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Just three days past February, FAW Red Flag, Lexus, Cadillac, Volvo and Lincoln have all released the latest sales figures, indirectly reflecting the good performance of luxury brands in January. Judging from the latest sales ranking, although the sales of all brands have increased in the first month of the year, the ranking has been greatly adjusted.

Overall, FAW Red Flag monthly sales reached 32500 vehicles, temporarily ahead of Lexus and Cadillac, won the second-tier luxury brand sales. Competition between Lexus and Cadillac is still fierce, and Cadillac sales were overtaken by Lexus again in January, ranking third. In addition, Volvo and Lincoln still ranked fourth and fifth.

On January 31st, FAW Group officially announced the sales of the Red Flag brand. FAW Red Flag sold 32500 vehicles in January 2021, an increase of 158% over the same period last year. This is the first time that the brand has sold more than 30, 000 vehicles. It is understood that FAW Red Flag has an annual sales target of 400000 vehicles in 2021, so the Red Flag brand achieved 8.1 per cent of the target in January.

With the sinking of positioning, the gradual enrichment of products and the continuous development of marketing, the sales volume of Red Flag brand has ushered in high growth. According to officials, in the next 10 years, the products of the Red Flag brand will be expanded to 30, covering more market segments, thus building four major product lines: l (supreme car), S (sedan car), H (mainstream car) and Q (commercial car). It is understood that FAW Hongqi will launch a new pure electric car E-QM5 this year, and the first MPV model is also expected to be unveiled this year.

In the face of the squeeze of FAW Red Flag and Lexus, Cadillac sales have fallen to the third place. Data show that Lexus sold 24269 vehicles in China in January, up 86.4% from a year earlier, while Cadillac was 23200, up 18.4% from a year earlier. Both brands achieved double-digit year-on-year growth, but compared with Lexus's steady growth, you can see that Cadillac is under a lot of pressure.

Since 2019, Cadillac has been pressed by Lexus, and then adopted the "price for volume" market strategy to lead Lexus with a small growth advantage. The cumulative sales of Lexus in 2020 was 225000, compared with 230000 for Cadillac, a gap of only 5000.

Cadillac price reduction can indeed bring sales growth in the short term, in the long run, it will lead to serious brand premium, market price chaos, low second-hand residual value, and a decline in brand loyalty. From the current point of view, the negative impact of Cadillac "price for quantity" has gradually emerged. On the contrary, as the only luxury car brand that has not achieved domestic production, the terminal price of Lexus is relatively strong. Not only do most models have no discount, but there is a price increase. Its monthly sales are basically more than 20,000 vehicles, maintaining a steady growth rate, which is undoubtedly a success.

From the current point of view, if FAW Red Flag can achieve the sales target of 400000 vehicles, then it will be no problem to win the crown of second-tier luxury brands.

Volvo and Lincoln also achieved sales growth. On Feb. 3, Volvo announced sales in China. In January, Volvo sold 19122 vehicles, up 91.4% from a year earlier. Although Volvo's sales also grew by 91.4%, many of its domestic models also adopted the "price for volume" strategy, under the competitive pressure of Cadillac and Lexus, its terminal price is also obviously "out of control."

Lincoln brand sales rose 162% year-on-year to 8200 vehicles in January, although sales were lower than those of the above brands, but the growth rate was indeed the highest. Since the Lincoln brand became domestically made, its sales have continued to climb, rising 32 per cent to 61761 vehicles in 2020 compared with the same period last year. It is understood that the Lincoln brand's third domestic model, Changan Lincoln navigator, will be launched in March, the appearance continues the overseas version design, the interior design is greatly adjusted, and the price is lower than that of imported models.

It can be predicted that due to the impact of the car buying boom before the Spring Festival, the increase in car brand sales in January was expected. Affected by the epidemic in 2020, multi-brand sales were also able to achieve year-on-year growth in the first half of the year. Therefore, more competition is mainly reflected in the second half of the year, and how these brands will perform is also worth looking forward to!

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