With the introduction of pure electric cars next year, VW may struggle to escape the competition from entry-level models.

        Recently, it was reported that the first model of VW ID family, ID.3, will be introduced into the domestic market next year, when it will be installed in SAIC Volkswagen and FAW-Volkswagen respectively. As A class A pure electric car, ID.3 is expected to become the second ID entering the Chinese market after ID.4. Family member.

          Contacted with relevant person of Volkswagen (China), who said that Volkswagen's electric vehicle offensive will not stop, and will provide complete ID to Chinese consumers in the future. Model line to meet diverse needs.

        In The European market, Volkswagen ID.3, a newly listed company, won the no.1 in new energy sales in October. However, in China's new energy vehicle market, where the competition is fierce and hot style stands in great number, how Volkswagen ID.3 will build its own differentiation advantage compared with other competitive models of the same level, and how to avoid following the path of pure electric volta and pure electric golf will become the key game to be solved.

The twists and turns of ID.3

         The "emissions gate" scandal of 2015 caused Volkswagen to lose its reputation in the North American market and had to accelerate the transformation of electrification. Against this backdrop, Volkswagen has successively launched "2025 strategy" and "Roadmap E" strategy, and announced the launch of ID based on the new ELECTRIC MEB platform in 2016. The first concept car in the series, the ID Neo.

         Since then, the ID. Series of the first production of the car speculation and rumors abound. It wasn't until the debut of the compact hatchback ID.3 at the Frankfurt International Motor Show in September 2019 that the family's mass-produced "eldest son" status was confirmed. The car was expected to go into production in November 2019 and be delivered first to Europe in the spring of 2020, with a starting price of about 30,000 euros, according to the statement at the time.

        In February, German magazine Manager said VW's ID.3 was still struggling with "a large number" of software problems that could derail plans to launch ID.3 this summer. In July, German newspaper Handelsblad reported that the head of Volkswagen's software department had resigned due to the failure of the eighth generation of golf and ID.3 software.

        Despite the unresolved issues, vw officially opened reservations for the ID.3 in late July, and deliveries began the following month. According to Jato Dynamics, the Volkswagen ID.3 beat out popular Renault Zoe and Tesla Model 3 models to become the monthly new energy sales champion in Europe in October.

China's rising new energy vehicle market

         In 2010, relevant departments decided to invest a huge amount of money in the next decade to build an industrial chain of new energy vehicles. Since then, with the support of the policy, the annual sales of New energy vehicles in China have been climbing year after year, ranking first in the world for five consecutive years since 2015.

         The top five new energy vehicle sales in 2019 are BaiC New Energy EU series, BYD Yuan EV, Baojun New Energy, Chery eQ, and BYD Tang DM, according to the Passenger Federation. Except FOR BYD Tang DM, other models are targeted at the low - and mid-end market.

       But the situation did not last. In the first half of 2020, Tesla Model 3, BYD Qin New Energy, GaC Ai 'an S, Volvo XC60 New Energy and NexteV ES6 became the top five new energy vehicles. Three of the five models are positioned at the high end and two are positioned at the mid-end.

         It is worth noting that in the pure electric minicar market, Chery EQ, Great Wall Euler, Wuling Hongguang and so on have performed very well, and have almost carved up the market. Thus, "high-end" and "cost-effective" may have become the two major labels of China's new energy vehicle market.

Avoid homogeneous competition or puzzles

         As for the ID.3's European title, Jato Dynamics analysts point out that the key to its success is its relatively affordable price. Unlike the European new-energy car market, the ID.3, which officially sells for 30,000 euros, has no advantage even with subsidies when converted into Renminbi.

        At the 2019 Frankfurt Motor Show, Thomas Ulbrich, head of electric mobility of Volkswagen passenger vehicle brand, once told the media that ID.3 is the first step of Volkswagen's electric campaign and a very important starting point in the electric campaign. Meanwhile, Volkswagen said ID.3 will first be sold in Europe, followed by ID.4, which will be sold globally in China.

       So far, the models ID.4 X and ID.4 CROZZ imported from SAIC Volkswagen and FAW-Volkswagen have been put into production respectively. Zhang Xiang, an auto analyst, believes that the ID.4's main competitor is Tesla. "If sales are good, it may continue to push into the high-end market; "If it's not selling well, it could be a sign that the product strategy needs to change, and that's why we're launching a smaller ID.3."

        He also pointed out that before ID.4, the sales volume of the same grade products of Volkswagen in China, Namely Langyi pure electricity and Golf pure electricity, were not satisfactory. It is worth noting that both models are priced at around 150,000 yuan.

        In the Red Sea of China's new energy vehicle market, whether going up or down, differentiated competitive advantage is undoubtedly the key to product differentiation. As the "starting point of mass electrification offensive", ID.3 has the previous lessons of Lavy pure electricity and Golf pure electricity. If the European market offensive is "transferred" to the "high-end" and "cost-effective" Chinese market, we still need to be alert to the risk of acculturation.