AutoBeta(AutoBeta.net)07/20 Report--

In the fiercely competitive Chinese market environment, brand differentiation is becoming more and more intense. Some joint-venture brands rely on terminal price reduction and preferential treatment to support themselves, and even compete with independent brands at the expense of self-reduction. In the long run, it has great impact on brands, which is not conducive to benign development. SAIC GM, a joint-venture car company, reached an annual sales of 2 million cars through expansion routes a few years ago, but now it is on the road of "price for volume".

SAIC GM owns Buick, Chevrolet and Cadillac brands, among which Chevrolet brand market positioning is relatively low, and its sales volume proportion is relatively low. Some netizens reflect that the current car market price is attractive, in Chevrolet exhibition hall looked at, hit 6.5% off and 30% off sales slogan models everywhere.

For example, Chevrolet Cruze, whose official guidance price is 899 - 122,900 yuan, is sold by dealers at a discount of 6.5%, which means that the price range of the terminal naked car of this car may go to 58,000 - 79,900 yuan, almost in the same competitive price range as the self-owned brand model at the same level.

Chevrolet Chuangku SUV is sold at a 30% discount. The official guidance price of the car is 999 - 139,900 yuan, and the terminal naked price may be 699 - 97,900 yuan.

Some netizens said that we can see that the brand market pricing is falsely high. On the other hand, it also reflects the serious decline of Chevrolet brand power and the decline of product competitiveness, which leads to the forced price reduction of products. The personage inside course of study analysis thinks, large-amount price reduction competition is the helpless move of automobile enterprise compromise to the market, the impact on brand will be very big.

In fact, Chevrolet and even SAIC GM's other main brand Buick, is accompanied by the large-scale application of three-cylinder engines and led to a gradual decline in sales. In 2017 and 2018, SAIC GM reached an annual sales of 2 million vehicles, and then began to enter a continuous decline phase. During this period, Chevrolet and Buick brand main vehicles were almost replaced with three-cylinder engines, including Kovoz, Koruze, Yinglang, Weilang, Chuangku, Oncora and other models. As consumers generally did not like three-cylinder engines, SAIC GM further adopted the solution of terminal price reduction and volume change.

The move proved unpopular with markets and consumers and led to a decline in sales, at the expense of GM's three-cylinder engine move, which was "too fast, too aggressive and lacked careful planning."

Data show that SAIC GM's cumulative sales volume in 2019 was 1.6 million vehicles, down 18.78% year-on-year, among which Chevrolet brand sales volume in 2019 was 413,500 vehicles, down 24.8% year-on-year. Entering 2020, GM sales in China fell further, with Chevrolet brand sales falling to 128,900 units in the first half of the year.

For this reason, SAIC GM restarted the sales strategy of four-cylinder engine, and Coruze and Yinglang have launched a version of 1.5L naturally aspirated engine, which is regarded as an important measure for the enterprise to save the market. However, from the overall effect, SAIC GM's price system has been greatly frustrated, brand reputation damaged, it is difficult to ease in a short time.

The Chevrolet brand's current market position is the most obvious way to verify the polarization of the automobile market. There have been car company executives analysis,"second-tier joint venture brands in the past ten years in the Chinese market achievements, and the company's own technical strength, model strategy and marketing are closely related, but the most fundamental driving force is the explosive growth of the Chinese market brought about by the market dividend, but with the market ebb, independent brand upward offensive obvious, these brands in product strategy, market decision-making and marketing shortcomings gradually exposed, finally showing a continuous decline.”

"Price for volume" is almost the last bottom line for brands to survive in the market. The adverse impact of price "collapse" effect on brands will continue, and the subsequent development will become more difficult. If there is no new product to save performance, the future brand may be struggling on the edge of life and death. Under the market environment of stock competition, the brands that lose market share will face the test of life and death.

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