Second- and third-tier independent brands are facing the embarrassment of Zotye

Since the beginning of this year, the overall trend of the market to the new energy field of the trend of shifting more obvious, before some of the independent brands rely on subsidies to make profits model has been further tightened, with the predictable subsidy decline, the new energy pure electricity market is not as expected, the new forces of car manufacturing propaganda offensive, and the impact of the change after the opening of the stock ratio, coupled with the SUV market dividend bottomed out, the sales volume in the second and third-line camp of the independent brand expectations may begin to change.

Recently, Zotye Automobile launched its first flagship SUV, which was labeled "luxury", intending to open the high-end transformation of the company. At the same time, Huatai Automobile, which has been "low-key stealth" in the market, also kicked off its comprehensive transformation to new energy at the Beijing Auto Show earlier.

In 2017, the cumulative sales of self-owned brand passenger cars reached 10.847 million units, accounting for 43.9% of the domestic passenger car market share. With Geely and Changan successively entering millions of sales, the camp differentiation between independent brands has become more and more obvious. At the same time, the pressure on independent brands to further explore the joint venture will also increase.

Some analysts pointed out that the independent brands with sales of more than 1 million vehicles still have the advantage of volume, but they still feel huge pressure, such as Huatai Automobile, Southeast Automobile, and even Zotye Automobile, which have no technical reserves and no brand advantages, and the second- and third-tier independent brands will face greater difficulties.

Where do the second and third lines go autonomously?

A quarter of the time of 2018 has passed, after spending the marketing rhythm before and after the Spring Festival and experiencing the test of 3·15, in the first quarter of this year, the overall performance of China's auto market is still stable, and the data shows that retail sales in the first quarter of this year increased slightly by 4% year-on-year.

According to the China Automobile Industry Prosperity Index released by the China Association of Automobile Manufacturers, in the first quarter of 2018, the automobile industry prosperity index ACI was 21, in the light blue light area, located in the "cooling" range; in the first quarter of 2018, the automotive industry consistent composite index increased slightly compared with the fourth quarter of 2017, and the operating status of the automobile industry improved compared with the fourth quarter of 2017. The auto industry's leading composite index has decreased compared with the fourth quarter of 2017, and it is expected that the auto industry will still have some downward pressure in the second quarter of 2018.

Under the general trend of the industry, the market performance of different enterprises is very different. Each independent enterprise has two major trends: "consumption upgrading to high-end" and "technological transformation to new energy". On the one hand, this is the only way for traditional fuel vehicles to increase profits, on the other hand, there are still subsidies in the field of pure electricity and do not need too high a technical threshold.

Looking at the current development of independent brands, it can be found that almost all independent brands are pushing SUVs, talking about new energy, and talking about vehicle-mounted intelligent interconnection interaction.

Earlier this month, Zotye Automobile, which has been relying on copycat means to make a fortune, has just launched its first flagship SUV product that flaunts "luxury", although it has entered the research and development 3.0 system and wants to establish an independent first-class status, but some netizens still joke that its latest product is still "paying tribute" to the Land Rover Range Rover Sport.

Some analysts pointed out that as a senior capital player, Zotye Automobile is difficult to use in full use after the realization of backdoor listing, while the sales performance of new products is flat, the capital market has few bright spots, and it has not yet got rid of the label of the cottage ruler, and it is anxious to push the luxury concept, and Zotye Automobile chooses to break through the pace of upward breakthrough.

The fundamental reason why Zotye Automobile is eager to transform may lie in the intensification of market competition pressure, and some old independent brands with more difficult performance have faced the reality of having to transform.

Zeng Yehui, vice president of Huatai Automobile Group, told the media at the Beijing Auto Show that while Huatai Automobile closely follows the trend of unmanned driving and intelligent interconnection technology, it clearly positions Huatai New Energy Vehicle to take the volkswagen route of "intelligent national car" and to create a good and practical pure electric intelligent car that ordinary people are happy to accept.

In fact, Huatai Automobile's cumulative sales in the first quarter of this year are less than 10,000, of which only 0.64 million are traditional fuel vehicles and 0.27 million new energy vehicles, so how to support the continuous investment and development of Huatai Automobile is doubtful.

Like Huatai in order to save costs, its launch of electric vehicles is directly bought Chery eliminated product molds, changed to electric vehicles when the new car is listed; Southeast Automobile only relies on an SUV product to support; Lifan Automobile in order to save development costs, is still in the "reverse development" stage.

Second- and third-tier independent brands are still weak compared with joint ventures based on their own scale and development stage, and they are not prepared enough in the access to Internet technology and the research and development of new energy products, and the only advantage is that they can still rely on the local market, but they are unable to break through the strength upwards.

It is too difficult to break through upwards, and the transformation of new energy seems to have become the only and common means for the development of second-tier independent brands.

The development of independent brands has entered a new pattern

Since 2015, the industry for the Growth Slowdown in China's auto market is a generally agreed view, the market performance is also a similar trend, although there is a purchase tax reduction policy to stimulate a wave of small displacement products, but the overall slowdown is already a very obvious situation.

In 2017, the top ten companies in China's auto brand sales were SAIC Motor, Changan Automobile, Dongfeng Motor, Geely Automobile, BAIC Group, Great Wall Motor, Chery Automobile, FAW Group, GAC Group and Jianghuai Automobile, and the ten Chinese automobile groups sold a total of 11.7909 million vehicles, accounting for 79.76% of the total sales of their own brands, and the remaining third- and fourth-tier independent brands were divided into the remaining 20.24%.

Not only the pressure from joint venture brands, but also the competitive trend of the independent brand camp itself has long been highlighted. Zhu Huarong, president of Changan Automobile from the first camp of autonomy, has previously publicly stated that in the next 5 years, 5 (autonomous) can live well, which is very satisfactory.

The reason why the head of the first camp of independent brands described this may be that he felt the pressure from the joint venture brand.

As we all know, the ownership of independent brands can compete with joint venture brands, thanks to the judgment of joint venture brands in the field of SUVs, and independent brands concentrate on attacking the SUV market, so that they account for sufficient share and profits.

Since the first half of last year, great wall, as the only independent brand operating SUVs in China, has come to an abrupt end to its 12 consecutive years of growth and financial reports, and there has been the first double decline in sales and profits.

It is precisely because of the pressure of slowing growth and declining profits that Chery, Great Wall and Geely have launched their high-end independent brands, hoping to break through upwards. At the same time, in the joint venture camp, Volkswagen has started from the two aspects of entry-level new energy and cheap brands, and Nissan and Toyota will also press down the entry-level SUV to less than 100,000 yuan to directly encroach on the share of independent brands.

Some market analysis pointed out that the independent upward and joint venture downwards are all because the overall total share growth is slowing down, and the cake of the respective range has been eaten up, so only the other range can be aimed at the other range for the game.

Some of the independent brands of the second- and third-tier camps, such as Southeast Automobile, Zotye Automobile, Lifan Automobile, etc., although they are partial to security, they still have to face direct competition in the overall market in the end, and the trend of the overall automobile market has long appeared.

Almost all independent brands are proposing new concepts in line with the current hot spots, closely following the Internet technology and new energy electric vehicles, although all brands in this field are currently in their infancy, but corresponding to the emergence of a large number of new forces, these new brands in the Internet concept of communication means far exceed the above traditional automobile companies, so that the former is still dwarfed.

Therefore, even if facing the opportunity of transformation, second- and third-tier independent brands are still facing greater difficulties. With the intensification of competition, it has been exposed that underperforming joint venture brands may withdraw from the Chinese market, and independent brands are also facing such problems.

At the beginning of April, the Ministry of Industry and Information Technology of the People's Republic of China "Notice on the Establishment of an Exit Mechanism for the Automotive Industry", the China Machinery and Vehicle Technical Service Center intends to report the list of automobile and motorcycle production enterprises that could not maintain normal production and operation for two consecutive years in 2016 and 2017 (according to the number of certificates uploaded) to the Ministry of Industry and Information Technology, and another batch of enterprises are about to withdraw from the automotive industry. Among them, FAW Huali, Hafei Automobile and GAC Hino are all on the list.

Author: Beijing Business Daily Ni Jia