Copyright FOURIN, Inc. 2023
Chinese Automakers Are Facing the Challenge of Differentiating Luxury NEV Brands
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The long-cherished goal of Chinese automakers has been to enter the high-end product market. In the conventional vehicle market, Chinese brands are no match to BMW, Mercedes-Benz, Audi and other high-end global brands. Therefore, Chinese automakers are turning their attention to the NEV market. Since 2019, major Chinese manufacturers have launched a number of high-end NEV brands such as Geely Automobile’s ZEEKR and Dongfeng Motor’s VOYAH. At the Guangzhou Motor Show, held in November 2021, these Chinese luxury NEV brands were exhibited, becoming a hot new topic.
Chinese manufacturers dominate China’s NEV market from small BEVs with a selling price of less than 30,000 CNY to medium-priced BEVs with a selling price of about 200,000 CNY.
In the high-end NEV market, which is said to have a high profit margin, America’s Tesla and NIO, an emerging Chinese manufacturer, have leading share, while the presence of major Chinese automobile manufacturers is still small. For this reason, in addition to the willingness to enter the luxury vehicle segment, there are not many competitors in the high-end NEV market yet, so existing automobile manufacturers are trying to set foot in this newly-forming market.
With the trend toward electrification and smart technology in the automobile market, it is now common practice to introduce connected, driving support and autonomous driving functions to NEVs to increase added value. Recently, new models are developed based on BEV-dedicated platforms and new brands are launched separately from existing marques. The above-mentioned ZEEKR and VOYAH as well as SAIC Motor’s Feifan Auto and Zhiji Motor are some of these newly-created NEV-dedicated brands. It appears that Chinese automakers have gained the capability to carry out product strategies and marketing that are different from existing practices which mainly focus on low- and medium-priced products. In case these newly formed businesses fail, the launch of new brands is aimed to minimize the negative impact on existing brands.