Domestic million-dollar luxury cars frequently appear: hard and rigid joint ventures are not easy, and the conversion rate of 10% of the order volume is very good

Tencent News "High Beam" by Liu Kanshun

On the evening of September 1, at the scene of the 2023 Extreme Krypton Evolution Day, the appearance of the domestic pure electric supercar Extreme Krypton 001FR directly detonated the enthusiasm of the audience. It not only made a tank U-turn in situ with four-wheel independent electric drive and ZVC four-wheel independent vector control technology on the spot, but also demonstrated on-board satellite communication technology, and the important thing is that the Tesla Model SPlaid, which is priced at more than 1 million, is being named throughout the process, and shows a direct and rigid posture with real force.

This may mean that domestic pure electric performance vehicles have been able to "wrestle" with international manufacturers in a number of indicators.

According to official sources, the price of Extreme Krypton 001 FR is more than one million, claiming to break the monopoly on the performance of tens of millions of sports cars.

Subsequently, on September 20, the Yangwang U8 luxury version with a price of 1.098 million yuan was officially launched;

On September 26, MGCyberster, the world's first pure electric sports car with scissor doors + soft top convertible, opened for pre-order;

On October 9, the mass production of the million-class Chinese sports car - Haobo SSR was launched and delivered;

In the next fourth quarter, NIO plans to launch its own "Maybach" sedan on the NT3.0 platform - NIO ET9 (name undecided);

Also in the fourth quarter, Yangwang is expected to launch a million-yuan pure electric supercar - Yangwang U9.

……

A series of big deals by these car companies seem to be showing that 2023 is the first year of the departure of Chinese brand million-dollar luxury cars. Looking at the current Chinese car companies, whether it is Yangwang, NIO, Extreme Krypton, or Haobao, everyone is using innovative technology to demonstrate the strength of Chinese brands in the field of new energy vehicles, and firmly attack the high-end market.

It can be said that in today's pure electric era, the innovative technology of Chinese car companies has broken the advantages of traditional luxury brands, but the latter is still strong in terms of brand influence and cultural heritage. Therefore, how to tell the brand story well and create a high-end brand image is undoubtedly an urgent need for Chinese car companies.

Break the million-dollar ceiling with new technology

During the rapid development of China's automobiles, domestic cars were divided into five categories: mini cars, small cars, compact cars, medium cars, and medium and large cars. Among them, the market of mini cars is completely dominated by Chinese brands, and there are also Chinese brands (mainly low-end grades) in the hot-selling models of small cars and compact cars, but as long as they rise to the two markets of mid-size cars and medium-sized and large cars, Chinese brands are somewhat inadequate.

In particular, mid-size cars have always been the "dead end" of Chinese brands. Whether it is the Ruich G6 launched by Chery in the early days, the Ruicheng launched by Changan, or the Roewe 950, GAC Trumpchi GA6, etc., and even Geely Borui and FAW Besturn B70, which can barely step on the "heel" of the joint venture brand that year, these domestic heavy-duty vehicles still lack competitiveness in front of the top three Japanese (Camry, Accord, Ethereum) and the German Volkswagen Passat/Magotan . At that time, some media pointed out that Chinese brands could not build best-selling mid-size cars, in addition to the backwardness of the three major technologies, it was also an objective response to the competitiveness of the enterprise system.

And this phenomenon is also happening in the SUV market. In the small SUV and compact SUV market, Chinese brands can create a hot-selling model that sells more than 10,000 a month, but once it comes to mid-size SUVs, it becomes a miracle that it sells more than 1,000 a month. Of course, this is also related to the fact that mid-size cars were mainly for the public and commercial market at that time, after all, this level has a higher recognition of brand value.

In the high-end market, it is even more difficult to see Chinese brands. In the ranking of million-yuan luxury car sales in 2022, the top ten are still covered by Mercedes-Benz, Porsche, BMW, Land Rover and other car companies.

Now, at the critical point in the era of fuel vehicles turning to electric vehicles, Chinese car companies have finally ushered in the window period of relying on electrification technology to build a high-end market.

At the Shanghai Auto Show in April 2023, BYD took the lead in launching the high-end brand - Yangwang, which not only successfully attracted European car fans to fly to "look up", but even domestic car fans who want to get close and close need to queue up for admission. The first model, the Yangwang U8, was officially launched on September 20, and the luxury version was priced from 1.098 million yuan, successfully allowing the Chinese brand model to enter the million-level luxury club.

Looking up at the U8 can touch the million-level ceiling, mainly thanks to the advanced and novel technology of the model, including Yi Sifang, Yunji intelligent body control system, independent research and development of carbon fiber cockpit and other technologies, all of which are industry-leading.

Chinese car companies that choose to hit the high-end market with innovative technologies are still particularly numerous this year. For example, in September, GAC AION also launched a new high-end brand - Hyper Haob. Subsequently, on October 9, Haobo SSR was officially launched, and three versions of models were launched, with a price range of 1.286-1.686 million yuan, and achieved listing and delivery.

For example, the highest price of NIO's products on sale has risen to 600,000 yuan, further shortening the gap between it and Mercedes-Benz's main sales models, but the ET9 that will be launched in the future will also take a big step up at this price point; MG's first sports car Cyberster, with scissor doors + soft top convertible, has opened pre-order, planning to seize the market share of the Porsche 718; Extreme Krypton has launched the Extreme Krypton 001FR high-performance version to benchmark Tesla Model S Plaid models.

It is not difficult to see that from the perspective of technical competitiveness alone, the progress of Chinese car companies is very obvious, especially in the era of electrification, which has broken the technical barriers that traditional luxury car brands have created. For Chinese car companies that lack brand history, culture and heritage, hardcore technology is the most competitive weapon to impact the high-end market, and it is also the basic premise for more likely to obtain brand recognition from consumers.

According to the data released by Wang Chuanfu, it took BYD 13 years to go from 0 to the 1 millionth vehicle; 1 million to 2 million vehicles in 1 year; The 2 million to 3 million vehicles took only half a year. The speed growth behind is getting faster and faster, all due to BYD's breakthroughs in core technologies such as Sanden, which makes its major series stand out in sales.

Battle for the "largest single market for Porsche"

The "brand up" promoted by Chinese car companies with this round of technology has won the favor and recognition of consumers to a certain extent, which has been reflected on the pre-sale data of looking up to the U8. Unofficially confirmed/denied data shows that orders reached 13,000 vehicles within 48 hours of the start of pre-sale of the U8, and orders exceeded 30,000 within 20 days of opening pre-sale.

In other words, the value of its backlog of orders has exceeded 30 billion yuan before the U8 has been officially launched and delivered. In contrast, Land Rover Defender, which is also a million-class off-road vehicle, sold only 12,576 units in 2022.

However, some sales analysts told Tencent News "High Beam" that car companies' booking and sales are two different things, taking the U8 as an example, by the end of the year delivery, the 30,000 orders can have a 10% real conversion rate is very good.

After all, million-level pricing and hardcore off-road positioning doom the U8 to be an extremely niche model. Mercedes-Benz S-Class and Porsche Cayenne and other hot-selling million-class luxury cars only sell more than 1,000 units a month.

People in the circle believe that million-level luxury cars themselves are niche market models, limited by the current consumption level and desire to buy cars, in the current economic downturn and the uncertainty of the epidemic environment, in fact, everyone's desire to consume million-level luxury cars is reduced. It is very good to look up to the U8 to maintain monthly sales of 5,000 units in the future, after all, the total sales of million-level luxury cars are not high.

Some consumers believe that in the real high-end SUV player group, they pay more attention to off-road performance, but the demand for the brand is not so high. Looking up to the U8's technical strength has been surpassed, so in the future, it will seize the market of Volkswagen Touareg, Toyota Prado, Land Rover Defender and other models. It is worth mentioning that the influence of looking up to U8 in the Middle East in the future is also very large, I believe that the rich in the region will be ready to move, after all, technically speaking, looking up U8 is more suitable for use in deserts, jungles and other outdoor scenes.

According to foreign survey data, 79.5% of people said that they like luxury car culture because it is a very attractive element in car culture; 63.3% said they were concerned about a particular brand or cultural value; 16.5% of people said that through the topic of luxury cars, they can learn about the lives of rich people and celebrities.

Although it seems that the sales of million-class luxury cars are limited, it is precisely because of the high attention of high-end luxury cars that they also have a sustained growth rate. According to McKinsey's latest report, with the continuous increase of ultra-high-net-worth people (UHNWI), the luxury car market has great potential for growth, and it is expected that by 2031, the luxury car market will expand at a compound annual growth rate of 8%-14%, and the higher the price point, the higher the growth rate.

Yibo, managing director of Jebsen Motors, one of the world's largest Porsche dealer groups, said in a previous media interview, "Statistics from the automotive industry show that in the decade from 2011 to 2021, the compound annual growth rate (compound annual growth rate) of luxury car sales was 12.9%, which was much higher than the 5.8% growth rate of the passenger car market. By 2021, China has been Porsche's largest single market in the world for seven consecutive years. ”

At the launch site of Hyper SSR, Gu Huinan, general manager of GAC AION, said that the successful mass production of China's first supercar Haobo SSR marks that China not only breaks the Western monopoly on supercars, but more importantly, uses supercars as a carrier to comprehensively improve the capabilities of China's automobile industry from the fields of R&D, design, trial production verification, intelligent manufacturing, and industrial chain, and promotes the popularization of automobile sports culture.

It is not easy to really beat Mercedes and Land Rover

Looking back at the years when China's automobile industry has entered rapid development, from the first 10 years to the second 10 years, it can be said that the transformation from industrialization to privatization, automobiles began to be popularized in China, and consumers paid attention to cost performance when buying cars; In the second 10 years, it can be called the development of typical investment logic, relying on technical strength to create explosive models to obtain excess returns; In the next 30 years, the domestic market will usher in a unique era of personalized demand, and Chinese car companies need to take into account the ability to create explosive models and meet personalization, in order to obtain incremental markets in the future.

Although luxury cars that focus on high-end technology are more easily recognized today, technology is always only the basis of high-end luxury cars, and it is the car culture and brand personality that really affects the upper limit.

Zhang Hong, secretary-general of the New Energy Vehicle Branch of the China Circulation Association, also said that at present, with the support of electrification and intelligence, high-end brands are achieving achievements and market shares that have not been seen in the past ten or even twenty years. However, in the process of development, it is also necessary to face up to the competition with overseas brands.

Zhang Hong stressed that the mainland's new energy vehicle industry is about to face competition from wholly foreign-owned car companies and joint venture car companies, such as Tesla, BBA, Volkswagen, Toyota, Nissan, Honda, Hyundai and Kia. Most of these foreign-funded car companies are century-old stores, which have accumulated mature and rich experience in iterative R&D innovation and creating high-end luxury models, with first-class design and manufacturing talents, perfect sales and after-sales service system, long brand history and influence, and tens of millions of loyal fans.

Therefore, once these foreign-funded car companies transform and enter the new energy vehicle industry, they will become the biggest variable in this industry. Not to mention Tesla's success, the transformation of smart is already the best case and proof.

After the cooperation between Mercedes-Benz and Geely, the road of smart comprehensive transformation and electrification is also gradually advancing. Since the first model, smart Genie #1, began deliveries in September last year, nearly 30,000 units have been delivered so far, which is a good performance for a single model. In addition, the first deliveries of the smart brand's new second model, the smart Genie #3, began on June 21.

In general, the technology of Chinese car companies is in place, and they already have the technical strength to stand at the high-end, but how to make up for the shortcomings of brand soft power and marketing capabilities will undoubtedly affect the potential and ability of Chinese car companies to rush to the high-end in the future.

In addition, when Chinese car companies build brands and market high-end luxury models, they cannot rely solely on capital market financing. And every time a new model is launched, it must have the belief and calculation of profitability, and let it form its own cash flow. Only in this way can luxury high-end models continue to develop.