SAIC's transformation is approaching a critical moment, new energy sources are being "increased", and Zhiji is "breaking through"
Around the Spring Festival is the traditional off-season for Shanghai's auto market. In the past, many 4S stores would be closed during the Spring Festival holiday. But now, most new energy vehicle brands that like to open stores in shopping malls choose to operate normally.
At the Zhiji Changtai Plaza store, in order to receive consumers who want to see and buy cars, the store arranges more than three employees to take turns on duty during the holidays every day, and can receive 10 to 20 groups of customers every day. With the start of the return peak season in Shanghai, the passenger flow has increased. is gradually rising. Hu Bin, manager of the Zhiji Changtai Plaza store, told reporters that generally speaking, January and February each year are their lowest sales period, but if compared with the performance of his store last year, sales in the same period increased more than ten times.
The sales volume of Hu Bin's store increased mainly due to the substantial increase in sales of the latest model Zhiji LS6. The sales data released by SAIC Group a few days ago show that in January, SAIC's new energy vehicle wholesale sales reached 64,000 units and retail sales exceeded 90,000 units, doubling year-on-year. In particular, the performance of the Zhiji LS6 was remarkable, with 4,766 units sold in a single month, marking the fourth consecutive year. It won the sales championship of "medium and large pure electric SUV" in three months and became a dark horse in the auto market around the end of the year. For SAIC's new energy transformation, Zhiji's strong sales are a positive signal.
Compared with being on duty during the Spring Festival, Hu Bin was more impressed by the hot sales of cars before the holiday. Generally speaking, the few months before the Spring Festival are the peak period of sales promotion and consumption in the Shanghai auto market. During that period, Hu Bin and his clerks hardly got much rest. They arrived at work at 7:30 in the morning and got off work at 12:00 in the evening. They worked all day long. Receiving customers. Taking the sales volume in the last two months of 2023 as an example, Zhiji Changtai Plaza store sold more than 400 cars, becoming the "sales champion" of Zhiji stores nationwide.
Data show that Zhiji LS6 will be launched in October 2023, with sales of 3,627 units in the first month, while sales in November and December climbed to 8,156 and 9,878 units, ranking first in the sales volume of "medium and large pure electric SUVs". Relying on the year-end launch of the Zhiji LS6, the Zhiji brand's overall sales in 2023 will reach 38,200 vehicles.
The sales volume of new energy models reaching 10,000 is a "threshold". For the market, LS6 is close to crossing this "threshold". For Zhiji itself, this is also the best result its brand has achieved in more than three years since its establishment.
Zhiji Brand was established in 2020. It is a high-end electric vehicle brand jointly established by SAIC, Zhangjiang Hi-Tech, and Alibaba. In April 2022 and February 2023, Zhiji successively released two models, the L7 and LS7, both priced at more than 300,000 yuan, anchoring the high-end smart driving market, but it has been unable to break into the first echelon of single models. Sales have been hovering around a thousand vehicles for a long time.
To be able to "break through" the mainstream market this time, what did Zhiji do right? Front-line sales staff told reporters that high cost performance is the key reason why Zhiji LS6 has attracted consumers' attention.
In terms of configuration, high-end intelligent driving capabilities have always been the main selling point of the Zhiji LS6. Lu Da, executive director of Zhiji Automotive Communication Division, said that in December last year, this model achieved the opening of the national high-speed NOA, that is, pilot assisted driving. On January 23, Zhiji LS6 took the lead in launching the urban NOA function in Shanghai. Users can basically realize the entire process of intelligent navigation-assisted driving on the main roads in the city. In 2024, Zhiji will accelerate the opening of urban NOA and strive to achieve the advanced version of the commuting mode covering 100 cities across the country within the year.
An industry insider said that Xpeng is currently the leader in domestic smart driving technology. Other leading players including Zhiji are slightly behind, but they are catching up quickly. Many car companies have announced urban NOA development plans, which will be launched in 2024. It is the first year for the popularization of intelligent driving technology in China. At the media communication meeting before the release of LS6, Liu Tao, co-CEO of Zhiji Auto, also expressed a similar statement. He said that the smart driving level of Zhiji LS6 is about 2-6 months behind the industry's most advanced level, but its core technology is completely self-developed and has a strong late-mover advantage. It will quickly promote the implementation of smart driving technology through subsequent OTAs. .
In the market, Zhiji has also increased its marketing efforts this time. First of all, against the background of the price war at the end of the year, Zhiji LS6 has also launched a series of preferential activities, which has reduced the market price of the product to 200,000 to 300,000 yuan, which means that consumers can get high-end models at a more affordable price. The smart driving configuration has greatly enhanced the market competitiveness of the Zhiji LS6. At the same time, Lu Da introduced that this time around the selling point of intelligence, the Zhiji marketing team promoted the driving application scenarios in a more visual way, and carried out saturated dissemination on social platforms, achieving great results in increasing visibility. good effect.
However, this marketing strategy has been controversial from the outside world. The market believes that Zhiji's original brand was positioned as a high-end brand, but the current price drop has undermined its original market positioning. Regarding the pricing controversy, Liu Tao responded before the release of LS6. He said that in Zhiji's product layout, L7 and LS7 are the main brands, benchmarking against the BMW 5 Series and BMW X5, establishing Zhiji's high-end pure electric positioning, LS6 and the fourth model to be released this year are focusing on sales, and LS6 is benchmarking against Model Y. The fourth car is aimed at the Model 3.
Brand and sales are mutually reinforcing. The establishment of a brand requires the accumulation of word-of-mouth over a long period of time, and word-of-mouth is directly related to products and services. Only by selling things can word-of-mouth be formed. At present, "involution" is still the main theme of the current domestic automobile market. When consumers are faced with ample choices, cost-effectiveness often becomes a key factor affecting purchase decisions. For today's Zhiji, high-end is very important, and it is even more important to come up with hot products. The outside world generally believes that SAIC has reached a critical moment in shaping new advantages and transitioning from fuel vehicles to new energy vehicles. Trading scale for experience and the electric vehicle product management experience accumulated by brands such as Zhiji will be crucial to SAIC's future transformation and development. .
The strategy of creating hot-selling products is not limited to Zhiji. Within the SAIC system, Feifan, Roewe, MG, etc. are all pushing hot-selling products in their respective price ranges. For example, Roewe also released the first product of the new series "D family" in November last year, the Roewe D7. The listing price starts from 121,800 yuan, and the price of the entry-level model D7DMH can reach 109,800 yuan after discounts. The main product is the "B-class" "The space of the car, the value of the B-class car, and the price of the A-class car", to enter the B-class car market.
Roewe has high hopes for this model internally. In addition to offering the most competitive price, Roewe is also promoting the transformation of its sales system and service system in the direction of new energy. Luo Fancheng, deputy marketing director of the Roewe Brand Division, said: "Many of our dealers sell fuel vehicles, and the sales methods of new energy vehicles are completely different from those of fuel vehicles, and the focus of users' concerns are also different, so how to make the entire It took us a long time to polish the marketing system to shift to new energy." Since its launch, the new strategy has begun to bear fruit, and the Roewe D7DMH's market share has also bucked the trend. Sales in January increased by 29% month-on-month, ranking among the top three in the mid-size hybrid sedan market.
SAIC's new energy strategy is accelerating. From an industry perspective, the automobile market as a whole is now in a critical period of transition from fuel vehicles to new energy vehicles. As the largest sales company of fuel vehicles in China, SAIC is bound to be under tremendous pressure for transformation. In fact, SAIC began its exploration of electrification and intelligent technologies nearly ten years ago. Including joint venture brands, SAIC's new energy vehicle sales have been among the best among domestic car companies in recent years. However, in order to complete the relay of new and old kinetic energy, in the mid-to-high-end pure electric vehicle market, which is currently the most competitive and most reputable market, SAIC needs more popular and popular models to help its own brands accumulate experience in operating smart electric products. , boosting the overall smart electric transformation.
Of course, lower prices will inevitably bring greater cost pressure. Automobile industry analyst Guo Huaiyi said that price war is still the mainstream of the market this year. Everyone is fighting for price. SAIC recognizes the current style of play and must also be under corresponding profit pressure. But he also emphasized that this is almost a necessary process for China's new energy vehicle manufacturing. Whether it is new forces or BYD, they have been building cars at a discount for a long time when they began to develop new energy. The current market It is difficult to achieve high environmental growth and high profits at the same time.
In response to the pressure on profitability, Liu Tao once told reporters: "There will definitely be cost pressure, but relatively speaking, the cost supply chain is SAIC's strength." He said that SAIC Group is one of the strongest players in China's automobile industry chain. , with the same level of parts and technology, SAIC will definitely have more advantages in terms of cost. Of course, cost is also directly related to scale, so Zhiji hopes to increase sales through LS6 and the upcoming fourth car, thereby further leveraging its cost advantage.
The auto market in 2024 is going to be cold. As competition among new energy vehicles becomes more and more intense, there are also many discussions about long-termism and short-termism in the market. Long-termism and short-termism in car manufacturing are actually discussions between brand and sales volume, profit and cost. In this race, whoever can balance the two better will stand out from the fierce competition.
