Wen 丨 Aotou Finance Ning Xiaomin
Apprentice丨Li Lin
Recently, Wuling Motors (00365. HK) announced that the Hongguang MINI EV family will drop by 13,000 yuan and start at 29,800 yuan.
For this price reduction, Wuling's official explanation is to respond to the call of the state to encourage new energy vehicle companies to support the purchase and use of new energy vehicles in rural areas, and "fire the first shot of new energy vehicles to the countryside".
But in fact, the price reduction and the focus on the rural market behind or the sales anxiety of the Hongguang MINI EV.
As a leader in the new energy mini vehicle market, Hongguang MINI EV previously won the title of "National Scooter" with an ultra-low price of 28,800 yuan, and its sales have soared, and even won the global micro electric vehicle sales champion in 2022.
However, then competitors rushed into the new energy mini vehicle market, coupled with the continuous price war between car companies, Hongguang MINI EV sales showed a continuous decline.
According to the data, in the first quarter of 2023, Hongguang MINI EV sales fell by more than 20% year-on-year, and in April, sales fell further to less than 20,000 units, a year-on-year decline of 27.4%.
How to maintain competitiveness in the more involuted new energy mini vehicle market and continue to gain the favor of users has become a must-answer question for Hongguang MINI EV.
The price that can't go up
As a leading brand in the field of new energy mini vehicles, the Hongguang MINI EV initially attracted many consumers with its low price and practicality.
According to public data, since its launch in July 2020, the cumulative sales of the Hongguang MINI EV have exceeded 1.1 million units, ranking first in the sales of pure electric vehicles of Chinese brands for 28 consecutive months, with monthly sales reaching 50,600 units. In 2022, Hongguang MINI EV sold a total of 554,000 units, contributing nearly one-third of SAIC-GM-Wuling's sales.
Under the rapid growth of sales, Hongguang MINI EV has said that it is trying to increase the price of its products. In March last year, the price of the Hongguang MINI EV increased by CNY 4,000-8,000 to CNY 32,800 due to the continuous sharp rise in raw material prices.
However, consumers in this field are more price-sensitive, and it is likely that the choice target will be changed because of a thousand yuan, not to mention such a large price increase. Soon, the price of the price increase became apparent. According to data from the Passenger Association, in the fourth quarter of 2022, Hongguang MINI EV sales fell by 13.8%, 20.8% and 31.7% year-on-year, respectively, month-on-month.
In the context of declining sales and the announcement of price reductions by most new energy vehicle companies, since 2023, Hongguang MINI EV has repeatedly chosen to reduce prices, and the starting price has been reduced to 29,800 yuan. Aotou Finance noted that from January 30 to March 31, the price of Hongguang MINI EV was reduced to 29,800 yuan.
Recently, it has begun a new round of price cuts in an attempt to attract the attention of consumers.
Specifically, the models participating in the price reduction include four models, including the Wuling Hongguang MINI EV and Wuling Hongguang MINI EV Play and Play Coffee, as well as the Air EV four-seater and two-seater versions.
In terms of specific price reductions, the Wuling Hongguang MINI EV was reduced by 3,000 yuan, while the four models of the Café and Play models were uniformly reduced by 6,000 yuan. In contrast, the decline of the Air EV is even greater, with the price reduction of 1-13,000 yuan for the whole series.
After going around in circles, the Hongguang MINI EV seems to have returned to the original point, with a starting price of only 1,000 yuan higher than the initial 28,800 yuan, and sales have become the "baton" of its price change.
The reasons affecting the sales of the Hongguang MINI EV may be multifaceted. From the consumption level, it will take time for consumers' consumer confidence to recover.
From the perspective of market competition, the competition of domestic independent brands has intensified, and the market competition has become more intense, making Hongguang MINI EV lose its original competitive advantage.
In addition, the expiration of national new energy subsidies and the ongoing price war have further reduced the profit margins of the Hongguang MINI EV, making it difficult to maintain high sales. At the same time, consumers are beginning to understand some of the problems of the Hongguang MINI EV, such as the decline in winter endurance and insufficient safety equipment, which may also lead to a weakening of consumer interest in the car, which in turn affects the purchase.
Increasing competition
Putting aside the problem of declining expenses, there is another practical problem in front of the Hongguang MINI EV, that is, the competition on the track is becoming increasingly intense.
With the boom in the new energy mini vehicle market, more and more of the same products have emerged, such as Changan Benben E-Star, Chery QQ ice cream, Ora White Cat, Black Cat, Nezha V, Leap T03, etc., these products have the characteristics of being small, affordable and suitable for urban travel.
In addition, the emergence of A0-level electric vehicles such as BYD Seagull, BYD Dolphin, MG Magnolia, and Ora Good Cat provides higher endurance, richer configurations, and moderate prices, which are not lower than Hongguang MINI EV in terms of cost performance, eroding the mini vehicle market where Hongguang MINI EV is located to a certain extent.
While facing fierce competition, the external environment is not friendly, and consumers' attention is gradually shifting to other fields.
According to data from the China Association of Automobile Manufacturers, in the first quarter of this year, the sales of pure electric models were 1.08 million units, a year-on-year increase of 13.2%. Among them, the sales of A00-class cars were 131,000 units, a year-on-year decrease of 55.1%. Sales of pure electric vehicles above A0 level were 949,000 units, a year-on-year increase of 43.4%.
For SAIC-GM-Wuling, the decline in sales of Hongguang MINI EV may mean that the competitiveness of its main products has declined, and it needs to find new growth points. At this time, it may need to further improve the product quality and user experience of the Hongguang MINI EV, strengthen safety equipment, improve endurance performance, etc., to enhance consumer recognition of the model.
In addition, more competitive new energy models will be launched to enrich the product line and meet the different needs of consumers. At the same time, increasing the research and development and application of intelligent and connected functions to enhance the added value of products may also be an important way for Hongguang MINI EV to enhance its competitiveness.
In fact, Wuling has also been trying, for example, successively launched a higher version of the Hongguang MINI EV Macaron version, GAMEBOY version, Hongguang MINI EV convertible version and the overall higher price KiWi EV. However, these high-configuration models also cost more, which may not be a good choice for consumers who buy Hongguang MINI EV for cost-effectiveness.
Obviously, changes in the market environment, including intensified market competition, consumer awareness of product problems, and the adjustment of new energy subsidy policies, remind SAIC-GM-Wuling that it needs to carefully analyze the market situation and take corresponding measures to enhance the competitiveness and sales of Hongguang MINI EV to maintain market position and growth potential.
According to a domestic new energy vehicle market report released by QuestAuto in February 2023, users under the age of 30 account for 26.8%, users in third-tier cities and below account for 70.3%, and active users in Liuzhou, Luoyang and Zhengzhou respectively account for 4.6%, 1.7% and 1.7% respectively.
So how much new increment this price reduction can bring to Hongguang MINI EV and help consolidate its leading position in the new energy mini vehicle market remains to be verified.