In 2023, China's auto market ushered in a highlight moment. Despite the global economic downturn and huge internal and external pressures, Chinese brands have successfully exceeded 30 million annual sales, setting an unprecedented record with a market share of 56%, and the penetration rate of new energy has exceeded 30% ahead of schedule.
Chinese and foreign car brands: friend and foe
Chinese auto brands should be congratulated on their brilliant achievements, but should we use "victory" to define the status of foreign brands and joint ventures? In fact, we don't have to put our minds in dichotomy and the market doesn't need to play a zero-sum game. Chinese and foreign car brands, whether petrol or tram, once they enter the Chinese market, become an organic part of China's auto industry.
There is a relationship between Chinese and foreign car brands. In terms of talent and system, joint ventures and imported brands have promoted the development of China's local supply chain and supporting system. In the era of fuel vehicles, Volkswagen, Toyota, Audi and others provide platforms and manufacturing standard systems for independent car companies, while in the era of electric vehicles, Tesla, Volkswagen ID, Toyota bZ, etc. have promoted the progress of China's supply chain.
China's auto industry has long been developing in the process of leveraging and joining forces with overseas brands, and electrification has emerged in the "way to win joint ventures". In the era of smart electric vehicles, Chinese and foreign auto brands are more often in the same camp. Mentors, friends and rivals, highlighting the deep ties between the world's largest manufacturing country and the automotive industry.
The integration of joint ventures and autonomy: jointly driving innovation
Before China's auto industry entered the new energy and intelligent track, the importance of overseas brands has already emerged. The world's largest manufacturing country has close ties with the most important branch of automobiles, starting with the import of automobiles in 1901 and ending with the opening of Jeep in Beijing in 1984, the history of China's automobile joint ventures has gone through 40 years.
In the years when fuel vehicles were dominant, Chinese car companies have formed an interesting chain by learning from overseas car brands, connecting the two seemingly unrelated camps and promoting the transfer of technology and talents. The joint venture provides a platform and standard for Chinese OEMs, becoming a treasure trove of technology and experience.
Blood Transfusion and Friendship: Advancing Together
According to the data of the China Association of Automobile Manufacturers, the proportion of new energy of Chinese brands in 2023 has reached 49.9%, accounting for almost half. Behind the soaring sales and market share is a grim fact: the tram business is not as profitable as the gasoline car business, and the independent brand is not as profitable as the joint venture business.
For China's auto industry to achieve the best development results, even if the momentum of new energy vehicles gives more than half of the independent share, it is not necessary to treat all overseas auto brands as hostile. Finance plays a key role in the development of electrification and intelligence.
In the case of GAC and Toyota, Toyota has achieved considerable profits through its joint venture in China. The transfusion of funds has enabled GAC Group to achieve good results, which not only promotes the market performance of the joint venture brand, but also promotes the development of its own brand.
In addition to the two joint ventures of FAW Toyota and GAC Toyota, Toyota's luxury brand and imported Toyota business have the largest sales volume among imported cars, making Toyota achieve good profit indicators both globally and in China.
GAC Group will achieve a non-net profit of 7.496 billion yuan in 2022, which is a good level among car enterprise groups. Although it cannot be compared with FAW, SAIC and other large profit companies, it is at the same level as the Great Wall. The profit mainly comes from the joint venture, which is reflected in the financial report as "joint ventures and joint ventures". In 2022, GAC Toyota, the highest among joint ventures, made a profit of 7.521 billion yuan, with a total profit of 12.072 billion yuan.
At present, the scale of new energy vehicles is not enough to fully dilute the cost of research and development and battery costs, so except for a very few brands, most new energy brands have not yet turned positive. Therefore, Aion's ability to start making a profit in June-July 2023 is already a valuable achievement, and it still cannot completely replace the GAC joint venture in terms of profit contribution.
Therefore, if we hope that Aion and Haobo can develop rapidly, in a certain period of time, we need GAC's joint venture plate to carry out "blood transfusion"; if we want Toyota and BYD to cooperate with the new car performance is more powerful, then Toyota's joint venture in China, and Lexus, Toyota imported cars, will also play a role in financial support.
Chinese and foreign brands learn from each other: make progress together
In addition to financial support, overseas brands still have many highlights worthy of reference for Chinese brands in terms of playing style and tactics. Giving consumers full choice is one of them, and different electrification routes coexist around the world, giving consumers more possibilities.
Under the joint venture model, exchanges between Chinese and foreign car brands are more frequent. The flow and collision of technologies have made countless legends, BYD makes batteries, Tesla makes motors, and Ford makes electronic controls, each of which has played its own strengths and jointly promoted the process of electrification in China.
Looking at the layout of global car companies, giants such as Toyota, Lexus, General Motors and Mercedes-Benz all have diversified projects in the field of electrification. In particular, Toyota and Lexus's insistence on a multi-route is the most obvious. Through this strategy, brands provide consumers with richer and more comprehensive choices, allowing them to flexibly choose in different scenarios according to their individual needs.
Secondly, the main challenge for electric vehicles and smart cars is how to improve the matching degree between the user's mind and the performance of the product. At present, the electric vehicle market has problems such as range anxiety, and smart cars have not yet fully won the trust of consumers in terms of safety and reliability.
China's new forces and Tesla have won over a part of the pioneer crowd by introducing cool features and getting closer to the demands of consumers. In contrast, traditional foreign brands pay more attention to the reliability and intelligent safety of electric vehicles. This is not a comparison of who is smarter, but a division of labor to meet the needs of different consumer groups. For example, while Lexus is advancing its diversified electrification route, it has emphasized key metrics such as range authenticity, reliability, and safety.
In the case of Lexus, the luxury car brand not only launched the all-electric RZ, but also highlighted the LM hybrid model and the ROV hydrogen energy concept. This diversified strategy aims to meet the needs of different scenarios and bring greater vitality to the market.
Lexus also pursues safe and reliable intelligence in terms of intelligence, not just radical technology. The LSS+ 3.0 intelligent safety system equipped with the Lexus RZ efficiently integrates a series of cutting-edge active safety technologies to adapt to common traffic hazards and high-frequency vehicle use scenarios. Unlike radical intelligent car technology, Lexus's intelligence is more gentle and anthropomorphic, such as the PDA predictive active driving assistance system.
Ultimately, the success of a smart electric vehicle depends not only on the level of technology, but also on the right marketing and service strategy. In this regard, Tesla and the new forces have attracted the vanguard crowd with radical features. However, as more mainstream people turn to smart electric vehicles, traditional brands such as Lexus are more in line with the needs of users after the return of rationality through a gentle and thoughtful brand image.
Overall, Chinese and foreign auto brands should carry out more in-depth cooperation in the field of electric vehicles and smart vehicles, learn from each other's experience, and jointly promote the sustainable development of the industry.
Chinese and foreign brands learn from each other and achieve each other, especially in this era of new energy and intelligence. In the context of jointly tackling climate change and the energy crisis, various car companies have united and cooperated, shared technology and experience, and become a key force in promoting innovation in China's auto industry.
The integration and win-win situation of Chinese and foreign auto brands is an important direction for the development of China's auto industry. Today, with the intensification of competition in the global auto market and the wave of new energy and intelligence, Chinese and foreign auto brands should strengthen cooperation and work together to meet future challenges. Whether it is a joint venture or an independent brand, they can find their own place in this big era and achieve common development and mutual benefit and win-win results.