Competition And Differentiation: Resumption Of China'S Luxury Car Market In 2020

With the emergence of new forces, China's luxury car market will face great changes. The first camp luxury car brand competition is tight, the second-line luxury car market structure is also quietly changing.

In 2020, the trend of "prosperous production and sales" in China's luxury car market will continue at the beginning of 2021.

"The test drive is not available for the moment. There are more test drives on weekends, and it will be better on weekdays. If there is a need for a test drive, you can call in advance to make an appointment." On Sunday afternoon, January 24, at a Lincoln Center in Beijing, sales staff patiently explained to customers who came to see the car.

On the same day, the tasting meeting of the new generation Lincoln Navigator, the third domestic model of Lincoln, was not over. Even though the new car is not yet on the market, the pre-sale price of RMB 330800-485800 and the product positioning of Mercedes Benz GLC, BMW X3 and Audi's q5l still attract consumers to consult.

"This car is made in the factory in Hangzhou, but most of the accessories are imported. Domestic products will not affect the quality and quality of the products. " The sales staff in the store told the 21st century economic report that "the localization of adventurers is the best proof. The average monthly sales volume can reach 4500 vehicles. In our store, 60 vehicles can be sold in a month. There are many new customers introduced by old customers."

Sales staff are also busy in the FAW Volkswagen Audi exhibition hall, 1.5 km away from Lincoln Center. Two brand-new Audi A3, which just went on sale on the evening of January 23, were placed in a prominent position in the exhibition hall.

"The last generation A3 was launched eight years ago, and the new A3 has great changes in appearance and interior. What's more, the current price of this car is very suitable. The landing price is almost the guidance price of the new car, which saves the purchase tax and insurance expenses, which is equivalent to a discount of nearly 20% on the basis of the guided price. " Shop sales staff told reporters, "because Audi wants to build this car into a blockbuster, of course, it's also to boost sales."

As a matter of fact, compared with BMW 1 series and Mercedes Benz brand-new A-class cars which completed the replacement two years ago and entered the growth period, the new A3 of Audi is not too early.

With the arrival of A3, Audi also officially launched the first shot in the luxury car market competition in 2021.

In Beijing, the busy weekend of Lincoln and Audi 4S stores has not been affected by the epidemic, which is similar to the busy and competitive situation in China's luxury car market in 2020.

Under the impact of the epidemic, China has become the only market still growing in the global mainstream market. In this growing market, luxury brands have also become the only growth segment.

According to the data of the Federation of passenger cars, the sales volume of luxury cars in 2020 will be 2529100, with a year-on-year increase of 14.7%. The market share of luxury cars will reach a new high of 13%.

At the same time, this is also the luxury car in China's overall automobile market for three consecutive years of decline, three consecutive years against the market. According to the data, the sales volume of luxury cars in 2018 and 2019 increased by 17.6% and 11.7% respectively.

Among them, BMW, Mercedes Benz and Audi three first-line luxury brands (BBA) in 2020 to create a record high since entering the Chinese market and become the core driving force of luxury car market growth.

As for the camp of second-line luxury brands, competition is more colorful. Lexus and Porsche have kept up their momentum as always. American luxury brand Lincoln has sprung up and won the "entrance ticket" of the second-line luxury market. Tesla has hit this market with a very lethal price strategy, and the performance of local brands Hongqi and Weilai is also commendable. Of course, the lacklustre performance of Jaguar Land Rover and Infiniti also makes the differentiation of this market segment more serious.

China's luxury car market changes in this competition and differentiation, quietly attacked.

Who is the real champion?

"Luxury cars account for an increasing proportion of the passenger car market. More and more consumers choose the second car or even the first one, which promotes the sales of luxury cars. "

On January 25, sun Feng, vice president of Auto Dealers Association of all China Federation of industry and Commerce and strategic executive vice president of Beijing Yuntong Guorong Investment Group Co., Ltd., pointed out in an interview with 21st century economic reporter.

There is no doubt that BBA, because of its large volume, has the greatest role in promoting China's luxury car market. According to official data, BMW group sold 777400 new cars (including BMW and mini) in China, with a year-on-year increase of 7.4%; Mercedes Benz sold 774400 vehicles in China, an increase of 11.7%; the total sales volume of Audi brand in China's automobile market was 726300, an increase of 5.4% year-on-year.

Due to the different statistical caliber, the competition between BBA for "sales champion" is becoming more and more fierce.

"From a single brand point of view, the most noteworthy is Mercedes Benz. In 2020, the sales volume will reach 758000 vehicles (excluding smart), with a year-on-year increase of 12%, replacing BMW (748000 vehicles, excluding mini) and becoming the annual sales champion of luxury car brands in China. " According to he Lun, President of the Automotive Research Institute of Netnews agency, the ranking of China's luxury car market in 2020 is in line with the global ranking for the first time.

It is undeniable that Audi has monopolized the first place in the Chinese market for a long time. Now BMW and Mercedes Benz rotate alternately. Whether the ranking exchange of the three enterprises in the future will become the "new normal" in China's luxury car market deserves attention.

Of course, Audi is not "convinced" and repeatedly emphasizes its leading position in domestic vehicles. "In 2020, FAW Volkswagen Audi delivered 674700 domestic cars, an increase of 7% over the same period of the same period last year, surpassing the second place of more than 60000 vehicles, maintaining the status of domestic luxury brand car sales champion." Sun Huibin, executive deputy general manager of FAW Volkswagen Audi sales division, pointed out in an interview with 21st century economic report on January 22.

In fact, who is the sales champion is not the most important, but the change between the three. In terms of total volume, compared with the sales data in 2019, the gap between Mercedes Benz and BMW has narrowed from 20000 to 3000; however, the gap between Mercedes Benz and Audi has increased from 12000 to nearly 50000.

More important is the quality of sales. "From the perspective of sales quality, that is, profitability, BMW should also be the best among the three enterprises; followed by Mercedes Benz, the sales quality of Mercedes Benz in the fourth quarter also rebounded significantly; although Audi's performance in 2020 is better than that in 2019, it is relatively weak among the three enterprises." A dealer investor familiar with the luxury car market said.

Obviously, BMW's systematic operation has not been affected by the change of coach. On June 24 this year, Liu Zhi, the former president of BMW China Automobile Trade Co., Ltd., abruptly resigned and was replaced by Shao bin, vice president.

The above industry insiders stressed that the terminal prices of Mercedes Benz and BMW brands are in the process of callback, and the current discount is basically around 10%. However, Audi brand has the "price for volume" and the terminal discount is about 18% - 20%.

In the process of visiting dealers, the reporter also found that the price of Audi's brand-new A3 terminal has been discounted by nearly 20%.

Although the sales performance of BMW, Mercedes Benz and Audi are different, the pattern of BBA in luxury car market is hard to shake in a short time.

"At present, dealers are still optimistic about the luxury car market, and BBA still occupies a large share of the luxury car market." Sun Feng predicts that there will still be 5% - 10% growth space for luxury car sales in China in 2021.

Of course, the biggest variable in the first-line luxury car market is whether Audi can return to the first place with the help of a new joint venture, SAIC Audi, in the next two years.

Change of pattern

In the first camp luxury car brand competition, the second-line luxury car market pattern is quietly changing.

According to the sales data released by various brands, in 2020, Cadillac will lead the second tier luxury brands with a cumulative sales volume of over 230000 vehicles, with a year-on-year increase of 8.2%; Lexus ranks second with the annual sales volume of 223600 vehicles, a year-on-year increase of 12%; unexpectedly, the cumulative sales volume of the independent luxury brand Hongqi in 2020 will exceed 200000, which not only achieves the sales target set at the beginning of the year Volvo, which has an annual sales volume of 166300 vehicles, ranks third among the second-line luxury brands, while Volvo falls to the fourth.

"Hongqi is not only an astonishing increase in total sales, but also a good performance of H9, the flagship model of Hongqi, which was launched in August, which greatly increases the gold content of Hongqi brand's rapid growth. It can be said that the launch of H9 has ushered in a new era of luxury cars in China." He Lun pointed out, "although there is still a big gap compared with the same level of BBA cars, but as the first C-class sedan with a starting price of more than 300000 yuan, such performance is not easy."

In fact, as the biggest "black horse" among luxury brands in 2020, red flag plans to double its sales volume in 2021, hitting the sales target of 400000 vehicles. This also means that the red flag will compete with Cadillac and Lexus to impact the sales champion position of the second tier luxury brand.

At the same time, previously located in the second camp, JLR did not release the specific sales figures in China's automobile market in 2020. However, combined with the market performance of JLR in 2020, the industry expects that there will still be great pressure to maintain the sales volume of 100000 vehicles in 2020.

In 2020, the annual sales volume of Porsche also reached 89000, an increase of 3% compared with the same period of the previous year. At the same time, China is also the only market to achieve growth among the three major markets.

"Among the second-line luxury brands, Lexus and Porsche have the best performance and the most stable price. It is very rare that the profit of new cars can guarantee at least five points. As a new brand, Lincoln has got the second-line luxury tickets, and the terminal price is also very strong, second only to Lexus and Porsche." A dealer investor with several luxury brands told reporters.

Although the second-line luxury brands are undergoing reshuffle, it is undeniable that China's luxury car market is ushering in the biggest change in the past 30 years. In addition to Mercedes Benz, BMW and Audi seizing more than 80% of the luxury car market share, a new force including Lincoln, Weilai and Tesla has emerged.

With Lincoln's localization in China, sales volume also ushered in a rapid growth. At the same time, with the domestic production of adventurer and Aviator models, Lincoln's sales volume in China has reached 61700 in 2020, a substantial increase of 32% year-on-year.

The significance of Lincoln's successful breakthrough is that it proves the possibility of a traditional luxury car brand in the Chinese market. At a time when the luxury car market is constantly impacted by electrification, intellectualization and new forces' car making, is there any chance for a new domestic traditional luxury car brand? Lincoln gave the answer.

"Our dealers and investors are very confident that Lincoln can enter the top five of China's luxury cars in the future." The Lincoln dealer further said.