AutoBeta(AutoBeta.net)07/24 Report--

Affected by the decline of the domestic automobile market in the past two years and the impact of the COVID-19 epidemic, under the squeeze of domestic car sales, the market share of independent brands has hit a new low. A few days ago, when General Secretary Xi Jinping visited FAW Group, he said that the current environment is organic in danger and organic in danger.

On July 23, General Secretary Xi Jinping, who was on an inspection tour in Jilin Province, came to the Research and Development Institute of FAW Group to learn about the reform and development of state-owned enterprises, and to see and praise the latest vehicle products of independent brands such as "Red Flag." Xi Jinping said: although the current international competition in the automobile manufacturing industry is very fierce, and the trends of informatization and intelligence are constantly developing, this is sometimes organic in danger and organic in danger to us. Therefore, in order to "improve" the famous automobile brands, we must improve the core competitiveness of their own brands.

Affected by the market decline and the novel coronavirus epidemic, passenger car sales in China reached 1.654 million in June, up 2.9 per cent from May, achieving a four-month month-on-month growth, but still down 6.2 per cent from a year earlier.

Despite the recovery of the car market, it is still difficult for independent brands to survive. According to the HKCEC report, sales of mainstream joint venture brands fell 7% in June from a year earlier, up 3% from a month earlier, while the overall pressure on independent brands was greater, with sales falling 16% in June from a year earlier, unchanged from May, and market share falling to 32%, setting a new low in recent years.

By comparison, the annual market share of independent brands in 2016 was 42.6%, and the market share from 2017 to 2019 was 42.7%, 40.1% and 37.9%, respectively, showing a downward trend year by year. In the first half of this year, sales of self-branded passenger cars fell 29% year-on-year to 2.854 million units, and market share fell to 36.3%, a decline that continued to expand from January to May.

Obviously, the market performance of independent brands will be under a lot of pressure in recent years and even in the next few years. However, as the representative of the independent brand, it is also the red flag brand that Secretary Xi Jinping visited this time, but its performance in the first half of this year is extremely outstanding. Data show that FAW Red Flag sales exceeded 15000 vehicles in June, up 92 per cent from a year earlier. From January to June, FAW Hongqi's cumulative sales exceeded 70,000 vehicles, an increase of 111% over the same period last year.

This is another growth of FAW New Red Flag brand since its cumulative sales volume exceeded 100000 in 2019. Although the current annual sales volume of 100000 units is not huge, it is worth noting that in 2020, when the national or global automobile market is in decline, FAW Red Flag can achieve growth against the trend, which is definitely better than the performance of the overall market.

Even from the luxury brand sales data this year, FAW Red Flag has become a number of brands with sales surging against the trend, with cumulative sales second only to Volvo brands and surpassing second-tier luxury brands such as Porsche and Jaguar Land Rover.

Since the rapid and high-quality development of the domestic automobile market, independent car companies seem to have experienced a roller coaster cycle and returned to the trough again. Among the top 10 passenger car sales of independent brands in the first half of the year, only Changan and FAW maintained positive growth, even though mainstream independent brands such as Geely and Great Wall showed a marked decline. the survival of other independent brands such as Zhongtai and Haima is even more worrying. Therefore, in the fierce competitive environment, how to enhance the value and influence of the brand also tests the wisdom of independent car companies.

In this regard, an independent brand executive said: "independent brands can not only be active in the low-end market, must achieve upward, only independent brands seek more market increment, compete with multinational brands, can better survive." It is not difficult to see that the current new Red Flag brand is one of the brands that achieve rapid and healthy development in domestic high-end brands with this high-end marketing model.

On the whole, judging from the performance of the current market environment, whether joint venture brands or independent brands, there are many plans for a huge decline in sales or even delisting, and even some joint venture brands have been surpassed by independent brands. it means that the current demand of the domestic automobile market can not only rely on the word of mouth of the joint venture brand. At present, what consumers pursue more is the quality and quality of cars, so how to improve the core competitiveness of brands is what independent car enterprises need most.

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