Who is painting the pie and who is sowing the seeds on the eve of China's auto market transformation

The biennial Shanghai International Auto Show is here as scheduled. However, the increasingly large venues seem unable to accommodate the growing ambitions of automakers.

From the data, more and more companies are participating in the exhibition, and the number of global first-car models is also increasing year by year. The importance of the Chinese market has been placed at an unprecedented level by major multinational automakers.

The Times Weekly reporter noted that although the 2017 auto show did not seem to be much different from the 2015 Shanghai Auto Show, the new energy vehicle sector showed a significant growth. At the same time, Internet companies manufacturing cars and even participating in the exhibition was another feature that made this year's auto show different from previous years.

Therefore, this year's Shanghai Auto Show, with a total exhibition area of ​​more than 360,000 square meters, has attracted mainstream car companies, emerging brands, Internet companies, and even upstream and downstream suppliers. As long as it is an industry related to the automotive industry, it can almost be found in the venue of this auto show. The CEOs of the participating car companies also emphasized the trends of the Internet, intelligence and new energy.

Industry insiders lamented that from joint ventures to independent brands, from high-end to entry-level, the CEOs of various automobile companies and groups all mentioned mobile travel solutions, vehicle networking technology, and the future potential of new energy. The transformation of China's auto market is quietly taking place.

The electrification strategies of the giants

In recent years, major multinational automobile groups such as Volkswagen, General Motors, Toyota and Honda have launched a number of new energy projects to further promote the implementation of new strategies.

According to Volkswagen Group CEO Mullen, Volkswagen Group is also promoting the research and development of new technologies. The group is currently adopting a phased implementation plan to ensure its leading position in the field of battery technology. This year, the group plans to establish a "Center of Excellence" and plans to conduct pilot production in 2020. In addition, in terms of battery manufacturing, the group is also actively negotiating with potential partners and is expected to achieve results within this year.

In the first quarter of this year, Volkswagen Group performed poorly in China. Volkswagen delivered 695,600 vehicles in mainland China and Hong Kong in the first quarter (722,800 vehicles were delivered in the same period last year, a year-on-year decrease of 3.8%); Audi delivered 108,700 vehicles in mainland China and Hong Kong in the first quarter of this year (139,500 vehicles were delivered in the same period of 2016, a year-on-year decrease of 22.1%). Therefore, in addition to increasing the import of SUV products in China, Volkswagen will also focus on electric vehicle business (ID series products) in order to seize the next explosive market opportunity.

General Motors, which also has a large sales volume in China, seems to be betting on the electric vehicle business. According to GM executives, GM plans to launch 10 electric and hybrid models in the Chinese market by 2020. General Motors China President Tsien Hui-kang said that GM will put a pure electric model into production in China in the next two years. He also revealed that by 2020, the annual sales of electric and hybrid vehicles in China may reach 150,000 units, and by 2025, this number may exceed 500,000 units.

According to data released by General Motors, GM's sales in China reached a record 3.9 million vehicles in 2016, an increase of 7.1%. With the various impacts on Volkswagen in recent years, the competition between GM and Volkswagen for the top sales in China has become more intense. Therefore, while maintaining the growth rate of traditional fuel vehicle sales, both parties have also spared no effort in investing in electric vehicles.

Toyota, which has a relatively small sales base, did not achieve sales of more than 1 million vehicles until 2014, and has basically stabilized at around 1.1 million vehicles in the past two years. Compared with the annual sales of Volkswagen and GM, which are close to 4 million, Toyota still has a lot of room for growth in China. Therefore, Toyota's strategic appeal in China is to compete with Volkswagen and GM by introducing new products based on the new TNGA global modular production architecture. The small SUV products introduced this time are proof that Toyota is ready to continue to exert its strength in the field of traditional fuel vehicles. In terms of new energy policies, Toyota still focuses on hybrid vehicles with a higher market maturity, which is consistent with Toyota's consistent conservative thinking.

At this year's Shanghai Auto Show, Honda released its business strategy to accelerate the electrification of its products. "The global electrification trend is faster than we expected, so Honda is also changing its business direction and accelerating the development of electrification." Honda President Takahiro Hachigo said that Honda expects that around 2030, 2/3 of its global car sales will be hybrid vehicles, plug-in hybrid vehicles and zero-emission vehicles, and is currently accelerating the development of related technologies. At the same time, Honda also announced that it will launch electric vehicles developed specifically for China in 2018 in order to step up its offensive.

Luxury car technology reshuffle

The luxury car market landscape changed at the beginning of this year.

Data shows that in the first quarter of this year, Mercedes-Benz surpassed BMW and Audi for the first time to become the quarterly sales champion in China. The latest data shows that Mercedes-Benz's cumulative sales are 145,000 vehicles, BMW's cumulative sales are 143,000 vehicles (including MIMI), and Audi's cumulative sales in China in the first quarter are 108,000 vehicles due to conflicts with dealers. Therefore, at this Shanghai Auto Show, various luxury brands have brought out their unique skills in order to share the market share of BBA.

"We are not satisfied with Audi's sales in the first quarter of 2017." Volkswagen Group CEO Mullen expressed his dissatisfaction with Audi's performance in an interview with the Times Weekly reporter. At the Shanghai Auto Show, FAW-Volkswagen Audi's focus on launching the A3 shows that Audi's main target is still the entry-level market. In fact, as a luxury brand with a sales volume of hundreds of thousands of vehicles, it needs to further tap into market share. In addition to optimizing the needs of the market segments, lowering the threshold has become a consensus among luxury brands.

The main models of the Mercedes-Benz brand that will be unveiled at the Shanghai Auto Show, in addition to the global debut of the new generation Mercedes-Benz S-Class sedan, the Mercedes-Benz A-Class concept car and the new Mercedes-Benz GLA, all indicate that the future development trend of the Mercedes-Benz brand in China will also be mainly to lower the threshold.

BMW has already made some arrangements for small car products. Although the reputation of the 1 Series, 2 Series and other series has been questioned to a certain extent, this does not affect the growth of its sales. The most important thing BMW unveiled this time is the new generation of 5 Series sedan, and its mission is to fully target the A6L whose market share is gradually declining and the Mercedes-Benz E-Class which is growing day by day.

In contrast to Volkswagen's dissatisfaction with Audi, Robertson, a member of the board of directors of BMW Group, expressed his affirmation of the performance of BMW brand in China to the media: "We are very satisfied with the sales performance in China in the first quarter of 2017, which increased by about 12% compared with the same period last year."

Some analysts pointed out that the reason why the first camp of luxury cars is intensifying its entry into the entry-level market is that it is facing the reality of the continuous expansion of the market share of the second camp of luxury cars. Although the pattern of the first camp of luxury brands has not changed in the short term, its market share is gradually being eroded. Car owners who have experienced the previous batches of German top three products will consider more new luxury brands with personalized characteristics in their future car replacement plans.

In addition to lowering the threshold, luxury brands are also focusing on new energy and smart driving. Duan Jianjun, executive vice president of Beijing Mercedes-Benz Sales and Service Co., Ltd., told the media that Mercedes-Benz will launch more than 10 pure electric vehicles in 2022, most of which will enter the Chinese market. In addition, Mercedes-Benz will make layouts in smart connectivity and autonomous driving. At this auto show, Mercedes-Benz exhibited an S-Class sedan equipped with fully autonomous driving technology, and the new BMW 5 Series will also be equipped with a new iDrive system, which focuses on supporting gesture operation and voice control. Audi AG Management Board Chairman Stadler said that Audi's current focus is still on L2 and L3 levels of autonomous driving. This fall, the new Audi A8 will be equipped with L3 autonomous driving.

Opportunities for independent brands in new energy

Due to their late start in the field of traditional fuel vehicles, domestic brands have been suppressed by joint venture brands for many years. However, now that they are facing the transformation opportunities in the field of new energy, including the trend of car networking and intelligent driving, domestic brands can be said to have encountered the best development opportunities except for SUV products. But what is more gratifying is that domestic brands have finally started to develop upward in terms of brand.

Last year, car companies were no longer satisfied with just launching new cars with higher positioning. Great Wall and Geely successively announced their high-end brands: WEY and Lynk & Co. At this Shanghai Auto Show, WEY launched its first product: WEY VV7, which is positioned as a mid-size SUV. Lynk & Co also completed the pre-launch appearance of its first mass-produced product, which is also an SUV.

In terms of product design, domestic brands are becoming more mature and stable. BYD, which does not pay much attention to styling design, exhibited the Song 7-seater version and Dynasty concept car, which also had impressive design sense. Even Zotye, which uses borrowing to the extreme, brought products with original design style.

In terms of technology research and development, Changan's Blue Whale 2.0T engine, SAIC's Green Core hybrid technology, BYD's battery technology, etc. reflect the accumulation of independent brands in the field of technology. Some analysts pointed out that the market share of independent brand passenger cars reached 43.2% last year, accounting for almost half of the passenger car market sales. This year, the performance of independent brands will continue to strengthen, and the competition with joint venture brands will be fierce.

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.