, fuel vehicle product hybridization, medium and high-end electric vehicles sub-branding, corresponding to the point of view, the Great Wall has Euler, salon, Changan has deep blue, Avita. In the case of the same volume, why are the expectations of the two brands for new energy in 2025 so different?
Compared with the two, the Great Wall is obviously more ambitious. On the one hand, the Great Wall is targeting the global market. Of course, such a goal is also very risky. Some analysts predict that Tesla, which currently has the highest sales of electric vehicles in the world, is expected to sell 2.3 million units in 2025, and may even reach 4 million. BYD, which has already announced its oil outage, has a planned production capacity of 3 million vehicles in 2025. The Great Wall's target of 3.2 million vehicles is almost already aimed at the first echelon of the new energy market.
Changan considers the actual fact that it does not have a truly competitive product in the new energy market at present, but at the same time, Changan must transform the latest technology into real value in the market in these two or three years.
2025 is a node in the new energy market, a key step into scale and marketization, and car companies have put forward goals, which to some extent represent the determination to transform driven by independent technology.
But at the same time, it is also necessary to look at the development of the market more calmly: increasing production capacity, following the trend of model innovation, pursuing a position in product positioning, but ignoring the supply chain system, long-term business capabilities of enterprise transformation, etc., insufficient response to sudden supply chain crises may lead to the failure of the goal.
In this new phase, what is needed is a fundamental transformation.
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