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Joint venture Class A car, a dilemma

Publish Date: 2023.02.27

The traditional advantages of the joint venture brand A cars are losing their competitiveness.

  

  Who would have thought that China's auto market has been in a "involution" state since last year. As a result, the major auto companies continued to "bombard" this year, with the former BYD Qin PLUS DM-i championship version starting at 9.98 million yuan, and the later Kia new K3, which brought comprehensive discounts and the "release price" starting at 8.99 million yuan, have refreshed the industry's understanding.

  

  Previously, we have always stressed that "getting the intermediate car wins the world". For any auto company, the A-class car is the support for its survival. When Chinese brands are bombarded with an irrational strategy, the joint venture brands that have won for decades finally feel unprecedented pressure.

  

  Of course, the stronger joint-venture brands still have the capital to compete, and the second-tier joint-venture brands are the most affected. Either take the initiative to lower the price, or offer substantial discounts at the terminal. Dongfeng Peugeot new 408, Kia new K3, Buick Yinglang, Chevrolet Coruze and other models are among them.

  

  合资A级轿车,进退两难

  

  In fact, in order to maintain market share, such as Toyota, Volkswagen and Honda, there is also a certain margin of preference in the terminal market. There were 19 Class A vehicles with an annual sales of more than 100000 vehicles last year, of which the joint venture brands accounted for only 11 seats, and the once familiar Langdong and Koluze vehicles disappeared directly.

  

  The brilliance of the joint venture brand is no longer

  

  There was no such detailed market segment in China's auto market. Whether it was SAIC-Volkswagen Santana in 1983 or Buick Sail in 2000, it could be seen as the beginning of the first family car for consumers. However, although these two cars have similar prices, they are completely different in size, let alone compared with the current Class A cars.

  

  Since then, Japan, South Korea, Germany, France, Italy, the United States and other countries have basically launched car products in China, and also had a highlight moment. Due to the historical reasons of the weak industrial base, Chinese auto brands did not have much room for development at that time. The joint venture brand is favored by consumers because of its durable leather, economy and fuel economy.

  

  In the past few decades, the joint venture brand has completed the renewal of products from generation to generation, and the head force has also begun to appear iteration. From Santana, Jetta and Fukang, the old three types of cars, to Jingsan Corolla, Bora and Peugeot 307, and then to the new three types of Fumeilai, Elantra and Kaiyue, Jiangshan generation has talents, each leading the way.

  

  In the past decade, the process of the Yangtze River's backward wave pushing forward wave has become slow, and the gap in price and size has become smaller and smaller. Corolla, Langyi and Xuanyi began to take turns in the sales of A-class cars. Up to now, these three cars still have many choices that consumers can't get around.

  

  Even if the "Great Flag of Changes in the City", the value provided by these joint-venture brand A-class cars to consumers has not changed much. However, China's scientific and technological development has reached unprecedented speed in the past decade, leading to changes in consumer psychology and consumption habits.

  

  In addition to the reliable engine, gearbox and chassis, as well as the personalization of car styling and the diversification of functional configuration, have become the focus of consumers. When consumer demand shifts, the strong position of the joint-venture brand A-class cars also begins to crack.

  

  Some classic models can be active in this market, while most other models have to regretfully choose to exit. Buick Kaiyue is difficult to maintain its glory, and Volkswagen Jetta is replaced by a sub-brand. In the increasingly competitive automotive market, the rule of survival of the fittest is cruel, and products that cannot keep up with the changes of the times are abandoned.

  

  合资A级轿车,进退两难

  

  Today, Rao, Carola, Langyi and Xuanyi are also facing the same situation. In February of this year, the discount rate of these three vehicles exceeded 20000 yuan, and the once unbeatable joint venture brand had to lower its head. When the incremental market becomes the stock market, and when the new energy vehicles are in a desperate situation, all the variables are unknown.

  

  The failure of the joint venture brand in the field of sedan is not only reflected in the price, but also in the inability of the A+products to succeed. Not to mention the decline of Hyundai Mingtu and Kia K4, Toyota Lingshang/Asian Lion, Volkswagen Lingdu L, Buick Weilang, etc. have successively failed. The joint venture brands that once led the development of China's passenger car market seem to be losing their proud market share.

  

  Mainstream joint-venture brands can also have higher-level models, while those second-tier joint-venture brands have begun to consider the issue of repricing their products. With the price of Class B vehicles of these vulnerable brands dropping to 150000 yuan, the price of Class A vehicles is also breaking the threshold. But what if the price strategy fails?

  

  合资A级轿车,进退两难

  

  Give up the A-class car market? Obviously impossible. However, the only thing that can be sure is that as China's automobile market enters a new era, the traditional advantages of the joint venture brand A vehicles are losing their competitiveness under the attack of high-end brands gradually dropping, independent brands eroding upward, and the impact of the new energy wave.

  

  Independent brands rose

  

  If Chinese brands can occupy an absolute dominant position in a market segment, it is still the A-class SUV market. Make use of the differences in size, configuration, power, space and price to make the joint venture brands have no way to enter. However, this strategy did not apply to the A-class car market before. It can be said that Chinese brand cars have embarked on a difficult road from the beginning.

  

  At one time, Chinese brands could only gain a few market shares by virtue of cheaper small cars. From Chery QQ, Geely Panda and Changan Benz, we can see that the original sales leaders only met the needs of consumers. First, it can't win more profits for auto companies, and second, it can't provide momentum for the brand.

  

  It was not until the emergence of Emgrand EC7 and Chang'an Yidong that the Chinese brand sedan market ushered in the long-awaited dawn. On the basis of the quality close to the joint venture brand, we also try to compete with the joint venture brand by means of differentiation. After seeing the initial success of these models, other Chinese brands began to follow suit.

  

  Standing on the tuyere, pigs can fly. The past few decades have been the golden age of China's automobile industry. Both Chinese brand SUVs and sedan products have encountered a growing consumer market. Whenever there is a good model, consumers can pay for it. However, such growth is obviously not healthy and long-term.

  

  Product quality problems and brand failures are common. Lifan, Zhongtai, Brilliance, Cheetah and so on have finally become the fleeting memories of China's auto market. It is the so-called natural selection and survival of the fittest that these disappearing brands are not worthy of sympathy. On the contrary, the car companies that can survive are even more awesome.

  

  China needs auto companies that strive to improve technology and quality. They are the real pillars of China's auto industry. So today, we can still see Geely Emgrand and Chang'an Yidong go deep into the hinterland of the joint venture brand and firmly occupy the forefront of the A-class car market. China's auto industry also needs these models with heritage to try to change the inherent impression of Chinese people.

  

  "There must be a war between independence and joint venture, which cannot be avoided." On the one hand, it is the tenacity of mature products, and on the other hand, it is to continue to bring forth new ideas and continue to face new challenges. In the field of cars, Geely has created a combination of Emgrand+Emgrand L+Piray+Starry. Chang'an also takes advantage of the success and pursuit. The product matrix of Yidong+Yida+UNI-V+Ruicheng PLUS will make the A-level car maintenance impossible.

  

  合资A级轿车,进退两难

  

  Of course, there is also the rapid rise of new energy. BYD Qin PLUS, Aian S and other models change lanes and overtake. Both the product strength, pricing strategy and consumer acceptance have surprised the joint venture brand in a cold sweat. These models not only surpass the joint venture brands in product value, but also bring a lot of profits to the car companies themselves, which is the beginning of the Chinese brand's clarion call.

  

  Although from the current point of view, the sales volume and momentum of Class A vehicles of the joint venture brand are generally higher than those of Chinese brands. However, there is evidence to follow that in the small car market, the joint venture brands have broken up and replaced by the electric products of Chinese brands. From small cars to A-class cars, there is a small gap, and Chinese brands are about to cross over.

  

  From the perspective of the product layout of the joint venture brand, it is basically saturated. This year is a big year for the products of Chinese automobile brands. Whether it is Geely, Chang'an, Chery, or BYD, Wuling, Haval, there will be a large number of fuel vehicles and new energy vehicles pouring into the market. At that time, it was the beginning of the decisive battle.

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