According to the latest statistics from the China Association of Automobile Manufacturers, the market share of independent brands has increased to 48.5% in March, reaching a new high in recent years. The market share of joint venture brands in the Chinese market is facing a continuous decline. Behind the change in market share, independent brands that are continuing to promote brand upwards, high-end products and new energy vehicles are making a comprehensive impact on joint venture brands. Many joint venture brands, because of product solidification, long-term brand tonality, weak in the field of new energy vehicles, etc., the advantage of brand power is decreasing. Joint venture brands have fallen into collective anxiety in the Chinese market.
The decline in sales is becoming more and more pronounced
The data shows that in the first quarter, the market share of other major departments other than independent brands in the Chinese market has declined to varying degrees. Among them, German brands accounted for 20.0%, down 3.1% from 23.1% in the same period last year; Japanese brands fell to 20.9%, down 0.8% from 21.7% in the same period last year; American brands were 9.6%, basically the same as in the first quarter of last year; Korean brands fell to 1.7%, down 1% from 2.7% in the same period last year; although French brands rose slightly, their market share was only 0.8%. Behind the decline in the market share of major brands other than independent brands is the general decline in sales of joint venture brands in China in the first quarter.
Affected by the epidemic in Shanghai, Changchun and other places, SAIC Volkswagen and FAW-Volkswagen, which are headquartered in Shanghai and Changchun, inevitably experienced a decline in sales, which is also one of the main factors in the decline in sales of German brands. According to data released by SAIC Motor, SAIC Volkswagen sold 110018 vehicles in March, down 2.21% year-on-year. The decline in FAW-Volkswagen sales is more pronounced. According to the data, FAW-Volkswagen sold 126131 vehicles in March (excluding Audi imported cars), although this sales data still occupies the top position in the monthly sales list of car companies, but the year-on-year decline of 40% sales has seriously dragged down the hind legs of the German brand's market share in China.
The days of the Japanese top three are not good. In March, Dongfeng Limited's passenger car segment (Nissan, Venucia and Infiniti brands) sold 67,910 units, down 33.5% year-on-year, while in the first three months, sales were 242931 units, down 16.9% year-on-year. Nissan (China) attributed the current decline in sales to external factors such as the COVID-19 pandemic and cross-industry raw material shortages. Shohei Yamazaki, senior vice president of Nissan Motor Corporation, chairman of the Nissan China Management Committee and president of Dongfeng Motor Co., Ltd., said: "The continued chip shortage and supply chain disruptions due to the intensification of the COVID-19 pandemic have had a continuing impact on product production and sales. ”
Honda China released data showing that in March, sales in China 101061 vehicles, down 33.2% year-on-year. In the first three months, Honda's cumulative sales in China were 353,800 units, down 9.3% year-on-year.
Toyota's sales in March were better, but only slightly higher. Toyota China reported sales of 167,300 new vehicles in China in March, up 0.4 percent from the same period last year.
Data released by SAIC-GM shows that in March, SAIC-GM's sales were 88,523 units, down 31.42% year-on-year. Another major U.S. brand, Changan Ford's overall sales in the first three months, showed a large decline. According to data released by Changan Automobile Group, in March, Changan Ford sold 23,500 vehicles, a slight increase of 0.64% year-on-year; cumulative sales in the first three months were 60,287 units, down 6.39% year-on-year.
Judging from the current market sales data performance of the major joint ventures, the major joint ventures have encountered bottlenecks in the Chinese market, and their lives are generally not good, and anxiety is inevitable.
The global supply chain system has encountered a big test
Although, as Shohei Yamazaki has said, the continued chip shortage and supply chain disruptions due to the intensification of the COVID-19 pandemic have had a continuing impact on the production and sales of automotive products. These irresistible external factors are indeed a major reason for the decline in sales of joint venture brands in China. However, it is undeniable that the impact of factors such as chip shortage and the new crown pneumonia epidemic on the supply chain is also having a negative impact on independent brands that are also selling in the Chinese market. However, in this regard, the flexible supply chain management mechanism of independent brands has shown great advantages. Especially in the face of chip supply shortages and other issues, the flexible procurement management of independent brands allows them to better cope with factors such as supply shortages, and more critically, the joint venture brands are restricted by the global supply chain management system of foreign multinational car companies, and in the face of chip supply shortages and other issues, these multinational companies will inevitably concentrate their superior resources to more profitable branches or markets, which to a certain extent exacerbates the supply chain supply interruption risk encountered by their joint ventures in China. Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers, stressed that in the face of the risks encountered by the supply chain under the epidemic and the crisis brought about by the shortage of chips, the flexible procurement system and supply chain management system of independent brands have shown certain competitive advantages, thus helping independent brands to achieve good performance in the market, while joint venture brands are limited by this, and the supply chain security crisis is greater, which in turn affects their market performance in China.
At the same time, although the major joint venture brands have achieved a good localization rate, some core components still rely heavily on imports. Under the influence of the epidemic and other factors, cross-border procurement, transportation, etc. have encountered certain risks, which has led to the supply chain risk of these joint venture brands in China. Under the influence of the new crown pneumonia epidemic, there are constantly joint venture brands that are affected by factors such as logistics and transportation, and some parts cannot arrive as scheduled, affecting their normal production rhythm in China. Therefore, the establishment of a localized supply chain management system has become a matter that the joint venture brand is actively promoting.
Over the years, in the automotive supply chain management system, the formation of a pyramid-like multi-level supply system and "lean production" of low-inventory supply chain management two major systems, the current two systems are facing a certain impact. In the traditional multi-level supply system, car companies have handed over the research and development of most parts functions to first-level suppliers, and car companies only need to verify these overall modules and a small amount of redevelopment to load the car, which greatly improves efficiency. At present, the rapid iteration of automotive product technology requires the continuous acceleration of the development process of the whole vehicle, and the drawbacks of this system are constantly highlighted. At the same time, the lean model pioneered by Toyota has greatly reduced the inventory of car companies, but this model will suffer a greater impact in the face of the impact of the epidemic. The management system of the joint venture company, which is deeply affected by these two systems, naturally has to face a greater test.
The traditional development model in China is outdated
In addition to external objective factors such as the continuation of the epidemic and the rise in raw material prices, the reason why the joint venture brand encounters collective anxiety in China lies more in itself. Dong Yang, vice chairman of the Electric Vehicle 100 Association, stressed in an interview with The China Automobile News that the current Chinese automobile consumer market has undergone great changes, product technology, product development, sales, and even application models are changing, especially after the Internet of Everything, requiring fundamental changes in automotive product development, and the joint venture brand is obviously insufficient in this regard. Over the years, the joint venture brand in China has been following the strategy of introducing mature products from foreign parties in foreign markets, domestic production and then market sales. Although these models that have achieved good sales in foreign markets are not bad in terms of traditional performance of automobiles, the performance is obviously unsatisfactory compared with the rapid upgrading and change of China's automobile consumer market, and it is natural to gradually show fatigue.
Fu Bingfeng, executive vice president and secretary general of the China Association of Automobile Manufacturers, said that the current Chinese auto market is under full pressure, and sudden factors such as the epidemic and the Conflict between Russia and Ukraine have brought about insufficient supply, while supply-side problems such as tight chip supply and rising raw material prices have also put a number of car companies under pressure. Among them, joint venture brands face greater competitive pressure. Some joint venture brands that have achieved a large market share in the Chinese market in the past have even fallen into the situation of stopping production and selling factories. But this kind of competition is inevitable. In the fierce market competition, those enterprises that fail to keep up with the market demand and make changes in a timely manner will inevitably face elimination, and the joint venture brand will not be spared, and even some joint venture brands may take the lead because of the ship's difficulties and fail to make a rapid and effective response.
At the same time as the products are transformed into intelligent and networked, the current marketing model and application mode of China's automotive market have also undergone great changes. The direct operation model represented by Tesla is changing the car purchase and car habits of Chinese consumers, and the sales and after-sales service of car manufacturers are also undergoing fundamental changes, and even user-oriented car companies such as Weilai are more considered by consumers in order to help car companies achieve better sales. In China, the model of car companies and users growing together and co-building has become a new "popular color", which is accepted and favored by more and more Chinese consumers, especially young consumers. Consumers hope to be deeply involved in the development and production of automotive products, co-construction and common growth with automotive products and brands, not only to buy a car, to complete a car consumption to end the connection with car companies, but also to deeply participate in the growth of the brand and enrich the life of the car. These are exactly what joint venture brands lack.
At present, joint venture brands in China still rely heavily on the brand system established over the years, the brand tone has remained unchanged for a long time, and the product positioning has been solidified, and almost no adaptive adjustments have been made to the characteristics of the Chinese market. Even if some joint venture brands have established R&D centers in China, they are constantly making some changes to the characteristics of China's young automobile consumption, but subject to the long decision-making and research and development cycle of multinational car companies, it is difficult for these joint venture brands to make rapid changes in response to changes in the Chinese market. Cui Dongshu, secretary general of the National Passenger Car Market Information Association, attributed the current sales performance of the joint venture brand in the Chinese market to "unsatisfactory water and soil". The model of domestic production and sales of foreign mature models introduced by joint venture brands is no longer suitable for the rapid changes in China's automobile consumption market, and sales will naturally encounter tests.
The shortcomings of new energy vehicles are even worse
"The joint venture brand is obviously underprepared in the field of new energy vehicles." As Dong Yang said, China's quarterly sales of new energy vehicles have reached the level of one million. The latest data show that in March, the penetration rate of new energy vehicles in China's new car market has reached 19.3%. At present, China's new energy vehicle market is mainly the world of independent brands, and it is difficult for joint venture brands to compete with independent brands in the new energy vehicle market. Not only has the monthly sales of a number of new car-making forces have broken through the 10,000 mark and become the norm, BYD's monthly sales of new energy vehicles have approached the 100,000 mark. While independent brands continue to expand their advantages in the new energy vehicle market, the shortcomings of joint venture brands in the field of new energy vehicles are more obvious.
Judging from the sales data on the market side, among the many joint venture brands, only BMW and Volkswagen have taken the lead in making better responses in the field of new energy vehicles. Among them, BMW Brilliance is one of the first joint venture brands to open the marketization of new energy vehicle products in China. According to the data released by the BMW Group, in 2021, BMW's new energy model sales exceeded 48,000 units, an increase of 69.6% year-on-year. Among them, the pure electric BMW iX3 sold more than 21,000 units in the first full sales year. Since 2014, the BMW Group has delivered nearly 140,000 new energy vehicles in China. Thanks to its early start in the field of new energy vehicles, BMW has not only achieved a steady increase in sales in China, but also its new energy vehicle strategy has also profoundly affected its development in the Chinese market. It is understood that in 2022, BMW will launch 7 new energy products in the Chinese market, including 5 pure electric models, innovative BMW iX, innovative BMW i4, BMW iX3, pure electric BMW 3 series, a pure electric flagship, and 2 plug-in hybrid models.
Unlike BMW's one step ahead in new energy vehicles, Volkswagen's new energy vehicle strategy in China's joint ventures is slightly later, but because of its timely localization transformation, it has also achieved good results. According to data released by Volkswagen Group, Volkswagen Group China and its joint ventures delivered a total of 754,000 vehicles in Chinese mainland and Hong Kong in the first quarter, down 23.9% year-on-year. Among them, the cumulative sales of new energy vehicles reached 38,700 units, an increase of 67.3% year-on-year, including more than 27,100 ID. family models. After increasing the shareholding ratio of Volkswagen Jianghuai Joint Venture, Volkswagen's new energy vehicle strategy in China has received stronger support, not only the ID. series of products has been recognized by Chinese consumers, but also the new energy models of the Sihao brand are quietly occupying the market. Moreover, Volkswagen's new energy vehicle strategy in China is also accelerating. At the beginning of this year, the Audi FAW new energy vehicle project was launched after approval, and the new electric vehicle plant in Changchun will start construction, which is scheduled to be completed by the end of 2024, with an annual production capacity of 150,000 units.
In fact, in addition to BMW and Volkswagen, the new energy vehicle strategy of other multinational car companies in China joint ventures is obviously lagging behind a lot, not only does it not have mature new energy vehicle products, but also the planned new energy vehicle strategy lag is also very obvious. Dong Yang believes that the special chassis for new energy vehicles is of great significance to the development of new energy vehicle products and technological upgrading. Taking the domestic mainstream new energy vehicle brand as an example, in the era of "oil to electricity", the mileage of the relevant pure electric vehicle models can only be maintained at 200 to 300 kilometers, and after the emergence of the special chassis for new energy vehicles, the mileage of the relevant pure electric vehicle models can jump to 500 to 600 kilometers. Even after deducting factors such as the increase in battery energy density, the role of the special chassis for new energy vehicles on technological improvement is very obvious. At present, most of the new energy vehicles of joint venture brands are still in the "oil to electricity" stage, and it is naturally more difficult for their products to obtain good market sales. "Multinational car companies are not unprepared in the field of new energy vehicles, but the rapid market-oriented application of New Energy Vehicles in China has accelerated the process of global new energy vehicles for five to ten years." At present, these multinational car companies are slightly deficient in the field of new energy vehicles, and the performance of joint venture brands in China in the field of new energy vehicles is relatively weak. Dong Yang said. In the process of rapid marketization, new energy vehicle related technologies are rapidly iterating, and it is not so easy for joint venture brands to catch up with the development of independent brand technology in the field of new energy vehicles at once, even if they are now accelerating the pace of new energy vehicles in China, it will take a certain amount of time.
In the past two years, there have been concerns inside and outside the industry that once the joint venture brand begins to fully launch the new energy vehicle strategy in China, it may have a great impact on the mainstream domestic new energy vehicle brands. However, from the current market performance, it is very difficult for the joint venture brand to gain a place in China's new energy vehicle market. On the one hand, this is related to the first-mover advantage accumulated by independent brands in the field of new energy vehicles. In general, the technical level of independent new energy vehicle companies has reached the world-class level, and the joint venture brand does not have obvious advantages in the field of new energy vehicles; on the other hand, it is also related to the rapid changes in the new energy vehicle market. While the technology of new energy vehicles is rapidly upgrading and iteration, the business model is also constantly innovating. New energy vehicles, whether it is the vehicle itself, or the use scenarios, including marketing, are obviously different from traditional fuel vehicles. China's local independent new energy vehicle enterprises have accumulated rich experience and have an innovative management model emerging, and if the joint venture company wants to be closer to the local market demand, it is difficult to see immediate results by building several local R&D centers.
If the joint venture brand wants to have a better market performance in China, it not only needs to make changes to the traditional brand concept and management model, but also needs to speed up the pace of new energy vehicles and other aspects, and perhaps end the current state of anxiety faster.
Text: Wang Jinyu Editor: Guo Chen Layout: Liu Xiaoye