Li Xiang officially became an enemy of Wenjie after 4 years of learning from Huawei.
Yesterday, Li Auto announced a price reduction for a full range of products.
In addition to the newly launched L6, the prices of the Ultra and Max versions of the L9, L8 and L7 will be reduced by 20,000 yuan, and the price of the L8 and L7 Pro versions will be reduced by 18,000 yuan.
Among them, the biggest drop was MEGA, with a price drop of 30,000 yuan to 529,800 yuan.
Even in order to take into account the interests of old car owners, Ideal refunds the difference in car purchase price for 2024 car owners in the form of cash refunds, which is quite rare in the price reduction policy of car companies.
In addition to the price cut, Li Auto has made frequent moves in the past two months - the CEO has sent internal letters to reflect, adjust the organizational structure, and adjust the product sequence, which is quite nerve-wracking.
Despite having more than $100 billion in cash, Li Auto is still suffering from the failure of the MEGA, a pure electric MPV model.
#01 Aim for the Boundary
A week ago, after the release of L6, Wang Xing, an investor in Li Auto and CEO of Meituan, posted a message on Moments:
Among all the models launched by Ideal so far, the L6 is likely to be the one that Ideal's employees buy the most. In other words, MEGA is a bit of a car made for the ideal CEO himself, and the L6 is the car that the ideal employee builds for himself.
Obviously, L6 is to be measured.
So although the price is too low will affect the L7/8/9, Li Xiang still set the starting price of the L6 Pro at 249,800, and the target competitor is very clear - that is, the AITO.
In the face of Huawei's powerful opponent, Ideal gave enough sincerity this time:
At 249,800 yuan, it is the same as the entry price of the M7, but the L6 comes standard with four-wheel drive.
In terms of intelligent driving capabilities, the main version of the M7 does not have high-speed intelligent driving, while the ideal L6 has low configurations, and the high configuration will cover non-urban roads.
In addition, the Ideal L6 also has preferential policies, and the actual price is lower.
Although Li Xiang had lamented that "the Ideal ONE was disabled by the M7", Ideal had almost never really regarded the Question as a core competitor when it launched a new car, and had been advancing at its own pace.
But apparently the L6's positioning competitor is the M7, and this is the first time that Ideal has launched a counterattack.
The background is the just-announced sales volume for the first quarter of 2023.
MEGA is not powerful, relying only on the L series, the ideal first quarter sold 80,000 vehicles, a year-on-year increase of 52%, compared with itself, the progress is great.
But compared with the questioning world, it is losing.
Not only was the single model suppressed by the M7, but in terms of sales of the entire brand, Ideal delivered 28,984 new cars in March, and AITO delivered 31,727 units - this is the third consecutive month that Ideal has lost to Wenjie.
And just now, Wenjie released the new M5, which is also equipped with a high-end intelligent driving version at a price of 249,800, which is just like a response to the L6.
At the same time, the sales volume and promotion efforts of Wenjie continue to grow, the M7 launched a 20,000 yuan discount in early April, and the number of orders for the M9 has exceeded 60,000 units.
#02 King of Matryoshka Dolls
Prior to the release of L6, Ideal had already begun to make several adjustments to its product line.
On March 1, MEGA was launched, and at the same time, Ideal released the price of the 2024 L-series model, adding Air versions of the L7 and L8 to reduce the entry price.
Soon, on March 12, Ideal changed its name again, adjusting the names of L7 and L8 from Air, Pro, and Max to Pro, Max, and Ultra.
This does not mean the disappearance of the Air model, but rather the addition of the front double wishbone rear five-link suspension and CDC shock absorber configuration is named the Air version, with a small cup under the large, medium and small cups.
In this way, the official price of the 2024 ideal L7 Air becomes 301,800 yuan, and the L8 Air is 321,800 yuan.
On March 21, Li Xiang reflected in an internal letter that Li Auto paid too much attention to sales and competition from top to bottom, allowing desire to override value.
On April 18, Ideal released the L6, which is divided into two versions, Pro and Max, with prices of 249,800 yuan and 279,800 yuan.
Ideal once revealed to the media that the L6 was originally priced at 259,800 yuan, which was adjusted to 249,800 yuan when it was finally officially released.
Embarrassingly, though, this pricing puts the L6 Pro and L7 Air in competition.
The L6 Pro, which is not equipped with air suspension, also has a front double wishbone rear five-link suspension and CDC shock absorber configuration, is 60,000 yuan cheaper than the L7 Air, and the body is only 12.5 centimeters shorter.
As a result, there is this price adjustment on April 22, which is currently:
- The Ideal L7 Pro sells for 301,800 yuan, the Max for 329,800 yuan, and the Ultra for 359,800 yuan;
- The Ideal L8 Pro sells for 321,800 yuan, the Max for 349,900 yuan, and the Ultra for 379,800 yuan;
- The Ideal L9 Pro sells for 409,800 yuan, and the Ultra sells for 439,800 yuan.
The 7, 8, and 9 models no longer include the Air version, and the air suspension is standard across the board, and the three models carefully cover the range of 301,800-439,800 yuan, which is still mainly from BBA to grab the market, and at the same time staggered with the 469,800 yuan of the M9.
In the range of 20-300,000 yuan, L6 will deal with M7 and M5.
#03 Organizational Success = Product Success = Company Success?
In the face of market uncertainty, Ideal seeks stability through organizational reform.
First of all, the original 500-person "CEO Office" was renamed the "Product and Strategy Group", which weakened the supply chain and sales functions, allowing Li Xiang to focus more on the product business.
Under the leadership of Zou Liangjun, Senior Vice President of Sales and Service, Li Auto officially established a new GTM (Go to Market) team, which is responsible for coordinating the implementation of the new product launch plan and taking responsibility for the market results, so as to solve the problems exposed by MEGA, such as the misalignment of product positioning and sales targets.
After learning from Huawei four years ago, the starting point for all work within Ideal is a PEA (Product Experience Evaluation), whether it is a service, an event, or a product feature, it needs to be submitted for review.
By adjusting the structure, clarifying the methodology, and strengthening the evaluation process, Ideal hopes to move more steadily in product development and avoid the recurrence of MEGA-like dilemmas.
All in all, the biggest goal of the ideal series of adjustments is commercial success, that is, to make a product that satisfies users and keeps the company profitable.
I also have to say that compared with friends who are obsessed with spending money and can't sell cars at lower prices, Li Xiang's thinking of starting a company is quite sober.
Previously, the ideal annual sales target was 800,000 units, based on the belief that MEGA would become the champion of all categories with more than 500,000 units, and the launch of L6 would not affect the base of 40,000 units sold in L7/August/September.
Reality and imagination are completely different.
As a result, Ideal adjusted its annual sales target from 800,000 to 56-640,000 units, and at the same time, Ideal used price cuts to cope with the current fierce price war on the one hand, and on the other hand, it can stabilize sales and allow the company to maintain stable cash flow.
Because Li Xiang understands better than anyone else that in the current competitive environment, no car company can withstand the failure of two consecutive models.
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