There is a Hualian shopping center located on the East Fifth Ring Road in Beijing. In the center of the square is an SUV of a joint venture brand. A sign next to it reads a promotional message of "10,000 yuan discount". The dealer salesperson told reporters frankly, "Since the sales of domestic brand SUVs are booming in the market, there is even a situation where it is difficult to get one. We have no choice but to put the competing joint venture models in the store here to gain more exposure." This is a microcosm of the sales of mid-range joint venture brands in the Chinese market. Cui Dongshu, deputy secretary-general of the China Passenger Car Association, told reporters: "The continuous upward development of domestic brands and the downward development of luxury brands have led to a sharp increase in the pressure on joint venture automakers in the middle of the market, especially second-tier joint venture brands." In this pinched situation, joint venture brands have started to break through in both products and channels. Attacked from both sides According to the statistics and analysis recently conducted by the China Association of Automobile Manufacturers, in September 2016, a total of 974,800 Chinese-branded passenger cars were sold, a year-on-year increase of 39.08%, accounting for 42.68% of the total passenger car sales, and the market share increased by 2.42 percentage points from August. Among them, brands such as Geely, Changan and GAC grew by more than 50% year-on-year, and SAIC even grew by as much as 120%. The growth rate of domestic brands is generally higher than that of joint venture brands. Especially in the competition in the SUV field, domestic brands have swept away the shadow of 12 consecutive declines and occupied six seats in the top ten sales. After domestic brands have gradually broken through the low-end market, the Trumpchi GS8 launched at the Hangzhou International Expo Center has pointed its spearhead at the conservative mid-to-high-end SUV market of Highlander and Edge, moving towards the 150,000 to 250,000 yuan market, which is also regarded as the backyard of joint venture brands. While downstream domestic brands are blocking the way, upstream joint venture brands are also experiencing a drop in luxury brand prices. In the first half of the year, BMW Brilliance launched the BMW 2 Series Sports Touring Sedan, with a price range of RMB 236,900 to RMB 331,900. Two months later, BMW Brilliance launched a new generation of the X1, with the price once again dropping to the threshold of RMB 300,000. In addition, the terminal prices of many products of luxury brands such as Chery Jaguar Land Rover, Infiniti, and Volvo are close to the price red line of joint venture brands. The main reason for the above-mentioned luxury brands to be so popular in China is also due to the contribution of cheap cars, which has also seized the market share of some joint venture brands. Under attack from all sides, some joint venture automakers have begun to expose sales bottlenecks. Data shows that in the first three quarters, the market share of Korean and French brands showed a downward trend, with the largest drop of nearly 1 percentage point. In addition, market insiders predict that since the country may adjust the policy of "purchase tax exemption for vehicles with a displacement of 1.6 liters or less" at the end of the year, the current expanding auto market is likely to overdraw next year, and the overall growth rate will slow down in the future, and the difficulties of joint venture brands will be further magnified. Active Adjustment "Of course, every brand has its ups and downs, and both German and Korean brands have their own development curves. This year will be a period of adjustment for Dongfeng Peugeot." Dongfeng Peugeot General Manager Li Haigang told reporters that the company's main task in the first half of this year is to adjust product prices and clear dealer inventory. "Adjustment" has become the main theme of joint venture brands in the first half of this year. Joint venture automakers such as FAW Toyota and Beijing Hyundai are also going through this stage. However, just as the fourth quarter began, Volkswagen South and North took the lead and began to look for new growth drivers. In early October, FAW-Volkswagen launched its seventh model brand, C-TREK. What puzzled the outside world was that FAW-Volkswagen, which has been deeply involved in the Chinese market for more than 20 years, still did not launch the best-selling SUV model on the market, but launched the first crossover station wagon in the Chinese market. Dong Xiuhui, general manager of FAW-Volkswagen Sales Co., Ltd., believes that "crossover station wagons will become another blue ocean in the market after sedans and SUVs." Channel sinking Although the market share has been eroded again and again, it is well known that joint venture brands, relying on their brand advantages, have a brand premium of 10,000 yuan more than domestic brands of the same level. However, with the price war launched by domestic brands, the homogeneity of low-end models has become increasingly serious in terms of price and product strength. When market competition entered a white-hot stage, joint venture brands also began to move their positions deep into the rear of domestic brands - the fourth and fifth-tier markets, and channel sinking became the former's usual strategy. In the past few years, economically developed regions such as Beijing-Tianjin-Hebei, Shandong, Guangdong, Jiangsu and Shenzhen have been at the forefront of automobile consumption and new car registration in China. However, as the number of cars in use approaches saturation, restrictions on driving or purchases are gradually implemented, and the growth rate of car sales is slowing down. Beijing, Shanghai, Guangzhou, Shijiazhuang, Tianjin and other regions are on the list of cities with purchase restrictions. In comparison, the western and urban markets have greater consumption potential and space, and channel sinking has become a "must-do homework" for joint venture brands. Seeing the joint venture army breaking through from top to bottom, an investor of a dealer of a domestic brand confidently described to reporters: "They don't know that now the village heads in the countryside all drive domestic brand cars. Geely Village, Roewe Village, and JAC Village can be seen everywhere." The implication is that domestic brands have already divided their "spheres of influence", and it can also be seen that it is not easy for joint venture brands to break through. 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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