SAIC R brand transformed into Feifan Automobile, independent new energy vehicles ushered in the "tide of independence"

On October 29, SAIC Motor issued an announcement that the company intends to invest in the establishment of Feifan Automobile Technology Co., Ltd. (hereinafter referred to as "Feifan Automobile"), with a registered capital of 7 billion yuan, and the R brand of SAIC Group Passenger Car Branch (hereinafter referred to as "SAIC Passenger Car") will be independent and market-oriented operation by Feifan Automobile.

In terms of operation mode, Feifan Automobile will adopt an asset-light model and be manufactured by the passenger car branch. This is believed to be SAIC Group's efforts to reduce its own financial pressure - in addition to the R brand, SAIC's other high-end electric brand Zhiji Automobile, which is still in the market cultivation period, also needs to continue to inject capital.

In terms of market positioning, in August this year, the secretary of the board of directors of SAIC Motor Group called the R brand "SAIC passenger car high-end intelligent pure electric car brand", and in the announcement of SAIC Group, the official description was "Feifan Automobile will deeply cultivate the high-end intelligent electric vehicle market", from high-end to high-end, the positioning of the R brand has quietly declined.

Why is Feifan Automobile positioned in the mid-to-high-end market? The official explanation is that "with the acceleration of the market structure from 'dumbbell type' to 'spindle shape', the high-end market is a place where soldiers must compete, attracting many players such as new and old domestic car companies and Internet technology companies to participate in it."

For R brands, the benefits of operating independently are clear. The R brand said that "operating as an independent company will have greater autonomy and initiative."

The increase in autonomy comes from changes in management models. The R brand was previously part of SAIC Passenger Cars, a subsidiary of SAIC Motor, whose main business segment was the Roewe and MG brands focusing on the fuel vehicle market, while the independent R brand was operated by THE newly established Feifan Automobile of SAIC Motor. This is quite similar to the management model of Zhiji Automobile.

In addition, SAIC Motor also said in the announcement that Feifan Automobile will explore the use of innovative company operation methods, business operation models and market-oriented incentive mechanisms.

The innovative market-oriented incentive mechanism has been reflected in the shareholding structure of Feifan Automobile. According to the announcement, SAIC Motor subscribed 6.65 billion yuan, accounting for 95% of the registered capital, and the employee shareholding platform subscribed 350 million yuan, accounting for 5% of the registered capital.

One of the reasons why SAIC Motor wants to enhance the autonomy of the R brand and encourage its innovation is to boost its less than ideal market performance.

In May 2020, SAIC motor launched the R standard, announcing the creation of a new business model, products, channels, organizations and culture. However, at that time, the positioning of the R standard was only a series of SAIC Roewe brand, not an independent brand. This is considered to reflect SAIC's cautious and tentative mentality - offensive and defensive.

During the 2020 Guangzhou Auto Show, SAIC Motor set up a new stand - R brand booth, R standard officially independent of the R brand, but still belongs to the SAIC passenger car system, positioning the high-end electric market, in the organizational structure and Roewe and MG brand is a parallel relationship.

Although positioned as a high-end, the two models sold by the R brand are more "conservative" in price, and the first model ER6 listed before the brand independence is priced at only 162,800-200,800 yuan, even if the second model MARVELR launched after the brand independence, it has only just touched the price threshold of 250,000 yuan.

In contrast, other independent high-end new energy brands that were born at almost the same time as the R brand, such as Dongfeng Lantu and BAIC Jihu, have rushed into the 300,000 yuan track. Behind the "conservative" pricing strategy of R brand is the constraint of brand power. Some analysts pointed out that the two models sold by the R brand were born from the Roewe technology system, and the "brand" of the Roewe brand on the body is very deep, and the brand power of Roewe cannot support too high prices.

In addition to the pricing is not high-end enough, the market performance of the R brand is also tepid. Due to the shortage of chips, the R brand's sales target this year has been reduced from the initial 30,000 to 20,000. Third-party platform data shows that the cumulative sales volume of the R brand from January to September this year was 9919 vehicles, which is still far from the annual sales target after the reduction.

It is worth noting that in order to support the impact of the new energy vehicle sector on the high-end market, domestic independent car companies have independently operated their high-end electric brands, which has become a major trend.

In July 2020, Dongfeng's high-end electric brand Lantu was born and implemented a comprehensive market-oriented operation. Gac New Energy announced in November 2020 that it changed its name to GAC Aeon to complete brand independence; in April this year, Geely also released a new high-end electric brand, Extreme Krypton, which adopts an independent operation model, and its operating entity, Extreme Krypton, is jointly invested and established by Geely Automobile and Geely Holdings.

From the development process of Lantu, Eian, Extreme Kr, etc., it can be seen that the benefits of independent operation of high-end new energy brands also include helping to better absorb social capital and promote their own development with the help of external resources. In August this year, only 4 months after the release of The Krypton completed the first round of independent financing, investors include Intel Capital, CATL Times, Bilibili and other five ecological partners.

As a traditional car company, SAIC Motor has also begun to pay more attention to capital operation since this year. Lan Qingsong, vice president of SAIC Motor, said in September this year, "SAIC motor should use capital. Everyone thinks saic is not bad money. But our chairman also said that many of our previous thinking was still industrial age thinking, relying on rolling development, coming by ourselves, and now we must actively use the capital market. ”