Auto market shakes to start independent brand will face big exam

Since entering February, Beijing’s 4S stores have all been deserted and the scene of incitement at the end of December last year has completely become the past.

According to the statistics of China Association of Automobile Manufacturers, in February of this year, domestic automobile production and sales ended the first two years of rapid growth, and production and sales only achieved 1,260,400 and 1,267,700 vehicles, a decrease of 29.89% and 33.09% from the previous month, respectively, compared with the previous year. The year-on-year increase was 4.48% and 4.57% respectively. In the overall slowdown of the market, the decline in sales of self-owned brands is even more pronounced. The data shows that in February, the self-owned brand sold a total of 459,900 complete vehicles, which was a decrease of 35.04% month-on-month and 4.3% year-on-year. In terms of market share, sales of self-owned brands accounted for 47.24% of the total passenger vehicle sales in February, although the share increased by 1.23 percentage points from the previous quarter, but it was down by 3.39 percentage points year-on-year.

In February each year, the decline in the automobile market is the inertia of the Chinese auto market. Due to the holiday breaks and fewer working days during the Spring Festival, the production and sales volumes of the major auto makers all fell in February. In addition, as automakers tend to accumulate stocks at dealerships at the beginning of the year, resulting in high sales figures in January, and as inventory returns to normal in February, sales volume will also decrease. However, the reason for the decline in the auto market's sales volume in February this year was not so simple. In particular, the self-owned brands have seen a year-on-year decline both in comparison with the previous quarter, which is a deeper reason.

With the cancellation of the purchase tax exemption policy and the car-to-country policy, the big cities represented by Beijing have issued restrictions on vehicles or restrictions, and the sales of cars in major cities have significantly declined. Beijing’s sales in the first quarter are expected to drop by 60% year-on-year, which will be a heavy blow to self-owned brands. Secondly, the price of the joint venture's own brand was further explored, further squeezing the living space of independent brands. For example, the lowest selling price of models such as Shanghai General Sail and Dongfeng Nissan Machi has approached 50,000 yuan. The more difficult it is to parry. In addition, since the Spring Festival, domestic oil prices have continued to soar, parking fees, vehicle and boat taxes have also gradually increased, so that many consumers are prepared to buy cars.

The decline in sales volume has caused subtle changes in the ranking of self-owned brands. According to the data, in February, Chery sold 32,711 vehicles, a year-on-year decrease of 12.8%; Geely sold 30,539 vehicles, a year-on-year drop of 2%; BYD sold 26,521 vehicles, a year-on-year decrease of 22.4%. According to statistics from the Ministry of Public Security in January 2011, Geely Automobile had 52909 licenses in January, ranking seventh in the industry and ranking first in the self-owned brand camp; Chery ranked eighth in sales of 51,760; BYD 49734 cars ranked ninth.

Ever since, the sales rankings of the three major independent brands have bottomed out, and after the market fluctuations, why is Geely's strongest anti-strike ability? Liu Jinliang, vice president of Geely and general manager of the sales company, believes that Geely's latecomer advantage comes from a strategic transformation in 2007. After bidding farewell to low quality and low price, Geely began to pursue the manufacturing of the safest, most environmentally friendly, most energy-efficient cars. In the engine, transmission, appearance, space and other designs have achieved a qualitative leap, emgrand EC7, Panda has received a C-NCAP five-star safety rating. In addition, in the aspect of marketing strategy, Geely is changing from “price-oriented” to “customer-value-oriented”, actively sinking channels, exploring new marketing modes such as online group buying, Taobao flagship store, and TV shopping to provide more professional services to consumers. Service.

Last year, the Emgrand EC7 sold more than 70,000 units and sold more than 100,000 units in a year. Dihao EC8 has been in short supply since its listing in September last year. This shows that independent brands have the ability to do quality and extend the battlefield to the joint venture brand site.

While striving to cultivate internal strength, Geely actively integrates advanced technologies from the world and shares international quality resources through overseas mergers and acquisitions. Holding British Manganese Bronze, fully acquiring Australia's DSI, and wholly-owned Volvo, Geely gained a lot of advanced technology and intellectual property while allowing the people to be proud. For example, Geely will launch several models equipped with DSI transmissions this year. Volvo's safety technology and experience are indispensable for Geely who is creating safety labels.

Analyze the market performance of the independent brands in February and the underlying reasons behind them. Strategic transformation is the only way for independent brands to achieve self-transcendence. Although in the short-term, Geely may have sacrificed sales growth as in previous years, once it has gone through the pain period, it will be able to achieve full-scale strike.