At the Shanghai Auto Show on April 19, 2017, Tesla appeared on the same stage as China's new power disciples, questioning and negativity, they have not yet caused panic among the old aristocrats; Zotye threw out the "Fengshen" Wang Bomb - almost perfectly reproduced Porsche Macan's Zotye SR9, which attracted the eyebrows of Porsche executives at the auto show site; Geely's high-end brand Lynk & Co appeared on the "Geely Lynk & Co Night" the night before the auto show, and a group of foreign journalists tried to understand where this new brand came from...
The auto show sounded the prelude to great changes, the Chinese auto market was full of twists and turns, and foreign brands had to "quietly" send their R&D teams at the Shanghai Auto Show to deeply analyze the progress of Chinese auto brands.
China Brand Day logo
20 days later, on May 10, the State Council approved the establishment of the first celebration of the "China Brand Day". Miao Wei, then minister of industry and information technology, published a signed article entitled "Treat every day as a "Chinese Brand Day"", pointing out that the brand is the carrier of value and credibility, and this process is like a "thrilling jump" for Chinese brands.
Five years later, whether Chinese auto brands have achieved a key leap in brand upwards, different people have different understandings. According to the terminal sales data from January to March this year, the market share of Chinese brands has expanded to 42.9%. Consumers' increasing recognition of Chinese auto brands has become an indisputable fact.
"The biggest challenge facing Chinese brands is still the joint venture car companies, and we have not yet reached the premium capacity of foreign brands. In the long run, brand transformation is a very difficult process," Zhu Huarong, chairman of Changan Automobile, has repeatedly said in public. It is foreseeable that when the Chinese auto market is bound by "micro-growth", the competition between Chinese brands and foreign brands will be a white-knife battle between narrow roads.
#上
Whose share have Chinese auto brands taken?
All Chinese brands miss 2017, and when the boom in small-displacement purchase tax reduction policies and SUV products has not faded, there are no signs of bankruptcy in brands such as Zotye, BAIC Phantom Speed, Haima and Lifan. That year, Zotye even ranked among the top ten Chinese brand sales with annual sales of more than 230,000.
The collapse seemed to be overnight. Since the beginning of 2018, domestic new car sales have grown negatively for three consecutive years, and Chinese brands on the verge of bankruptcy have become a negative factor dragging down the car market. In 2019-2020, in the relatively sluggish auto market environment, the market share of Chinese brands fell into the lowest level in recent years.
At that time, the overall impact of joint venture car companies was much smaller than that of Chinese brands. Both Ashkenazi and Japanese brands have ushered in market share growth, especially the three major Japanese brands Honda, Toyota and Nissan have entered the "heyday era" in China. Whether it is the absolute sales data or the growth rate, it has outperformed the market.
In the past three years, the sales of mainstream car companies have risen and fallen. Among them, the Sales of the Volkswagen brand in China fell by more than 930,000 vehicles, and Hyundai-Kia fell by more than 460,000 vehicles... In the three years from 2019 to 2021, the sales of the 9 joint venture car companies have decreased by 2.17 million units, which brands have eroded this big cake?
Among foreign brands, Toyota has released a number of new cars intensively, and sales have been very stable. Among Chinese brands, BYD and "Wei Xiaoli" have achieved a breakthrough in sales by taking advantage of the east wind of new energy vehicles; Great Wall and Changan have launched a number of explosive models in the past three years, and sales have increased steadily. At the same time, in the camp of luxury brands, FAW Hongqi's sales continued to climb, with sales exceeding 300,000 vehicles in 2021, ranking among the top five in the annual luxury brand sales list, second only to BBA.
From the entry-level to the high-end car market, Chinese brands are eroding the market share of joint venture car companies in all directions. "In recent years, Chinese auto brands have gained more market share in the price range of 120,000-250,000 yuan, and this price range is also the main model price band of joint venture car companies." Cui Dongshu, secretary general of the National Passenger Car Market Information Joint Association, pointed out that in addition, in the field of luxury and micro new energy vehicles, brands such as "Wei Xiaoli" and Wuling have appeared in Chinese car companies. In today's Chinese auto market, the competitive landscape of various market segments is constantly reshaping.
In the past five years, Chinese brands have been constantly attacking the hinterland of joint venture car companies, while also carrying out internal reshuffle. Weak Chinese brands are either wiped out by bankruptcy or silently stepped down and taken over by new car manufacturers. It is not so much that Chinese brands are grabbing the market share of foreign brands, but rather that Chinese brands are constantly breaking the upward ceiling.
#中
The rise of Chinese brand new energy vehicles
The overall auto market bound by "micro-growth", new energy vehicles have undoubtedly become a powerful engine to support sales growth.
Terminal sales data show that in the first quarter of 2022, domestic new energy vehicle sales reached nearly 1.257 million units, of which The terminal sales of Chinese brand new energy vehicles reached 679,000 units, with a market share of more than 50%. In the sales ranking of new energy manufacturers in the first quarter of this year, BYD surpassed Tesla, which ranked second with 108,300 sales, with sales of 282,000 vehicles.
New energy vehicles are not only an opportunity to overtake in curves, but also an excellent opportunity for Chinese brands to break through upwards. Looking back at the era of fuel vehicles, Chinese brands' attempts to impact the high-end are often not satisfactory. In 2009, Chery cooperated with Israel Group to launch two high-end brands, Ruiqi and Weilin. In 2014, Beiqi Foton acquired the Borgward brand and tried to break into the BBA to form a "BBBA" combination. The end is obvious, and they all end in failure.
Even Yin Tongyue, chairman and general manager of Chery Automobile, can't help but feel that brand transformation is not easy, if the brand is a river, all Chinese brands have not reached the other side of the river. In the era of fuel vehicles, Chinese brands are helpless in the face of technical barriers for foreign brands. In the era of new energy vehicles, the pattern has changed, and the rise of new energy vehicles is stirring up the high-end car market.
Source: Multiplying Association
In the first quarter sales data of the association, the sales list of high-end SUVs (starting at more than 300,000 yuan) in March: Model Y won the championship with sales of nearly 40,000 vehicles, and fuel models collectively declined. In addition, Ideal ONE, NIO ES6, and NIO EC6 ranked among the top 10 high-end SUV sales in March, and all showed positive year-on-year growth. In terms of high-end cars, although there is no new energy vehicle in the top ten rankings, except for the BMW 5 Series, Mercedes-Benz E-Class and Jaguar XFL, the sales of other models have shown different degrees of year-on-year decline.
It can be seen that new energy models are gradually penetrating the high-end SUV market, which has caused a great impact on traditional high-end fuel vehicles. The new power brand is becoming the "vanguard" of Chinese brands to impact the high-end market. Nowadays, Chinese brand car companies are gradually increasing their new energy offensive, and high-end brands such as Geely's Extreme Kr, SAIC's Zhiji, Changan's Avita, ANDD's Denza are preparing to develop.
#下
Break through the price ceiling
Price is the cornerstone of supporting the upward movement of Chinese brands, as Chinese brands continue to march towards high-end, the luxury car market has gradually gained the presence of Chinese brands. Statistics from the Autohome Research Institute show that in 2021, the annual sales of more than 200,000 vehicles of Chinese brands will exceed 900,000. Among them, Chinese brand new energy vehicles of more than 200,000 yuan accounted for 54%
In the past few years, joint venture car companies have further lowered the price threshold by reducing the positioning of sub-brands or launching low-end sub-brands, thus squeezing the living space of Chinese brands. For a long time, 100,000 yuan was considered the "price ceiling" of Chinese car brands, and now this perception has been completely reversed.
Li Xueyong, deputy general manager of Jietu Automobile and general manager of the marketing center, has a deep feeling for the upward movement of Chinese brands, and he mentioned in his exchange with the car market that the average selling price of the Jietu brand has risen from 92,000 in 2018 to 125,000 yuan this year. "We are pleased to see that more and more Chinese consumers recognize Chinese car brands, which has led to a golden period in the development of Chinese brands. I can confidently say that in the price range of 150,000 yuan or more, the product strength of Chinese brands can be comparable to that of joint venture models. ”
The primary factor supporting the price breakthrough of Chinese brands is the improvement of product strength. J.D. POWER China Vehicle Reliability Research data shows that the gap between Chinese brands and mainstream foreign brands has narrowed from 9 PP100 (problems per 100 vehicles) in 2020 to 6 in 2021. The average and above level of the PP100 mainstream car industry has increased from 6 Chinese car companies in 2020 to 10 in 2021.
While improving quality, Chinese car companies have expanded their territory in the high-end new energy vehicle market by virtue of their industrial advantages accumulated by electrification and intelligence. For example, BYD, which is "bottom-up", has launched corresponding high-end models while occupying the low-end market through cost-effective models to achieve full coverage of the high-end and low-price ranges. On the other hand, traditional OEMs such as BAIC, GAC, Changan and Huawei have carried out cooperation on intelligence and autonomous driving and launched high-end products.
According to the 2021 financial report data, BYD surpassed SAIC Volkswagen for the first time with an average bicycle price of 153,200 yuan. As a benchmark for Chinese joint venture car companies, SAIC Volkswagen has long occupied the sales champion in the domestic market. In the past year, BYD has surpassed SAIC Volkswagen in both sales and bicycle prices, and the meaning behind it is self-evident: the upward path of Chinese brands is clear and unstoppable.
"Electrification and intelligence are excellent tracks for Chinese brands to break through, and this window period may only be 3 years and 5 years." In the first stage of electrification, the competition is sales, and there is no basis without sales. Wei Xiaoli, BYD, GAC E-An and other car companies have already 'run out' at this stage, and I believe that with the understanding of Chinese users accumulated by Chinese brands in the past few decades, there will be more Chinese car companies that stand out. Automotive industry analyst Ji Yongfeng said.
As the sixth China Brand Day is approaching, Chinese car companies have handed over the answer sheet of brand upwards. As Wei Jianjun, chairman of Great Wall Motors, said, it is necessary to make Chinese cars break through with excellent quality and innovative technology and become a trump card made in China.
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