Since Carl Benz invented the world's first car, in the more than 100 years of automotive industry history, countless new models have been born, accompanied by the demise of a large number of models. Just as the beetle's suspension of production has made countless car fans sigh, Volkswagen's other model into China, Santana, may also cause many emotions. Behind the imminent end of a generation of classics, it is worth investigating whether it is abandoned by the times or strategically abandoned.
A generation of god cars is coming to an end?
Recently, a copy of the SAIC Volkswagen Yizheng factory 2022-2023 model technical transformation project plan circulated on the Internet. It shows that the production capacity of the new Santana, Santana Horner, Xinrui and Xindong models will be zero after the technical transformation, and will be replaced by four models of Tujiao, Lingdu, Polo and Tuyue. Could it be that Santana is going to stop production?
Looking back at the 1980s, SAIC introduced Santana into China through ckd assembly, becoming the first joint venture brand sedan, which together with Jetta and Fukang constituted the well-known "old three". How hot was Santana ever? In the nearly 40 years since it entered the Chinese auto market, it has won the title of domestic auto sales champion for 22 consecutive years. "With Santana, I'm not afraid to go all over the world." A concise and clear advertising slogan has become the most original feeling of many post-60s, post-70s and even post-80s for family cars.
So, where did the turning point happen? It may be that in 2012, the new Santana, which started at Volkswagen Wolfsburg, replaced the old Santana. The new Santana completely abandons the 1970s styling style and design of the old Santana, and based on the new platform, it has made a new design in terms of power, design and configuration, subverting people's impression of Santana. However, it is from this generation of Santana that it has lost the title of national god car, from a hot star model to a "passerby". Coupled with the emergence of Volkswagen Langyi, it firmly suppressed Santana in terms of sales, which also made Santana's situation more and more embarrassing.
Now Santana has changed its appearance and positioning has changed a lot, but it is still a signature model under SAIC Volkswagen. In terms of sales, Santana will sell about 180,000 vehicles in 2020, which means that it will sell tens of thousands of vehicles per month. This result is not bad, at least it can enter the top 15 list of China's car sales. So, what makes it possible for SAIC Volkswagen to abandon Santana?
At present, SAIC Volkswagen has not yet responded to this officially, but there is a lot of speculation in the industry. An industry expert who did not want to be named told the "China Automobile News" reporter that the overall situation of SAIC Volkswagen is more severe, even more difficult, if you want to stop the production of a model with large sales will certainly be more cautious, the reasons behind it may be very complicated. He speculated that one is that Santana, developed by the old platform, may have problems in the supply chain; the other is the adjustment of the company's product structure under the pressure of double integration. "If the double integral wants to meet the standard, it is necessary to sell more new energy vehicles and low fuel consumption models, if it is not up to standard, enterprises need to choose between buying points and stopping some models, and relatively large cars such as Tiguan, although the fuel consumption pressure is greater, but the profit is also higher, and the company will consider it comprehensively." He said.
Santana was SAIC Volkswagen's profit cow for a long time, but now it's not what it used to be. The era of huge profits in China's auto market is gone, Santana's pricing of 86,900 yuan to 111,800 yuan also means that it does not have much premium space, it pays attention to small profits and high sales, and several other models with suspension plans are also entry-level family cars with an overall price of less than 120,000 yuan. The low profit itself, coupled with the cost of the double credit policy, may even lead to the company selling one and losing one.
Taking 2020 as an example, the average fuel consumption of SAIC Volkswagen is 5.18l/100 km, while Santana's comprehensive fuel consumption of 100 km is 5.6l, and every Santana sold will generate negative points. Overall, the total number of points for SAIC Volkswagen in 2020 is -782666 points, and it will cost a lot of money just to buy points.
Production? Resale? Electrification?
Of course, it doesn't seem reasonable to blame it entirely on double integrals. In fact, this is not the first time Santana has heard the news of a shutdown. The low premium capacity means that Santana is unable to provide substantial profits, and it is no longer in line with the public's pursuit of a higher-end and younger brand image.
However, Santana carries the feelings of many car owners after all. As Automotive industry analyst Master Zhong put it: "Our generation has watched Santana grow up from scratch." He told the "China Automotive News" reporter that SAIC Volkswagen is unlikely to give up Santana, first, Santana itself is cheaper, the Volkswagen logo on the body will also attract some people, coupled with the retail network and service network throughout the country, it is still very advantageous; second, SAIC Volkswagen's sales are declining, in this case, if santana is abandoned, it may lead to a further decline in total sales.
Three years ago, Santana also reported a suspension of production, when some people speculated that Santana may be like Jetta in the future, relying on decades of brand awareness, independent from the mass brand to become a low-cost sub-brand. Before the independence of the Jetta brand, the news of the suspension of jetta models was also full of news, until February 2019, the sub-brand jetta, which focuses on the low-end entry market, was officially announced. At present, the monthly sales of the Jetta brand, which has lost the Volkswagen logo, is about 10,000 vehicles, although it is not bad, but it is not as good as the sales of the previous Jetta single model. For example, in 2018, the Jetta sold 327,000 units, equivalent to more than 20,000 units in a single month.
In addition to changing brands with models, another way that car companies are trying is electrification. The suspension of the Volkswagen Beetle has made countless fans sigh, but it is understood that the car will return in a pure electric version in the future. As one of the "old three" in the domestic automotive industry, the generation of Shenche Fukang also had a strong spot, and then slowly faded out of the eyes of consumers, and announced the suspension of production in 2008. 10 years later, Fukang was revived again, but no longer a car but a new energy vehicle brand, when DPCA announced the launch of Fukang, along with Peugeot and Citroen as the three major brands, and in November 2018 in Wuhan released the first model after the return of the brand - pure electric car Dongfeng Fukang es500.
In addition, the existing models do not stop production or change the standard, but add hybrid, plug-in or pure electric versions to it, thereby reducing the overall fuel consumption, which is also a more popular practice used by car companies in the industry. For example, Toyota launched a Camry dual engine, Leiling dual engine, Willanda dual engine and other hybrid models, BMW will plug and mix system into a number of models, Peugeot brand former global president Ambato previously revealed in an interview with the "China Automotive News" reporter that in the future Peugeot brand launched each new car will provide several power options, including internal combustion engine, hybrid, electric and so on.
Points cost in hundreds of millions
In the history of the automobile industry, there are more than one or two classic models that have been discontinued, mostly because all aspects of the model can no longer keep up with the trend of the times. In recent years, however, the number of models that have been discontinued due to emissions or fuel consumption regulations has begun to increase, and this phenomenon is not only found in China. For example, in Europe, minicars and small cars are being tested due to the tightening of emission regulations year by year, Opel abandons the Karl and Adam mini cars, the Peugeot 108 and Citroën C1 consider discontinuation, and the Audi A1 also decides not to push the successor model.
After the news of Santana's suspension of production, the industry generally associated it with the double point policy, one of the reasons is that most of the sales of traditional car companies come from fuel vehicles, and the double points make them "stressful", while the double point performance of SAIC Volkswagen and even FAW-Volkswagen is somewhat bad.
In July this year, the Ministry of Industry and Information Technology, together with multiple ministries and commissions, released the average fuel consumption of Chinese passenger car enterprises and the credits of new energy vehicles in 2020. Judging from the results, in addition to saic-Volkswagen's negative points of nearly 800,000, FAW-Volkswagen's negative points are also as high as 1.32 million points. "Fundamentally, it may be that Volkswagen is lagging behind in China's new energy vehicle market, resulting in negative points." Generally speaking, the more fuel vehicles are sold, the more new energy credits are required. The above expert told reporters.
Volkswagen is not alone, SAIC-GM negative points also exceed 1 million points, while the negative points of Zhejiang Haoqing and Geely Automobile, which also belong to Geely Holding Group, total 1.47 million points, and the negative points of Changan Automobile, Beijing Benz, Dongfeng Motor, China FAW, Guangqi Honda and other car companies are 400,000 to 600,000 points.
In recent years, the price of new energy vehicle credits has risen, and the average transaction unit price in 2020 has increased to 1204 yuan / cent, which means that many car companies need to spend hundreds of millions of yuan or even more than one billion yuan to buy points, which is still a relatively large blow to corporate profits. For example, just in January this year, Zhu Huarong, chairman of Changan Automobile, revealed that due to the double points policy, the company's profit per vehicle was cut by about 4,000 yuan in 2020. The reporter checked the financial report and found that Changan Automobile's management expenses in 2020 added 738 million yuan of negative fuel consumption points, and in the first half of this year, the company's management expenses increased to 2.217 billion yuan, almost doubled, mainly due to the "accrual of new energy credits".
In order to alleviate the pressure of points, many car companies have begun to launch new energy models, such as Volkswagen's introduction of id. series models in China, which currently sells tens of thousands of vehicles per month, and Changan has launched Benben ev after the "oil to electricity" series of models. However, the production and sales of fuel vehicles of traditional car companies are large, the layout of new energy vehicles is relatively lagging behind, there are fewer products on sale in the market, and it also takes a process to turn around.
The price of points has risen year by year, and the electrification transformation of the automotive industry under the "double carbon" goal is also inevitable. In this case, whether to continue to push the fuel vehicle hard, or accelerate the electrification transformation, although the car companies have their own trade-offs, but there is not much time left for them.
Text: Zhang Dongmei Editor: Huang Xia Layout: Liu Xiaoye