Having spent 1.6 billion on advertising in three years, how long can Nezha Auto, which exchanges profits for traffic, last?

Having spent 1.6 billion on advertising in three years, how long can Nezha Auto, which exchanges profits for traffic, last?

In the first few days of July, domestic new energy vehicle manufacturers released their performance results, and most models maintained growth, with the entire new energy market increasing by 32.7% year-on-year.

But no matter how hot the market is, there are always losers. Among the new car-making forces in June, the only brand that saw a year-on-year decline was Nezha Auto.

Sales data showed that Nezha Auto sold 10,206 vehicles in June, barely staying in the club of monthly sales of 10,000 vehicles, but it was a year-on-year drop of 15.9%, which was very conspicuous among its peers who were all seeing sales increases.

In 2024, China's new energy market has entered the knockout stage. Monthly sales of over 10,000 are just a passing line, and Nezha Auto has difficulty even maintaining this passing line. Such performance is obviously disappointing.

Nezha Auto is not without effort. Data shows that from 2021 to 2023, Nezha Auto's advertising and promotion expenses reached 333 million yuan, 333 million yuan and 916 million yuan respectively, totaling nearly 1.6 billion yuan. Among them, advertising expenses in 2023 increased by 200% year-on-year, but sales volume dropped from 152,100 vehicles in 2022 to 127,500 vehicles.

It is obvious that Nezha Automobile did not use the best resources for the best purpose.

First of all, the name Nezha is quite strange. Among the new forces in car manufacturing, Xiaopeng and Ideal are named after their founders, Weilai has a more lofty meaning, and Leapmotor says that it is "running continuously from zero", which can all justify itself, but Nezha is named after a mythical figure.

According to Nezha himself, the mythical Nezha represents bravery, confidence, and fearlessness. Regardless of whether this statement is correct or not, does it have anything to do with new energy vehicles? So despite Nezha Auto’s great efforts, it has not made more users remember it.

There is a concept of "sales expense ratio" in the industry, which refers to the ratio between a manufacturer's sales expenses and sales revenue. Data shows that Nezha Auto's sales in 2023 will be fee The ratio is as high as 29.72%, ranking first among the leading manufacturers of emerging forces.

The sales expense ratio is close to 30%, which is a very scary number. It is equivalent to spending 3 yuan on advertising for every 10 yuan of revenue. If some daily operating expenses and other necessary expenses are deducted, the funds available for independent research and development will be very tight. With the size of Nezha Automobile, spending 30% of its revenue on advertising is equivalent to chronic suicide.

Of course, if this money really creates brand influence, it is still worth spending, because once the brand image is established, it is a huge intangible asset. The problem with Nezha is that it spent money but did not accomplish anything, and even produced negative effects.

When you mention NIO, you will think of its battery swap stations; when you mention Ideal, you will think of extended-range electric vehicles; when you mention BYD, you will think of the three-electric system, but when you mention Nezha, what do you think of?

Nezha has almost no brand association with electric vehicles. When ordinary consumers hear these two words, it is almost the same as hearing Calabash Brothers or Sun Wukong. They have no idea what this brand does.

Currently, Nezha Auto has a total of 5 models on sale. Among them, the highest-end Nezha S has a top-end model priced at only 224,800 yuan, while the lowest-end Nezha AYA has a starting price of only 65,800 yuan. These models do not have any special competitiveness and mainly rely on low prices to attract users.

Low price is not a big problem. Being able to do well in the low-end market is also a kind of ability, just like Wuling Motors. But the problem is that Nezha Motors is in the low-end market, but it is not content with the low-end market. The Nezha S it launched is a medium-to-large coupe, and the Nezha GT is a sports car. Both models are not easy to sell in large quantities.

In fact, low-end models are aimed at ordinary family users. The main demand of these people for cars is daily transportation. Generally, they are just-in-need models. Models like Nezha S and Nezha GT are not suitable for family users.

Among Nezha's current product lineup, the compact SUV Nezha S and the medium-sized SUV Nezha L launched some time ago are more in line with Nezha's product positioning, but Nezha X lacks product power, with monthly sales of less than 500 units. Nezha L has performed well since its launch, but it is still unknown whether it can maintain its performance in the long run.

The price is low, but it has no special features. Nezha has no outstanding advantages in the low vehicle use costs, long battery life, and large space that consumers like. Low price has almost become its only selling point. However, in terms of low price, can Nezha Automobile surpass BYD and Geely in the market below 200,000 yuan?

This state of being neither high nor low is the biggest problem facing Nezha Auto, which means that no matter how it markets itself, it will be wrong and it is difficult to establish brand recognition.

In fact, when the Nezha brand was first established, it was positioned in the low-end market. One Risky move.

The low-end route must be supported by huge delivery volumes, but Nezha, like other new car-making forces, is a latecomer and does not have the strength to compete with BYD and Geely in scale.

Therefore, Ideal chose to focus on extended-range power, and NIO chose to focus on battery swapping. Both relied on one unique trick to make a name for themselves, and both positioned themselves in the high-end market, gradually growing into leading manufacturers of new forces.

Nezha Auto was positioned in the low-end market from the beginning, so it had very little room for maneuver. Even if the marketing department wanted to promote the car, they might not know what to promote, because the main selling point of low-priced models is their low prices, which does not need to be promoted.

From an objective point of view, it is already difficult for the new energy vehicle industry to come up with selling points that can support a brand. The intelligence of Hongmeng Zhixing, Weilai's battery swapping, Ideal's extended-range electric and super dad car positioning are all the types that will be gone soon. Once they occupy these ecological niches, it will be difficult for other manufacturers to compete.

It is possible that the new energy vehicle market will develop new selling points in the future, but it is unlikely for Nezha Auto to achieve this. Although its technology is not backward, it is not outstanding either. Its R&D investment is difficult to compare with that of leading manufacturers. It is unlikely to seize an opportunity and become famous in one fell swoop.

Nezha Auto’s marketing department is like a cook without rice, but it is difficult for a good cook to cook without rice. Without leading technology and strong product performance, marketing will hardly be effective.

Marketing is never made up out of thin air, but it is about continuously increasing one's strengths and eventually forming a certain brand awareness. However, Nezha Auto is unlikely to make a technological breakthrough in the short term.

In fact, it is not just Nezha. Xiaopeng and Leapmotor also have no obvious strong points, and the performance of these two brands is also unstable. The same is true for Xiaomi. Although it has added various concepts to itself, the main core selling point of Xiaomi SU7 is "like a Porsche". If it cannot develop new selling points, it is also in danger.

This phenomenon is the result of the gradual maturity of China's new energy vehicle industry. The whole new energy market is dominated by the strong, and if there is any opportunity, it will be seized by large manufacturers. It is difficult for small manufacturers like Nezha to turn around. However, it cannot be said that there is no chance at all. If the money spent on advertising can be used for research and development, and product performance can be used to attract users, Nezha Automobile may be able to save itself, but does it have the courage to do so?

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.

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