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Baoneng will push a new high-end brand or turn to electrification

Publish Date: 2020.09.05

    Three years after entering the subjective Qoros Auto, Baoneng officially stated that it will build a brand new brand that is positioned higher than Qoros.

    On September 3, at the "Baoneng Group-CCTV Strategic Cooperation Conference and Brand Power Project TOP Brand Signing Ceremony", Toshiaki Otani, executive vice president of Baoneng Automobile Group, revealed that the group is planning to establish a high-end automobile brand , Positioning will be higher than Qoros Auto.


Baoneng Qoros Factory

    He also said that Baoneng Automobile Group has built an ecosystem covering the “full industry chain” of automobiles, including core business sectors such as forward-looking technology research and development, power batteries, and three-electric systems. This may mean that high-end brands are under planning. , May be a brand with electrification as a selling point.

    An industry insider believes that after Qoros’ high-end road has suffered setbacks, starting from electrification to build a high-end brand, for Baoneng, it may not be a good choice for Baoneng to re-layout its product line from high to low and reverse the decline in sales. , And there are precedents to follow. For example, Tesla or NIO have achieved high-end brands through the electrification technology route.

    However, some people in the industry said that the prospects of creating a brand with a higher positioning when the Qoros brand has failed to get out of the trough are still difficult to say.

Baoneng launches brand "upgrade"

    After controlling Qoros in 2017, Qoros sold 15,381 units that year. In 2019, the annual sales volume of Qoros reached 22,700; in the first half of 2020, due to the impact of the epidemic, the sales of Qoros were only 2,873.

    According to statistics from the Travel Federation, in the first half of 2020, the sales of Qoros 5 accounted for 90% of the total sales of Qoros 5, and Qoros 3 was almost forgotten. The Qoros 7 released in July this year is the first time Qoros has released a new car in 5 years. During this period, the previous concept cars Model Young and Mill2 have not been mass-produced and rolled off the assembly line.

    At the same time, Lynk & Co's sales in the first half of this year reached 55,000, and the annual sales since 2017 were 6,000, 120,400 and 128,100 respectively. The WEY brand of Great Wall Motors sold 26,600 vehicles in half a year. The sales in the past three years were 86,400, 121,000 and 100,000.

    From the perspective of sales comparison, it is difficult for Qoros to copy the development path of high-end brands of Geely Lynk & Co and Great Wall WEY, so it is the best choice to start anew.

    In addition, there are signs that electrification is expected to become the entry point for Baoneng's second entry into the high-end automobile market.

    Since its shareholding in Qoros, Baoneng has been building the entire automotive industry chain, of which power batteries are an important part. In November 2018, Baoneng established Hongpeng New Energy. Its main business includes the development, manufacturing and service of high-end lithium batteries and battery systems, covering the fields of lithium batteries from materials, cells, systems, intelligent manufacturing and battery recycling. In the following month, Baoneng established the Automotive Innovation Research Institute to develop key technologies such as new energy vehicles, three-electric systems, auto parts, and intelligent networking, which provided the technical foundation for Baoneng to build a high-end brand from the perspective of electrification.

    It is worth mentioning that there is also the demonstration effect-Tesla, Weilai, etc. have opened the high-end market gap that has been controlled by traditional car companies through the electrification route, which also provides Baoneng to enter the high-end brand track Template.

Baoneng, "not bad for money"

    Li Bin, the founder of Weilai Automobile, once sighed after entering the car industry, "Don't build cars without 20 billion." This shows that car-making is a capital-intensive industry that requires continuous large amounts of capital investment, and Baoneng just meets this condition.

    Baoneng Group, established in 2000, has businesses in real estate, finance, logistics, energy, medical care, agriculture and other fields. On the eve of the huge investment in controlling Qoros Auto, Baoneng's net assets were as high as 120 billion yuan and the market value exceeded 500 billion yuan. Whether it was industrial chain coordination or direct capital blood transfusion, it was not a problem.

    With capital blessing, Baoneng does not start from scratch to build a high-end brand.

    Qoros Auto itself is a car company featuring "positive development", and it has exhibited electrified models including Model Young at major occasions such as auto shows. This means that Qoros Auto has already achieved considerable electrification. Technology accumulation.

    At the end of 2019, Baoneng formally confirmed the acquisition of PSA's joint venture CAPSA in China (Changan PSA Peugeot Citroen), together with the previously acquired CAPSA equity from Changan Automobile, thus fully owning this modernization tailor-made for the French luxury brand DS Factory, so Baoneng does not lack the manufacturing experience to build high-end brands.

    Unpredictable prospects for high-end brands

    Although Baoneng has the industrial chain, technology, production and many other aspects of the layout, and completed almost all the prerequisites for building a high-end brand, some industry professionals believe that high-end brands are not achieved overnight, and Baoneng still faces considerable risks, especially It is a market risk. "The Matthew effect of new energy vehicles is taking shape. Tesla and Weilai have respectively controlled the commanding heights of foreign and domestic electrification brands. Baoneng, as a latecomer, faces a disadvantage in brand recognition."

    Automotive industry analyst Zhang Xiang also said that Qoros was originally a relatively high-end brand, but its operation in the Chinese market was not very successful. In the case of not very good sales volume, it has to build another high-end brand. Brand trust is a problem. .

    Ren Wanfu, another veteran in the automotive industry, believes that Baoneng’s establishment of a high-end car brand is not unexpected. On the one hand, it is in line with Baoneng’s high-profile and high-profile style since entering the automotive field; on the other hand, WEY, Lynk&Co, and NIO Independent high-end brands such as, Ideal have achieved initial success in the market, and have also attracted more brands to work hard. But he also emphasized that Baoneng has acquired Qoros for more than two years, and Qoros has not reversed its backwardness, and it is hard to say whether it will succeed or fail when it promotes high-end brands.

    Judging from the position of the senior management of Baoneng, the determination to build a high-end brand has been determined.

    At the strategy conference on September 3, in addition to Otani Toshiming's statement that he would build a high-end brand, Chen Lin, executive vice president of Baoneng Group, also emphasized the importance of the automotive business sector, saying that in the group strategy, the automotive sector is the future of Baoneng An important engine for development strategy.

    Earlier at the Qoros 7 press conference on August 27, Baoneng stated that among the three strategies of “Making Baoneng, Technology Baoneng, and People’s Livelihood Baoneng”, “Making Baoneng” ranked first. The automobile industry is the first core industry of the "Manufacturing Baoneng" strategy.


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