Cheap and compact: China’s EV Maker plans to sell a million cars

Cheap and compact: China’s EV Maker plans to sell a million cars

Since last July, an unknown automaker in southwest China has been the world’s largest electric car market, with larger players and Tesla Inc. he sells them almost every month with an empty EV bone for just $ 4,500.

Hongguang Mini is the creation of SAIC-GM-Wuling Automobile Co., a joint venture between SAIC Motor Corp. and Guangxi Automobile Group Co., two state-sponsored manufacturers and US Giant General Motors Co.

Located in the city of Liuzhou, known for its limestone mountains and river snail soups, the company – which has sold 270,000 cars in nine months, making it the best-selling EV in China – has greater plans for the future. . It aims to achieve annual sales of 1.2 million vehicles next year, equivalent to the number of electric vehicles co-produced by Chinese automakers in 2020.

The goal is to raise scholarships, but even before the Hongguang Mini, Wuling had a track record of producing winners in a market that defines a new era for the driver. Founded in 2002, Sino-American Jino built a business selling his minibuses: the knights of the sliding gates of the century earned the nickname “bread box” in Mandarin, and in 2017 it became the best-selling passenger vehicle in China. contractors and distributor drivers alike.

Wuling Hongguang Mini electric vehicles may not be the fastest and may not have the massive Massive per charge but they can operate at compact sizes and cheap prices for these vehicles.

The buyers of these gray gas vans are almost male, which leads Wuling to the Hongguang Mini – which has a top speed of 100 kilometers per hour and has 12-inch wheels – even more extraordinary. Shortly after its launch last July, the automaker realized that the vehicle was gaining traction among young women, with a view that distorts the usual wisdom to know how cars are sold based on this phenomenon.

“The mentality of our company is to produce what people need,” Wuling’s head of branding and marketing, Zhang Yiqin, said in an interview. “We keep a narrow tab for users. It’s a convenient thing.”

To that end, Zhang has formed her own team with employees who understand the Hongguang Mini customer base, which is currently two-thirds female. The 35-year-old jokes that the age group is the oldest state in the 27-year-old group. Slogans such as “Young and Eager” are sprinkled on Liuzhou’s Wuling headquarters, a city that embraces electric vehicles next to the company with 30% of the total car. electricity sales last year, the highest rate in China, according to WAYS Information Technology.

Wuling’s success with the Hongguang Mini was driven almost entirely by an online marketing campaign, according to Zhang. His team often communicates directly with consumers through various social media platforms, and he saw customers asking for more tones as the company brought the latest version of the Hongguang Mini – the Macaron. It has avocado green, lemon yellow and white pink peach, with a contrasting covered roof to mimic the vanilla butter cream of the French meringue of the same name sandwiches.

Also, how they landed at one of the key points of the car – in addition to the lowest price: Hongguang Mini drivers are able to customize their vehicles in a way that is not possible elsewhere.

Hongguang MINI EV is considering creating a buzz in the Chinese market along the lines of Tesla.
Hongguang MINI EV is considering creating a buzz in the Chinese market, in line with Tesla.

Using “stickers” can transform the car’s panels and body. Some wear a Nike swoosh, others have a galaxy-like outdoor space, and still others have Hello Kitty and Doraemon cartoon characters. The original Hongguang Mini has 20 different basic colors. this can be changed, and buyers can also customize the interior.

Zorah Zhang (without contact) is a typical customer. The 23-year-old is a fan of Japanese Hayao Miyazaki, a Japanese animator who directed My Neighbor Totoro, a fantastic film starring a character named The Catbus, a smiling feline with leather-covered seats.

He has shrunk his Hongguang Mini to look like he has spent about 15,000 yuan ($ 2,300) to cover the interior of the car with brown velvet and the roof lights that glow at night.

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

Although a set of wheels is as light as becoming a fashion accessory, there is a real market for it.

Outside of Liuzhou, EV access to China is still around 6% and competition is fierce. Tesla may be the most resonant name, especially in larger cities like Beijing and Shanghai, where its first Gigafactory is located, but local entrances from Nio Inc. to Xpeng Inc., Li Auto Inc. and WM Motor there are newer ones. necks of people.

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

When the opportunities for fossil fuel cars to be added to the mix are overwhelmed by consumers in China, motorists need to give drivers what they want alive, said Jochen Siebert, CEO of JSC Automotive Consulting in Singapore.

“SAIC-GM-Wuling needs to come up with new ideas all the time to attract consumers,” Siebert said. Hongguang Mini “is a kind of accessory, which is a fashion item that can go out of fashion sooner or later.”

For now, it’s a strategy that pays dividends for Wuling. The company owns 50.1% of Shanghai SAIC, 44% of GM China units and 5.9% of Guangxi Automobile. It sold a total of 1.6 million vehicles last year. While the Pandemic fell by about 4% compared to 2019, sales of new energy vehicles in Wuling nearly tripled to 174,000 units.

As for GM, it is doubling its electrification and self-driving with CEO Mary Barra, who has been Hongguang Mini Boon. The automaker had revenue of $ 9.9 billion in the first quarter with China’s auto-joint ventures in the first quarter, more than $ 4.3 billion in the first three months of 2020. GM, which has other partnerships in China, does not break Wuling’s revenue in its economic results.

Although customer engagement has separated Hongguang Mini, cost has been the main driver of successful sales in the country where the price of a Tesla Model 3 stickers is found to be equivalent to $ 39,300. The basic Hongguang Mini starts at $ 4,500, and the new Macaron also sells for $ 6,000.

Wuling has managed to pull out cheap cars thanks in part to good supply chain management, equipped with well-known micro-vans. Many Wuling suppliers also set up manufacturing bases in Liuzhou, which has helped reduce costs. It’s a model repeated by car companies in other cities and provinces across China, flattering to Wuling but also challenging as the price of rival cars drops.

International automakers are also looking at the compact EV space, as Daimler AG has prepared an electric version of the Smart in China, with its own car partner, for many, a small car consumed.

The global shortage of semiconductors is also at Wuling’s weight, with the Hongguang Mini requiring more than 100 chips despite having a basic EV. According to Zang, there has been a shortage in Hongguang Mini production, and Macaron production is expected to fall by about 15% in May.

A major sales target for 2022 is Wuling’s foundation to maintain its market-leading momentum. After the debut of a Hongguang Mini convertible at the Shanghai Auto Show in April, this year it aims to release a mid-cycle improvement to the vehicle and is working on a two-seater EV aimed at younger men.

At the Wuling outlet in central Liuzhou, user experience manager Li Zhengguang says there is a group of four people focused solely on new media. They communicate with customers they want using Douyin, as TikTok is known in China, and Little Red Book, Trusted is a social platform for shopping that is popular with young women, sharing photos and videos. Li, who sold diamond engagement rings, says there is no big difference between jewelry and cars. Create a desire for a fresh product and buyers will come, he says.

Launching the Hongguang Mini is not a cheap car, but it is an excellent accessory in China that takes the brand into account, said Siebert of JSC Automotive.

“Over the last 20 years SAIC-GM-Wuling has become a brand in the market and they will always surprise themselves,” they said. “They’ve done very well because they’re based on the right things. In terms of quality, when they were mostly doing micro-vans, and now in marketing.”

This story was published without text changes from a wireless agency feed. Only the title has changed.

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