China’s EV Maker Stakes is a small $ 4,500 car for its future

China’s EV Maker Stakes is a small $ 4,500 car for its future

Since last July, the unknown carmaker in southwest China has been the world’s largest electric car market, with larger players and Tesla Inc. the company outsources it almost every month with an empty bone worth 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.

(Read also | Low-cost low-cost EV that challenges Tesla)

In the city of Liuzhou, known for its limestone mountains and river snail soups, the company – which has sold about 270,000 cars in nine months, making it the best-selling EV in China – has bigger 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 auto manufacturers in 2020.

The goal is to lift 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 that sells his micro-vans: the knights of the sliding doors of the century earned the nickname “bread box” in Mandarin, and in 2017 it became the best-selling passenger vehicle in China. the country’s roads, contractors and distributors use it equally.

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 brand and marketing manager, Zhang Yiqin, said in an interview. “We keep a tight tab on users. Barriers to taking electric cars can only be cleared when they are consumed by consumers. 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. At 35, he jokes that he is the oldest head of state in the 27-year-old group. Slogans like ‘Young and Eager’ are sprinkled on the headquarters of Wuling in Liuzhou, a city that collects cars next to the company, with 30% of all cars. 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 the customer was asked to add more tones when he saw that the company was bringing 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 car’s key outlets – not only at the lowest price: Hongguang Mini drivers are able to customize their vehicles in a way that is not possible elsewhere.

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 (no relationship) 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 called The Catbus, a smiling feline with leather-covered seats.

Resembling its Hongguang Mini peak, it has spent about 15,000 yuan ($ 2,300) to cover the interior of the car with velvet-brown color and the roof that shines at night.

“A lot 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.

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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.

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 SAIC in Shanghai, 44% of GM units in China and 5.9% in Guangxi Automobiles. Last year it sold a total of 1.6 million vehicles. While the Pandemic fell by about 4% compared to 2019, sales of new energy vehicles in Wuling nearly tripled to 174,000 units.

(Read also | Tesla shares fall again, sales fall further in China)

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, up from $ 4.3 billion in the first three months of 2020. GM, which has other partnerships in China, does not break Wuling’s revenue into 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 get cheap cars out, thanks in part to good supply chain management, equipped with popular 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.

The global shortage of semiconductors is also weighing on 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’s production is expected to fall by about 15% in May.

Wuling’s tough sales target for 2022 is the basis for maintaining a market-leading boost. After the debut of a Hongguang Mini convertible at the Shanghai Auto Show in April, it aims to release a mid-cycle improvement to the vehicle this year and is working on a two-seater EV aimed at younger men, Zhang said.

At a Wuling dealership in downtown Liuzhou, user experience manager Li Zhengguang says there is a group of four people focused solely on new media. They communicate with customers who want to use Douyin, as TikTok is popular in China, and Little Red Book, a social platform for Trusted shopping, 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 makes up the brand, 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. .

This story has been published without text changes from a wireless agency feed.

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