From sticking to the high-end to surviving downward, talk about the new forces. Why are you anxious to open the ＂trumpet＂？

Produced by | Sohu Auto Sohu New Car

Author | Li Wei

Editor | Ma Liang

I remember that when I was a child, I read The Three Kingdoms at the beginning: "Great things in the world must be separated if they are combined for a long time, and the combination of Wei Lai, Ideal and Tucki seems to have become the new" Three Kingdoms "for new forces to break into the high-end luxury car market. Of course, this time we are not talking about their "combination", but about their own "points". Recently, both Weilai and Tucki have exposed their second brands with lower positioning, and Ideality seems to want to open up new product lines through the less successful MEGA, and has plans to launch low-priced models. Then, why are these new forces in a hurry to open the "trumpet"?

● The turn of new forces to build cars

Unlike those traditional China brands that have gradually developed from low-end to high-end markets, the new car-making forces we all talk about usually choose to enter the market with mid-to high-end products, which not only means that they can make more rich profits, but also help the innovation and application of cutting-edge technologies, and also establish their own higher brand image and tonality.

The most typical one is Weilai, whose target is always the German luxury giant BBA (Mercedes-Benz, BMW, Audi), and we can also see Weilai’s exhibition hall in the middle and high-end business districts of major cities. Judging from the sales achievement of 160,000 yuan in 2023, Weilai’s brand image has initially stood firm in the middle and high-end market (300,000-500,000 yuan), but compared with the huge domestic base, there is still huge room for improvement. So we saw the second brand that has announced its official name-"Ledao".

According to the previous news, "Ledao" will be released in the first half of May, and it will focus on the new energy family car market of 200,000-300,000 yuan. All models will be developed based on NT3.0, the third generation technology platform of Weilai. Judging from the spy photos previously exposed, Ledao’s first model is a pure electric slip-back SUV, or it will be named L60, which will be unveiled in the second quarter of this year, listed in the third quarter and delivered in the fourth quarter.

Different from Weilai’s existing products, Ledao L60 (tentatively named) is mainly based on Model Y. The official revealed that the cost of this car is about 10% lower than that of Tesla Model Y, and the price has an advantage; With the listing of Xiaomi SU7, it seems that this model has more late-comer advantages in pricing. At the same time, Weilai has also planned about 60kWh and 90kWh versions for this car, and will be compatible with Weilai’s power exchange service.

Not only that, but in addition to Ledao, Weilai will also launch the third brand-Firefly. The spy photos of the first model have been exposed. It is said that it also focuses on exchangeable electricity. It is estimated that the price will be controlled within 200,000, and it will be produced in Hefei, Anhui, with high cost performance.

Unlike Weilai’s high-profile brand image, Tucki opened its early market through Tucki G3, whose price is relatively close to the people. However, judging from the recent product layout and planning, with the listing of Tucki X9, whose price has exceeded 400,000 yuan, the focus of the brand has shifted to higher-priced models. Judging from the sales achievement of 142,000 vehicles in 2023, Tucki can’t achieve scale effect with existing products, so it is imperative to launch new brands.

In fact, Tucki officials have confirmed the existence of the new brand, which is expected to be released at the Beijing Auto Show. Combined with the previous news, the brand expects the project code to be "MONA", which is positioned at the level of 100,000-150,000 yuan, and the first product will be listed in the third quarter of 2024. Xpeng Motors will integrate the technical foundation of Didi Chuche in MONA project, and add the intelligent software capabilities such as XNGP and intelligent cockpit developed by Xpeng Motors, and the related products will be manufactured in its own production base in Xpeng Motors.

It is worth mentioning that Volkswagen has also signed a technical cooperation agreement with Tucki, and announced that it will jointly develop two intelligent networked vehicles for the China market. Tucki will provide the platform and technology, and Volkswagen will do engineering research and development, design and manufacture. The first two models have been confirmed to be listed in 2026, and the first product will be an SUV. Although this is not a new brand, it is also a new change in the development direction of new forces compared with traditional overseas car companies.

At present, LI has not made it clear whether it will launch multi-brand strategy, but from its product planning, it can smell the breath of exploring the middle market. Ideally, the price of the upcoming L6 model is expected to be lower than the 300,000-yuan mark for the first time, changing the pricing tradition of all previous models to more than 300,000 yuan. From 450,000 yuan for L9, 560,000 yuan for MEGA, to less than 300,000 yuan for L6, Ideal is also trying to leverage price to incite a broader market demand.

In fact, from the above summary of "Wei Xiaoli", it is not difficult to see that with the gradual maturity of the new car-making forces, the greatest significance of sub-brands lies in their ability to break the thinking framework of existing brands, enrich their own product matrix, and capture more users with different consumption levels through differentiated competition. After all, high-end luxury and pragmatism are contradictory, and it is impossible for 20-year-old users and 50-year-old users to have the same car demand. These may be one of the reasons why new power brands launch new brands, but there may be others in combination with the current market. ….

The road to survival under "involution"

At present, the new energy market of 150,000-300,000+concentrates the fiercest competitive firepower of domestic new energy vehicle companies, including new power vehicle companies, traditional China brands, and more and more new car-making players: with the help of Huawei’s blessing, the world has moved to the front desk, with sales exceeding 10,000 in three months; The admission of Xiaomi SU7 at least taught the car companies a lesson in marketing; The practice of creating brand-new brands and grafting mature supply chains and production lines has also been played by Changan, SAIC, Geely, Great Wall and BYD. As for the traditional multinational car giants such as Volkswagen, GM, Toyota and BBA, they will naturally not miss the domestic electric vehicle feast, and continue to increase the pace of launching new cars in the field of smart electric vehicles.

As for the mature "Wei Xiaoli", it seems that it has reached the "year of no doubt", which not only lacks some new-comer spirit, but also faces the reality of survival. It is well known that the new forces making cars are losing money. In 2023, Weilai’s net loss reached 20.72 billion yuan, an increase of 6.283 billion yuan over the previous year. Xpeng Motors’s net loss in 2023 was 10.38 billion yuan, up 13.6% year-on-year. Due to the failure to achieve the scale effect, new car-making enterprises such as Weilai and Tucki have been unable to achieve profitability, which also makes Weimar, who has gone bankrupt, and Gao He, who is still lying in the ICU, smile at each other. ….

Therefore, the underlying reasons for Weilai and Tucki to launch sub-brands are to reduce costs, reduce losses and promote the profitability process. Once the value chain of a new car enterprise is formed, the marginal cost of launching a new brand is relatively low, and the existing technology, platform, production, marketing and channel service capabilities can be fully utilized. Covering multiple market segments through multiple brands can effectively increase sales and market share, so as to improve financial performance quickly.

In fact, both Tucki and Weilai have said before that they expect to turn losses into profits or break even in 2025, which means that Weilai and Tucki have only two years to achieve their profit targets, and marching into the lower-priced market with a larger share has become their common choice.

Can the multi-brand road really work?

I have to say that it is not an easy task to run many brands. If we want to make enough differentiation between different sub-brands, it means that car companies need to have sufficient technical reserves, otherwise it will inevitably form mutual relations between sub-brands. For intelligent electric vehicles, at least there should be enough separation in the core areas of vehicle platform, three-electric system, intelligent cockpit and automatic driving. How to create differentiation with as little capital investment and limited technical reserves within a limited pricing interval is a challenge they have to face.

In addition, with the cost reduction, for Weilai, a new force with high investment in service and power exchange capacity as its selling point, it is bound to choose between price and selling point. And the third brand of Weilai, which has lost its service and power exchange, depends on what to kill the quartet in the sinking market?

At the same time, positioning different series under the same brand and launching brand-new sub-brands can certainly establish a complete product matrix, but it also means that no matter from marketing, marketing channels, or even car owners’ community apps, we must start from scratch. The increased operating costs behind it will also be a big burden.

Say at the end:

The strategy of "having more children and fighting" once pursued by China brand seems to be not practical in today’s market, and it is obviously not the will of the new forces that are maturing. Therefore, the second brand under the "prenatal and postnatal care" seems to be a more secure way. After all, with the increase of the penetration rate of new energy vehicles, it will be more and more difficult to eat the world through one or two explosive products, and the new energy market will blossom like the current fuel vehicle market.