Exclusive dialogue with Denza Zhao Changjiang: The window for cross-border car manufacturing is close to closing, and the previous threshold of 30 billion is now 100 billion

Tencent News "High Beam" Author: Guo Yifei

The New Year is approaching, and Zhao Changjiang is still non-stop.

On February 1, the user communication day of DENZA Auto, General Manager Zhao Changjiang invited the presidents of more than 10 urban car clubs across the country. AFTER THE NEXT DAY'S EXECUTIVE MEETING OF BYD GROUP, ON SATURDAY AFTERNOON, HE DELIVERED THE FIRST FOUR SEATS OF THE D9 PREMIER FOUNDING VERSION TO USERS. In between, he also took a few photos of the two flagship new cars to be released this year.

As a new joint venture brand between BYD and Mercedes-Benz, DENZA bears the heavy responsibility of impacting high-end, and this field has been firmly occupied by Mercedes-Benz, BMW, and Audi for a long time. Subsequently, Zhao Changjiang came up with the D9, a relatively niche MPV model, which initially opened up the market and reputation, and also successfully opened a gap in the luxury car market.

In 2023, the cumulative sales of the D9 will reach 119,100 units, breaking the dominance of fuel models represented by Buick GL8 in the MPV market for the first time and becoming the best-selling MPV in the whole market. As a result, the annual sales volume of the DENZA brand exceeded 120,000 units, ranking first among new energy luxury brands with more than 400,000 units, and the average price surpassed BBA.

According to the data of the Passenger Association, the cumulative sales volume of the MPV market in 2023 will be 1.0928 million units, with a year-on-year growth rate of 15.9%, far exceeding that of sedans and SUVs (0.4% and 10.4%), but its overall market share is only 5%. This means that the sedan and SUV market has a broader market, but it is also more involuted.

After the first shot, how to hold the share and continue to copy the big hit is Zhao Changjiang's next challenge.

In addition to the existing D9 and N7 will be fully upgraded intelligently, DENZA also plans to launch three flagship models, with the goal of surpassing competitors on the market in all aspects from product functions to technical configuration, and creating a new luxury benchmark for new energy vehicles.

Among them, two are sedans, which are benchmarked against the Porsche Panamera and Mercedes-Benz S-Class/Maybach sedans, respectively, and one SUV is aimed at surpassing Huawei Wenjie M9 and BMW X7.

On February 3, Tencent News "High Beam" had an exclusive conversation with Zhao Changjiang in Shenzhen. In the meantime, he said that the D9 should maintain "product determination", continuously upgrade the ability of assisted driving and other products, while maintaining the price stability of the first-hand car system, and maintain the sales level of 120,000 units in 2024, will not blindly expand, and launch more MPV products in a wider price range.

According to data from the China Association of Automobile Manufacturers, in 2023, the sales of domestically produced high-end brand passenger cars will be 4.516 million units, a year-on-year increase of 15.4%, and 11.2 percentage points higher than the larger market. The high-end of independent brands, including Denza, is aimed at the cake of BBAs.

With more products on the market, Zhao Changjiang has no small ambitions for sales. He said that the target is to exceed 180,000 units in 2024 and hit 400,000-500,000 units in 2025, ranking among the top 4 and top 5 in the luxury car market in the 400,000 range at home and abroad.

Looking around, DENZA's competitors are not only BBA, but also a number of new car-making forces such as Huawei and Ideal.

Zhao Changjiang believes that if last year was the high school entrance examination, this year is the college entrance examination, which is related to whether the new forces can enter the finals, this year and next year, this sales threshold may be around 300,000 and 500,000 vehicles. "The knockout of the new forces has begun, and the strategic period for cross-border players to enter the automobile industry is about to close, and the original 30 billion can do well, but now it may take hundreds of billions. ”

The following is a transcript of the conversation:

What is the significance of Tencent News' High Beam :D 9 Premier Founding Edition 4-seater in the entire DENZA product matrix?

Zhao Changjiang: There are very few MPV 4-seater high-end cars of independent brands, and Chinese entrepreneurs have made very outstanding contributions to China's economy, whether it is a private or joint venture, we should represent China's auto industry and stand up to create such a flagship product, which is a tribute to the entrepreneurial spirit. This limited edition was sold out on the day it was launched, and it was very hot, and it will not be launched in the future.

Tencent News "High Beam": Buick GL8 Hybrid, Ideal MEGA and other competing products entered the market this year, how can D9 maintain competitiveness?

Zhao Changjiang: In 2022, the MPV market share will only account for 5%, and it will be close to 10% in 2023, grabbing the market for many sedan executive and SUV products, and in 2024, the MPV market share should grow to 12~13%.

D9 actually creates a full-scene MPV of IKEA to meet the needs of multi-scene vehicles, with a target of 120,000 units this year and an average of 10,000 units per month.

We still have to maintain the focus of our products, and will not blindly expand, such as making more diversified, richer products, or products with a wider price range, and continue to do a good job in our mid-to-high-end household and business travel services, while ensuring the stability of the price of the first-hand car terminal market. A product must have its determination, not to say that it is extremely quick to break the value that the product should have. Of course, we will continue to upgrade our products, and there will be a sentry mode in the future, which will further improve the ability to assist driving.

Tencent News "High Beam": With the three flagship new cars launched on the market this year, plus the existing D9, N7 and N8, what are the expectations for sales next year and beyond?

Zhao Changjiang: With good products, coupled with the operation system of channels and brands, DENZA aims to exceed 180,000 units in 2024, and in 2025, there will be more abundant products and a higher penetration rate of new energy, and there is a chance to reach 400,000 to 500,000 units. In this way, next year, it will be the top 4 level of China's 400,000 average price high-end market, and at least the top 5 level in the global high-end market.

Tencent News "High Beam": I saw you shouting on Weibo before, "N7 will beat Tesla Model Y", where does the confidence come from?

Zhao Changjiang: The Model Y has been launched for five or six years, and although some minor changes have been made, there has been no substantial change, and many consumers have moved from the first and second tier cities to the fourth and fifth tier cities.

On January 18th, the DENZA N7 launched a high-speed NOA upgrade, and the customer feedback was very good, which was very recognized for our intelligent level, and the N7 was already the first echelon in the intelligent driving. Whether it is in terms of appearance, space, battery life, intelligence, comfort and luxury, and safety, it crushes the Model Y in all aspects, and we are very confident that we can defeat this product in the two dimensions of intelligence and electrification.

Of course, we look at the review, what are the shortcomings of the 23 N7, one is that the diversification of the product is not enough, and the standard battery life version should be launched faster;

Tencent News "High Beam": Various car companies announced their sales data for January, and the year-on-year growth was quite large, but there was still a gap compared with December last year, what do you think, and how do you view the possible slowdown in market growth this year?

Zhao Changjiang: The sales volume of the DENZA brand in January was close to 10,000 units, which is still good. From the perspective of the market, one is affected by the exemption of 30,000 yuan from the new energy purchase tax, and the users will buy it in December, and the second is the promotion of car companies in January, especially the joint venture brand is more intense, and there is some consumption itself. I think it's a good start to have this in January, and the group's sales exceeded 200,000 units.

Generally speaking, China's auto industry has reached the stock market, as long as you have confidence, you can consume, China's savings rate is very high, I am confident in the growth of the automobile consumption field in 2024, of course, the penetration rate of new energy vehicles will be higher.

Tencent News "High Beam": Last year, the discount of the overall domestic auto market reached about 15%, will the price war continue this year?

Zhao Changjiang: Last year, the price of raw material lithium carbonate fell very much, more than 500,000 tons to more than 100,000 yuan, if it is a 100-degree battery pack, a car can drop 40,000 or 50,000 yuan.

There will still be a price war this year and next, but the market head is becoming more and more focused, the top 10 brands will account for 80% and 90% of the market share, and the top 10 star models may account for more than 50% of the market. I think the knockout competition is coming, for the whole industry, big fish and fast fish should work at the same time, fast fish eat slow fish, your iteration is fast, adjustment is fast, decision-making is fast, big fish is scale cost technology, this is very core.

Tencent News "High Beam": How do you view the competition brought by Huawei, a new entrant, and is the time window for cross-border car manufacturing over?

Zhao Changjiang: From information and communication, intelligence to the whole vehicle, there are many cross-industry joiners, or promoters, and the whole market also needs some new forces or new genes, including BYD, which is also a new force from batteries to automobiles, and has developed into a global leader in new energy vehicles in just 20 years. The diversification and cross-border integration and innovation at each stage are obvious, and we at DENZA will also benchmark and learn from all parties and surpass them.

Now to enter the automobile industry, first of all, there must be a very large financial strength, the previous 30 billion can do well, now to 100 billion, and secondly, it has now entered the knockout round, and the strategic period of entering is about to close.