In China, Little-Known Electric Vehicle Maker Leaves Tesla in the Dust | Automotive Industry News

Since last July, a little-known automaker in southwest China has dominated the world’s largest electric car market, overtaking the biggest players and even Tesla Inc. almost every month with a tiny EV that starts at just $ 4,500.

The Hongguang Mini is the brainchild of SAIC-GM-Wuling Automobile Co., a joint venture between SAIC Motor Corp. and Guangxi Automobile Group Co., two state-backed automakers, and US giant General Motors Co.

Based in Liuzhou City, known for its limestone mountains and snail soup, the company – which has sold some 270,000 cars in nine months, making it the best-selling electric vehicle in China – has even bigger ambitions. big for the future. . It targets annual sales of 1.2 million vehicles next year, almost the number of electric vehicles produced by Chinese automakers in 2020 combined.

It’s a frowning target, but even before the Hongguang Mini, Wuling had a proven track record of producing winners in a market that defines the new era of driving. Established in 2002, the Sino-American joint venture built its business selling micro-vans: reliable workhorses with sliding doors that earned the nickname “bread car” in Mandarin, and were the most popular passenger vehicle. sold in China in 2017. Millions of them roads nationwide, used by contractors and delivery drivers.

Buyers of these fuel-guzzling gray pickup trucks are almost exclusively male, making Wuling’s pivot to the Hongguang Mini – which has a top speed of 100 kilometers (62 miles) per hour and 12-inch wheels – d ‘all the more extraordinary. Shortly after its debut last July, the automaker realized that the vehicle was gaining traction among young women, a phenomenon it leaned into with an approach that distorts preconceptions of how cars are sold.

“The mentality of our company is to produce whatever people need,” Zhang Yiqin, Wuling’s brand and marketing manager, said in an interview. “We closely monitor our users. Barriers to electric car adoption can only be removed when consumers find it comfortable to use them. “

To this end, Zhang has staffed his team of employees who include Hongguang Mini’s customer base, which is now approximately two-thirds female. . At 35, he jokes that he is the oldest statesman in the group with an average age of around 27. Slogans like “Young and Eager” are displayed on the walls of Wuling’s headquarters in Liuzhou, a city that adopted electric vehicles alongside the company with 30% of all electric cars sales last year, the rate highest in China, according to WAYS Information Technology.

Wuling’s success with the Hongguang Mini was driven by a targeted marketing campaign conducted almost entirely online, according to Zhang. Its team often communicates with consumers directly through various social media platforms, and it was a client’s request for more hues that prompted the company to come up with the latest iteration of Hongguang Mini – the Macaron. It’s available in avocado green, lemon yellow, and peach-pink white, with an optional solid-color roof for contrast, to mimic the vanilla buttercream that sandwiches the French meringue confectionery of the same name.

This is also how they landed on one of the car’s main selling points – besides its lowest price: Hongguang Mini drivers are able to customize their vehicles in a way that doesn’t is not possible elsewhere.

With the help of “stickers”, the panels and the body of the car can be transformed. Some sport the Nike swoosh, some have space scenes resembling galaxies, and others have cartoon characters from Hello Kitty and Doraemon. The original Hongguang Mini is available in around 20 different base colors, which can be changed, and buyers can customize the interior as well.

Zorah Zhang (no relationship) is a typical customer. The 23-year-old is a fan of Hayao Miyazaki, the Japanese animator who directed My Neighbor Totoro, a fantasy film featuring a character called The Catbus, a smiling feline whose seats are covered in fur.

She pimped her Hongguang Mini to look like her, spending around 15,000 yuan ($ 2,300) to cover the interior of the car in brown velvet and sprinkle the roof with lights that twinkle at night.

“A lot of my friends have the Mini, you see them everywhere in Liuzhou,” said Zhang, who lives with his parents (they drive a BMW sedan). “I like things that reflect my character. Maybe I will change the look of the car again if there are other things that I like.

As frivolous as turning a wheel set into a fashion accessory may seem, there is a real market to be seized.

Apart from Liuzhou, the penetration of electric vehicles in China is still only around 6% and the competition is fierce. Tesla may be the name that resonates the loudest, especially in big cities like Beijing and Shanghai, where its first Gigafactory is located, but a host of local new entrants from Nio Inc. to Xpeng Inc., Li Auto Inc . and WM Motor are piling up.

At the same time, other local players like BYD Co., a carmaker long-backed by Warren Buffett, are improving their EV game, and international behemoths like Volkswagen AG are investing billions of dollars in new electric lines.

With Chinese consumers overwhelmed with choice when fossil fuel cars are added to the mix, automakers need to give motorists what they want to survive, said Jochen Siebert, managing director of Singapore consulting firm JSC Automotive.

“SAIC-GM-Wuling must constantly come up with new ideas to attract consumers,” said Siebert. The Hongguang Mini is “a kind of accessory, which means it’s a fashion item that may sooner or later go out of fashion.”

For now, this is a strategy that is paying Wuling dividends. The company, 50.1% owned by Shanghai-based SAIC, 44% by GM’s China unit and 5.9% by Guangxi Automobile, sold 1.6 million vehicles in total last year. . While that was down about 4% from 2019 in the midst of the pandemic, Wuling’s new energy vehicle sales nearly tripled to 174,000 units.

For GM – which doubles electrification and autonomous driving under the direction of general manager Mary Barra – the Hongguang Mini seems to have been a godsend. The automaker reported $ 9.9 billion in revenue from its auto joint ventures in China in the first quarter results of last month, up from $ 4.3 billion in the first three months of 2020. GM, which has several other partnerships in China, does not break with that of Wuling. revenues in its financial results.

While customer engagement has set the Hongguang Mini apart, cost has been the main driver of its successful sales in a country where many find the sticker price of a Tesla Model 3, which sells for the equivalent of $ 39,300, out of reach. The base Hongguang Mini starts at $ 4,500, and even the new Macaron sells for under $ 6,000.

Wuling has been able to produce inexpensive cars thanks in part to its good supply chain management, refined with the ultra-popular minivans. . . . e Many of Wuling’s suppliers have also established manufacturing bases in Liuzhou, which has helped keep costs even further. It is a model that is being replicated by automakers in other cities and provinces in China, flattering for Wuling, but also difficult as the prices of its competitors’ cars fall. ,

Multinational automakers are also eyeing the compact electric vehicle space, with Daimler AG set to manufacture an electric version of the Smart – many the tiny car consumed – in China with its own corporate partner.

The global semiconductor shortage is also weighing on Wuling, the Hongguang Mini, despite being a basic EV, still requiring more than 100 chips. Hongguang Mini’s production was affected by the shortfall, with Macaron production expected to be down about 15% in May, Zhang said. . .

The high sales target for 2022 is the cornerstone of Wuling’s plan to maintain its momentum as a market leader. After showcasing a Hongguang Mini convertible at the Shanghai Auto Show in April, the company aims to launch a mid-cycle improvement to the vehicle later this year and is working on a two-seater electric vehicle aimed at younger men. Zhang said.

At a Wuling dealership in downtown Liuzhou, user experience manager Li Zhengguang said there was a four-person team that only focused on new media. . They communicate with potential customers using Douyin, as TikTok is known in China, and Little Red Book, a trusted social shopping platform popular with young women, sharing photos and videos. Li, who sold diamond engagement rings, says there isn’t much of a difference between jewelry and cars. Create the desire for a cool product and the buyers will come, he says.

Presenting the Hongguang Mini not as a cheap car, but as a coveted accessory in brand-conscious China is brilliant, said Siebert of JSC Automotive. .

“It has become a hallmark of SAIC-GM-Wuling over the past 20 years to always surprise the market and themselves,” he said. “They have been extremely successful because they focus on the right things. On quality, when they mainly made microvans, and now on marketing.


Source link

About Gail Mena

Gail Mena

Check Also

Ex-New York restaurateur model – for her twin sister’s husband

It’s a family affair! The Swedish-born wife of a famous New York restaurateur dumped him …

Leave a Reply

Your email address will not be published. Required fields are marked *