China self-developed auto brands press ahead
Last Updated: 2016-11-14 11:02 |
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By Yang Zhongyang

Data released from China Association of Automobile Manufacturers a few days ago indicates that, for the first three quarters of this year, the total sales volume of self-owned brand passenger cars is 7.072 million which increases by 18.7 percent year on year, accounting for 42.2 percent of the total sales volume of passenger cars and the same proportion is 35.7 percent five years ago.

The rise of Chinese automobile brands, according to Korean media, "leaves fewer and fewer places for Korean automobile industry". A senior manager of a French joint-venture brand said that the rise of Chinese self-owned brands has been formed and posed an overall pressure on joint-venture brands, "we are all studying China's self-owned brands".

Under the circumstances of slower increase and fiercer competition in automobile market, what is the reason that self-owned brand automobile is doing better than expected and makes foreign brands under a lot pressure?

Working hard on "true strength" and saying goodbye to copying

On September 20, Geely Emgrand GL was launched to the market in the main venue of the G20 Hangzhou Summit. The president of Geely Auto Group An Conghui said that Geely Emgrand GL was a masterpiece created by Geely to challenge joint-ventures. We believe that Geely Emgrand GL can also make everyone feel the strength and determination of Geely Auto to march toward the world stage while bringing millions and millions users high quality.

On the same day, Chery Tiggo 7 also launched to the market in Beijing China International Exhibition Center. The board chairman of Chery Auto Yin Tongyue said that Chery Tiggo 7 was the first SUV model developed relying on T1X brand-new modularized finished-automobile technology platform, bearing the latest brand image of Chery and representing the highest level of current car manufacturing of Chery. Next year, the model will enter the European market.

Why are the heads of Geely and Chery so confident? Xu Changming, director of the information resource development of the State Information Center, said "The main reason is that Geely and Chery have already formed complete positive research and development ability." In the past, most of the self-owned brands were reverse developed, which made it difficult to guarantee product quality. It is said that T1X is a professional SUV platform created by an international team with no effort spared in compliance with V-shaped positive development process and integrated with the technologies of Jaguar Land Rover and Qoros after Chery entering the strategic 2.0 era.

"Saying good to copying, sticking to positive development and gradually building up process, standards, platforms and systems for research and development are the main reasons why the competitiveness of self-owned brand passenger cars has been tremendously improved in recent years." An Conghui believed that as long as the self-owned brands kept strengthening the system capacity when competing with the best joint-venture brands, they could win upward development space, advance in the market of developed countries and gain a firm foothold.

From January to September of this year, the accumulative sales volume of Changan passenger cars reaches 912 thousand which increases by 21 percent year on year. The total sales volume ranks first in the industry of Chinese brand passenger car. "This is mainly benefited from that Changan always insists on indigenous innovation and positive research and development." The president of China Changan Auto Group Zhang Baolin said at 2016 China Auto Brand Development Forum. Currently, Changan Auto has been established a global research and development system in China, USA, UK, Italy and Japan. Every year Changan Auto invests 5 percent of sales income into research and development. Up to the period of the "12th Five-Year Plan", it has an accumulative investment of RMB 49 billion yuan and a world-leading comprehensive auto test ground and more than 194 advanced laboratories as crash safety, etc. It has established Changan Auto research and development process system and product experimental verification system at the same time. The support of a strong research and development system is exactly what takes to foster a series of star quality models such as CS75, CS35, etc., thus increasing the brand value of Changan Auto.

"For the past few years, self-owned brands kept improving themselves in terms of technology and quality and getting closer and closer to the international brands as far as quality is concerned." According to the vice president and general manager of J.D.Power in China Mei Songlin, this year the gap of average score between Chinese brands and international brands has been narrowed to 14 points which was 101 points in 2011. He said: "With such development trend, Chinese brands will reach the quality level of international brands in 2018."

Focusing on demands and grasp the consumption trend

Sales data of September provided by China Association of Automobile Manufacturers indicates that the self-owned brands have occupied 6 places in the list of top 10 SUV models. Among them, the first and second places are taken by Great Wall Haval H6 and GAC Trumpchi GS4; the self-owned brands occupy 9 places in the list of top 10 MPV. Among them, Wuling Hongguang and Baojun 730 under SGMW sold nearly 100 thousand cars.

"The continuous increase of market shares of self-owned brand cars for the past few years is mainly resulted from that they start from the supply side to adjust product structure focusing on the market segments of both SUV and MPV," said An Qingheng, the director of the advisory committee of China Association of Automobile Manufacturers.

Taking SUV market as an example, the self-owned brands not only have a relative early start to occupy the market, but also have a relative understanding of Chinese customers and can meet basic market demands with high product-to-price ratio; reviewing the joint-venture enterprises, due to slow market response and long decision time, control of research and development process and the procedure needed for introducing car models, they obviously fall behind self-owned brands in terms of rapid product launching capability.

"In September of this year, the Changan passenger car has an accumulative sales volume of 128 thousand, which increases by 49 percent year on year. The main sale is still SUV. Except for old-line CS35 and CS75, CX70 also reaches a monthly sales volume above 10 thousand," said Zhang Baolin.

"Since the price of SUV is about 15 percent higher than sedan at the same level usually, both of the market shares and price of self-owned brand cars have been increasing." Xu Changming believed that this phenomenon would not only help the self-owned brands "move upward", but also sustainable as there was at least 10 percentage points extensible space for the proportion of SUV in the passenger car market in the future.

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