MINI EV is gradually "out of favor", can Wuling Hongguang still have the next "god car"?

Image source: Pixabay

The Wuling Hongguang MINI EV, which used to sell 40,000 or 50,000 units a month, now seems to have encountered a growth bottleneck.

According to data from the passenger association, from January to April this year, the sales of Hongguang MINI EV were 16,416 units, 30,267 units, 23,159 units, and 18,086 units, respectively, which was much inferior to the past.

Behind this is the slowdown in the growth rate of China's new energy vehicle market. In the first quarter of this year, the cumulative retail sales of new energy vehicles nationwide reached 1.319 million units, a year-on-year increase of only 15%, the lowest quarterly increase since 2020.

In response, Wuling announced the launch of the "Easy Call" car purchase service for Hongguang MINI EV, which is the familiar battery monthly rental plan, with a down payment of 19,800 yuan and a battery price payment for 5 years and 60 months, starting from 198 yuan per month.

As we all know, although Wuling Hongguang MINI EV has excellent sales, it has always been a shortcoming in terms of profitability.

Therefore, when the market changes, instead of paying too much attention to sales itself, it is better to polish yourself, reshape product strategy, and get rid of the past model of low price volume.

1. Growing pains

According to the Passenger Association, Wuling Hongguang MINI EV sales in April were 18,086 units, down 27.4% y/y. Although it still ranks fourth in the sales list of new energy cars in a single month, and far exceeds the second place Panda MINI (sales of 10,615 units) in the A00 class market, it is still difficult to hide the current situation of a sharp decline in sales.

In fact, from January 31 to March 31 this year, Wuling Hongguang MINI EV launched a promotional campaign, and the price of the Hongguang MINI EV, which was originally sold from 32,800 yuan, was reduced by 3,000 yuan, and the price of other models remained unchanged.

However, the effect of this promotion is not obvious. In the first three months of this year, Wuling Hongguang MINI EV sales were 24,936 units less than in the same period in 2022. In particular, in March this year, sales of the Wuling Hongguang MINI EV decreased by 44.8% y/y.

In fact, the decline of the Wuling Hongguang MINI EV was reflected at the end of last year. Sales in October last year fell 13.8% y/y to 41,255 units, and sales in November and December fell by 20.8% y/y and 31.7% y/y, respectively.

As we all know, the end of last year is an important car purchase window period before the new energy vehicle refund, and it is also an important time point for the marketing efforts of major new energy vehicle companies, and the sluggish situation shown by Wuling Hongguang MINI EV in the most important fourth quarter of last year seems to indicate that this car is falling from the altar.

It should be noted that since its launch in July 2020, the cumulative sales of the Wuling Hongguang MINI EV have exceeded 1 million units. Last year, Wuling Hongguang MINI EV won the global sales champion of small pure electric vehicles in 2022 with 554,000 units, and contributed nearly one-third of Wuling Motors' annual sales.

Why has the sales of the former "god car" declined in recent months? "Rim Visibility" believes that the reasons can be mainly attributed to the following points:

First of all, from a policy point of view, since the beginning of this year, the new energy subsidies have been officially canceled, and the consumer groups that buy Wuling Hongguang MINI EV are the most price-sensitive consumers, and the price increase of several thousand yuan after the subsidy is canceled will undoubtedly have a greater impact on consumer demand.

Secondly, with the sharp reduction in the price of fuel vehicles since the beginning of this year, the price of naked cars with high-end configurations of entry-level models of many independent brands and joint venture brands has been able to fall in the range of 60,000~80,000 yuan, and Wuling Hongguang MINI EV's play model, play coffee model, racing ranger limited edition, urban chasing limited edition form the same price competition, even cheaper than the convertible version.

At a similar price, fuel vehicles are far superior to small pure electric vehicles in terms of comfort and technology. Therefore, the sharp price reduction of fuel vehicles this year has also robbed some potential consumers of Wuling Hongguang MINI EV.

Finally, the increase in competitors of the same type may also be a major reason for the decline in sales of Wuling Hongguang MINI EV. The popularity of Wuling Hongguang MINI EV since its launch has allowed many car companies to see that the original A0 and A00 models still have a huge market in China, so many car companies have extended new energy models to this field.

Nowadays, in the field of mini vehicles, consumers' choices are gradually increasing, such as Panda MINI, Changan Lumin, Leap T03, Chery Little Ant, Baojun KiWi EV, etc., all of which have formed competition and diversion with Wuling Hongguang MINI EV.

The change in the external environment has caused Wuling Hongguang MINI EV to suffer growth pains.

2. What did you do right?

To understand how to get out of the predicament, we must first understand the logic of the success of the Wuling Hongguang MINI EV.

"Car Rim Visibility" believes that the fundamental reason why Wuling Hongguang MINI can become a generation of "divine cars" is to solve the needs of the people and catch up with the dividends of the times.

It has to be said that Wuling Motors, with the slogan "What the people need, Wuling will build", is indeed superior in terms of insight into Chinese consumer behavior, especially the needs of the most ordinary grassroots groups.

In fact, when domestic new energy vehicles were just beginning to rise, the micro electric vehicle market also experienced an era of "a hundred flowers". However, at that time, in order to obtain subsidies, most car companies set the range of mini vehicles at about 300 kilometers, and the price after subsidies was about 60,000 yuan, which was not cheap.

It was not until the emergence of Wuling Hongguang MINI EV that the threshold of micro electric vehicles was lowered to less than 30,000 yuan. So what needs can this upgraded version of "Old Man's Music" solve the people?

According to public information, the number of cars in mainland China has reached 320 million in 2022, with about 226 cars per 1,000 people. Although this number has increased nearly tenfold in the past 20 years, it is still far from that of developed countries such as the United States and Japan.

Geography aside, a large part of the difference is due to the large gap in purchasing power between Chinese and developed country consumers.

According to data released by the National Bureau of Statistics, the per capita disposable income of urban residents in mainland China will be 49,300 yuan in 2022, and the per capita disposable income of rural residents will be 20,100 yuan. This means that even if you buy an entry-level model of about 60,000 yuan, a rural resident needs to spend nearly 3 years of income.

Therefore, the Wuling Hongguang MINI EV, which costs less than 30,000 yuan, solves the real needs based on the background of "600 million people with a monthly income of only 1,000 yuan" in 2020.

Not only that, the support of the policy has also added another fire to the sales of Wuling Hongguang MINI EV. In November 2018, the Ministry of Industry and Information Technology issued the Notice on Strengthening the Management of Low-speed Electric Vehicles, requiring clean-up and rectification of low-speed electric vehicle production and sales enterprises and strictly prohibiting new production capacity.

The so-called low-speed electric vehicle is the four-wheeled electric vehicle that we often see without a license and a driver's license, commonly known as "old man Le".

In the year when the policy was introduced, data from the Shandong Automobile Industry Association showed that Shandong alone had more than 3 million "old man music" vehicles. Reading Automobile, which filed for bankruptcy this year, sold 287,000 "Old Man Le" in one year that year, which shows that before the introduction of the policy, the owner of low-speed electric vehicles had a huge sinking market.

After the introduction of the policy, the Wuling Hongguang MINI EV, priced at less than 30,000 yuan, perfectly undertook the replacement needs of "Old Manle". Especially for people in some areas, switching from "Old Manle" to Wuling Hongguang MINI EV means that there is no need to play the game of "peek-a-boo" with the traffic police all day.

It can be said that the success of Wuling Hongguang MINI EV has its own cost-effective advantages, and it is inseparable from the specific era background.

3. How to break the game?

Of course, the price of over-reliance on the sinking market is that the profitability of Wuling Hongguang MINI EV is worrying.

Japan's Nagoya University once dismantled a 38,800 yuan Wuling Hongguang MINI EV, they estimated that the cost of this car is about 26,900 yuan, and the profit of the bicycle is only 88 yuan. And in the process of dismantling, they also found that in order to reduce costs, Wuling Hongguang can be described as "doing everything it can", replacing the water cooling of battery cooling with air cooling, cheap consumer-grade products for semiconductors, and cutting off the energy recovery system and so on.

Although the greater value of Wuling Hongguang MINI EV to SAIC may lie in balancing double points, for any car company, it is not of much significance to rely on less profitable models for a long time, and in the current situation of declining double credit prices.

Therefore, in order for Wuling Hongguang MINI EV to play a greater value, Wuling seems to need to change its thinking and not only rely on the low-cost business model of the past.

In fact, at this point, Leap Car has long explored the way for Wuling Hongguang.

Like many new forces, Leap was not paid attention to at first, and it was not until 2020 that Leap T03, an A00-level model priced at less than 100,000 yuan, slowly entered the field of vision of consumers.

Taking last year as an example, Leap T03 sold more than 7,000 units in April a month, and the sales volume in the remaining months also fluctuated by 5,000~6,500 units, often accounting for half of the entire brand.

Zhu Jiangming, the founder of Leapmotor, also did not shy away from saying that the hot sale of T03 has won the trust and cognition of users to some extent.

With the opening of the user market with T03, Leap has successively launched a higher positioning C series models - Leap C11 and Leap C01, priced at 149,800~239,800 yuan and 149,800~286,800 yuan respectively. In the past April, the sales of Leap C series models accounted for more than 80%, and Leap once again returned to the top three positions of new forces.

It can be seen that relying on the A00-level model to open up market awareness, and when mature, push the boat to launch mid-to-high-end series models, this road can go through.

Wuling Hongguang is not without efforts, for example, last year, the launch of Wuling Hongguang MINI EV convertible version, which became popular in social circles for a while, and was once labeled as "dream love car" and "baby bus", which was deeply loved by female consumer groups.

However, "Car Rim Visibility" believes that Wuling Hongguang's brand upward path should not stop here, but should increase the creation of intelligence, especially in product design, and should be inclined to the current young generation of consumers, pursuing a more exquisite and high-end experience.

At present, a set of Wuling Hongguang's new "dessert sports car" series design drawings have been exposed on the Internet, with a more coupe-like appearance, which has attracted the attention of many netizens. However, the design drawings do not disclose the interior part, and the level of intelligence is unknown.

Of course, if the price of mid-to-high-end models exceeds the expected range of ordinary consumers, it seems to be contrary to Wuling's slogan "what the people need, Wuling will build". Wuling also needs to more carefully explore the balance between brand upward and cost.

Author | Ancient Moon

Source | Car Visibility

END