In China, a little-known electric car manufacturer is leaving Tesla behind | Automotive Industry News


Since July last year, an unknown car manufacturer in southwestern China has dominated the world’s largest electric car market. Almost every month’s sales have surpassed that of larger car companies, even Tesla. The car starts at only $4,500.

Hongguang Mini is the brainchild of SAIC-GM-Wuling Automobile Co., Ltd., a joint venture between SAIC and Guangxi Automobile Group Co., Ltd., two state-owned automakers, and the American giant General Motors.

The company is headquartered in Liuzhou City, which is famous for its limestone mountains and Heluo soup. The company has sold approximately 270,000 cars within 9 months, becoming China’s best-selling electric car-with greater ambitions for the future. Its The goal is to have annual sales of 1.2 million vehicles next year, which is almost equal to the total number of electric vehicles produced by Chinese automakers in 2020.

This is a surprising goal, but even before the appearance of Hongguang Mini, Wuling created a winner in the market that defines the new era of driving. This Sino-US joint venture was established in 2002, and its business is the sale of minivans: reliable sliding-door workhorse cars, which earned the nickname “van” in Mandarin, and were the best-selling passenger car in China in 2017. Among them are rural roads used by millions of contractors and delivery drivers.

The buyers of the fuel-guzzling gray trucks are almost all men, which makes Wuling’s steering of the Hongguang Mini with a top speed of 100 kilometers (62 miles) and 12-inch wheels even more extraordinary. Soon after its debut in July last year, the automaker realized that this car is gaining popularity among young women, and it tends to adopt a method that disrupts traditional car sales.

“Our company’s philosophy is to produce anything that people need,” said Zhang Yiqin, head of brand marketing at Wuling, in an interview. “We pay close attention to our users. Only when consumers find that using electric vehicles is a comfortable thing, can they clear the barriers to adopting electric vehicles.”

To this end, Zhang has equipped his team with employees who understand Hongguang Mini’s customer base, and now about two-thirds of this customer base are women. The 35-year-old joked that he is the older politician in the group, with an average age of about 27. The wall of Wuling’s headquarters in Liuzhou is covered with slogans such as “Young and Desire”. Data from WAYS Information Technology shows that last year’s electric car sales were the highest in China.

According to Zhang, Wuling’s success on Hongguang Mini was driven by a targeted marketing campaign conducted almost entirely online. His team often communicates directly with consumers through various social media platforms. It is precisely because of customers’ requirements for more colors that the company has launched the latest version of Hongguang Mini-Macaron. It comes in avocado green, lemon yellow and white peach pink, with a solid roof as a contrast, imitating the vanilla cream sandwiched between French meringue candies of the same name.

This is also a key selling point of how they find a car-in addition to the lowest price point: Hongguang Mini drivers can customize their cars in a way that is not possible elsewhere.

Using “stickers”, the panel and body of the car can be modified. Some whirlwinds with Nike, some with outer space scenes resembling galaxies, and some cartoon characters from Hello Kitty and Doraemon. The original Hongguang Mini has about 20 different base colors, which can be switched, and buyers can also customize the interior.

Zorah Zhang (no relatives) is a typical customer. This 23-year-old young man is a fan of Japanese animator Hayao Miyazaki. He is the director of “My Neighbor Totoro”. This is a fantasy movie. The protagonist is called Cat Bus, a grinning cat, and the seat is covered. fur.

She drew her red Mini to resemble it, and spent about 15,000 yuan (US$2,300) covering the interior of the car with brown velvet cloth and installing night-glow lights on the roof.

“A lot of my friends have mini cars, and you can be seen everywhere in Liuzhou,” said Zhang, who lives with his parents (they drive BMW cars). “I like things that reflect my personality. If there are other things I like, I might change the appearance of the car again.”

Turning a set of wheels into fashion accessories may seem boring, but there is indeed a market to compete for.

Except for Liuzhou, the penetration rate of electric vehicles in China is still only about 6%, and competition is fierce. Tesla may be the loudest name, especially in big cities like Beijing and Shanghai, where its first super factory is located, but there are many from Weilai Motors to Xiaopeng Motors, Li Motors and Weimar Motors. New local entrants are squeezing in.

At the same time, other local companies, such as BYD, an automaker long-term supported by Warren Buffett, are increasing the competitiveness of electric vehicles, and international giants such as Volkswagen are investing billions of dollars in new electric product lineups.

Jochen Siebert, managing director of JSC Automotive, a Singapore consulting firm, said that because Chinese consumers are at a loss when choosing fossil-fuel vehicles, automakers need to provide drivers with what they want to survive.

“SAIC-GM-Wuling must always come up with new ideas to attract consumers,” Sibert said. Hongguang Mini is “an accessory, which means that it is a fashion item that will become obsolete sooner or later.”

At present, this is a strategy to bring dividends to Wuling. The company is 50.1% owned by Shanghai-based SAIC Motor, 44% by General Motors China, and 5.9% by Guangxi Automobile. A total of 1.6 million vehicles were sold last year. Although it was down about 4% from 2019 during the pandemic, Wuling’s new energy vehicle sales almost tripled to 174,000 units.

For General Motors-under the leadership of Chief Executive Mary Barra (Mary Barra) to redouble its efforts in electrification and autonomous driving-Hongguang Mini seems to be a boon. The automaker saw its Chinese auto joint venture revenue of US$9.9 billion in its first-quarter results announced last month, up from US$4.3 billion in the first three months of 2020. Income from its financial performance.

Although customer participation has made Hongguang Mini stand out from the crowd, cost has always been the main driver of its sales in China. In this country, many people find that the price of the Tesla Model 3 is out of reach, and its price is equivalent to $39,300. The basic Hongguang Mini starts at US$4,500, and even the new Macaron is priced at less than US$6,000.

Part of the reason why Wuling is able to mass produce cheap cars is its good supply chain management and its super-popular minivans. Many of Wuling’s suppliers have also set up manufacturing bases in Liuzhou, which helps to further control costs. This model is being copied by auto companies in other cities and provinces in China, which is flattering for Wuling, but as the prices of competitors’ cars fall, it also brings challenges.

Multinational car manufacturers are also paying attention to the field of compact electric vehicles. Daimler will manufacture an electric version of Smart in China with its own risk partners-for many people, this is a perfect mini-car.

The global semiconductor shortage has also put pressure on Wuling. Although Hongguang Mini is a basic electric car, it still needs more than 100 chips. Zhang said that the production of Hongguang Mini has been affected by the shortage, and the production of macaron is expected to drop by about 15% in May.

The high sales target for 2022 is the cornerstone of Wuling’s plan to maintain market leadership. Zhang said that following the launch of the convertible Hongguang Mini at the Shanghai Auto Show in April, it aims to release a mid-term improved version of the car later this year and is developing a two-seater electric car aimed at young men.

At the Wuling dealership in downtown Liuzhou, user experience manager Li Zhengguang said that there is a four-person team dedicated to new media. They use Douyin (a well-known in China) and Xiaohongshu (a trusted social shopping platform popular with young women) to communicate with potential customers and share photos and videos. Li, who used to sell diamond engagement rings, said that there is not much difference between jewelry and cars. He said that by creating a desire for cool products, buyers will come.

Siebert of JSC Automotive said that positioning Hongguang Mini as a coveted accessory rather than a cheap car in brand-focused China is great.

“In the past 20 years, always bringing surprises to the market and themselves has become the hallmark of SAIC-GM-Wuling,” he said. “They did a very good job because they focused on the right things. In terms of quality, when they were mainly making minivans, they are now in marketing.”





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