China Auto News: Small and micro electric vehicles regain vitality
2024-08-11
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In the first half of the year, amid the upsurge of many new car launches and the clamor of price wars, the small and micro electric vehicle (A00-class) market, which was gradually forgotten by people, is quietly regaining vitality. According to relevant statistics, the retail sales of small and micro electric vehicles reached 440,000 units in the first half of the year, a year-on-year increase of 35%, which is second only to the 54% of large SUVs among all types of models. It can be said that small and micro electric vehicles are quietly accumulating strength in a low-key and steady way.
Looking back over the past few years, the small and micro electric vehicle market has experienced a magnificent ups and downs. From the rapid growth in the past, to the rapid decline later, to the strong recovery, to the continuous decline, and finally to the steady recovery today. Along the way, the market has been so volatile that it can be described as ups and downs. So, what are the differences between today's small and micro electric vehicle market and before? What are the deep-seated reasons behind its recovery?
01
Small and micro electric vehicles are still in urgent need
Relevant data show that in 2023, the cumulative retail sales of the small and micro electric vehicle market was 950,000 units, a decrease of 12% compared with the previous year and a decrease of 130,000 units from the sales of 1.08 million units in 2022. This year is generally regarded by the industry as the turning point from prosperity to decline of the small and micro electric vehicle market, especially in the first half of 2023, its cumulative retail sales were only 300,000 units, a sharp drop of 42.1% year-on-year.
However, in the first half of this year, the small and micro electric vehicle market staged a beautiful counterattack, turning from a previous year-on-year decline of 42.1% to a year-on-year growth of 35%, achieving a rebound. Why did the seemingly declining small and micro electric vehicle market usher in such a turnaround? The answer is actually not complicated, that is, small and micro electric vehicles are still a rigid demand in the market.
"Micro electric vehicles have completely replaced traditional micro fuel vehicles, and their market penetration rate has reached 100%." The relevant person in charge of a new energy vehicle dealer said in an interview with a reporter from China Auto News, "Although micro electric vehicles are no longer the leader in the market segment in terms of overall sales, they still have considerable market potential."
At a new energy vehicle sales outlet in Zhuozhou, Hebei, the sales manager also introduced the local new energy vehicle market to the reporter of China Automotive News: "From our sales in the first half of this year, the market performance of micro electric vehicles is better than that in the first half of last year, and we can sell more than a dozen every month." It is understood that although there are high, medium and low-end products on the local market, a considerable number of consumers still choose micro electric vehicles. This type of vehicle is affordable, with a price of 30,000 to 50,000 yuan, and the cost of daily use is low, economical and practical, so it is deeply loved by local consumers.
"I am driving a Changan Lumin now, just for the sake of cheapness. Charging it costs less than 100 yuan a month. If you take into account the annual insurance premiums and daily maintenance expenses, the average monthly expenditure is no more than 400 yuan, which is much cheaper than traditional fuel vehicles." A new energy vehicle owner who lives in a county in Hebei told a reporter from China Automobile News.
Regarding the market prospects of small and micro electric vehicles, an industry expert said: "The market for small and micro electric vehicles will not disappear, but may stabilize." He further analyzed that, looking at the European, American, Japanese and Korean markets, even in countries with a high per capita ownership of motor vehicles, mini cars still have a large market. For example, in the old city areas of European cities, mini cars are called "street shortstops"; in Japan and South Korea, mini cars are called "housewife shopping carts." In China, buying a stylish mini electric car is both fashionable and convenient, and is very suitable for use as a means of transportation.
02
There are still large car companies entering the market
After rolling off the production line on May 17, FAW Bestune's first new energy vehicle, the "Bestune Pony", was launched on May 28. The new car has three versions, namely the Cute Pony, the Vitality Pony and the Vitality Pony, with prices ranging from 26,900 to 31,900 yuan. It is worth mentioning that except for the Vitality Pony version, which is 3,000 yuan lower than the previous pre-sale price, the prices of the other two versions are also 2,000 yuan lower than the pre-sale price.
As a pioneer product of FAW Bestune's new energy transformation, Bestune Xiaoma is clearly positioned as a micro pure electric vehicle. It adopts a three-door, four-seat layout and provides 6 exterior colors and 5 interior colors for consumers to choose from. At the same time, the new car also provides two driving range versions of 122km and 170km to meet the needs of different consumers.
The main feature of the Pentium Pony is its trendy and fun personality, especially focusing on the needs of young families and female users. In order to be closer to the preferences of users, the Pentium Pony provides more than 100 personalized customization options. In the future, FAW Bestune will also launch an official personalized customization platform to bring users a lower-cost and higher-quality customization experience with original factory quality.
Relevant data shows that only two months after its launch, the order volume of the Pentium Pony exceeded 20,000 units, and it ushered in its first upgrade after its launch. This upgrade brought a large-screen entertainment system, which brought users a new audio-visual experience. Yan Peng, the product manager of the Pentium Pony, said: "Currently, there are more than 10,000 users waiting for delivery. We will accelerate the increase in the capacity of the new production line and deliver more Pentium Pony to users as soon as possible."
So why did FAW Bestune choose to enter the micro electric vehicle market? In fact, this is because it saw the huge opportunities in this market segment. Despite fierce market competition, small and micro electric vehicles are still a rigid demand in the market, and personalized needs have yet to be met. Therefore, at the beginning of the design, Bestune Pony clearly targeted the target user group: young users aged 20 to 35, especially young women and young mothers. At the same time, this pure electric car also has the "five good" label: good-looking, fun, easy to drive, economical, and safe.
The Pentium Pony incorporates the "five good" concept into every detail of its product design. The characteristics of "good-looking, fun, and easy to drive" are self-evident. Its dopamine color scheme is cute and lovely, and the capsule element design is inspired by the capsule car in "Dragon Ball", which makes people realize their childhood dreams. At the same time, the Pentium Pony has not fallen behind the current popular trend modification scheme, which will meet the diverse needs of users. In addition, the integrated layout of the windshield washer fluid filling port and the charging port allows female users to operate easily without opening the heavy engine cover. The main and co-pilot seats are designed in a 6:4 ratio to maximize the comfort of the main driver's seat.
As for the subsequent market performance of Pentium Pony, industry insiders believe that it remains to be seen. However, at least it will have a certain market share. Because Pentium Pony has the endorsement of a large manufacturer, and its products are cost-effective, it will at least not sell too badly.
03
Market share is basically locked
Judging from the current market share composition of small and micro electric vehicles, earth-shaking changes have taken place. Once upon a time, Wuling Hongguang MINIEV became a phenomenal hit product with its unique market positioning and product advantages. Since its launch in July 2020, Wuling Hongguang MINIEV has sold more than 1.1 million units in less than three years, and has topped the sales list of Chinese brand pure electric vehicles for 28 consecutive months, with the highest monthly sales reaching 50,600 units. In 2022, Wuling Hongguang MINIEV sold a total of 554,000 units, contributing nearly one-third of SAIC-GM-Wuling's sales, and can be called a generation of "national god car."
However, as time goes by, the market competition pattern is also quietly changing. In the first half of this year, although Wuling Hongguang MINIEV's sales still ranked first, with more than 83,000 units sold, it no longer has the leading position it once had. Instead, it has been replaced by a series of strong competitors.
Changan Lumin ranked second with sales of over 60,000 units, followed closely by Geely Panda with sales of over 49,000 units, Leapmotor T03 was not to be outdone with sales of over 22,000 units, Chery QQ Ice Cream and Chery Little Ant also achieved good results of 16,000 units and 9,000 units respectively. In addition, Renault Jiangling's Xiaoqilin, Lingbao BOX, Pentium Pony and Kaiyi Shiyue also occupied a place in the market.
Judging from the top ten sales of single models of micro electric vehicles, the main force is obviously the first-tier big-name automobile companies. It is worth noting that only Jiangsu Jimai New Energy Vehicle Co., Ltd., which produces Lingbao BOX, is a car company that started with micro electric vehicles. This company, located in Xuzhou Industrial Park, Jiangsu Province, was established in 2018 and obtained automobile production qualifications in April 2019, and has the legal qualifications to produce and sell automobiles. Its first product, Lingbao BOX, rolled off the production line in April 2020 and quickly achieved impressive results in the market.
In the view of industry insiders, the advantages of large automobile companies in making small and micro electric vehicles are very obvious. First, they have strong brand influence and market layout capabilities, which can better meet consumers' pursuit of brand and quality. Secondly, these companies have a deep accumulation of car manufacturing technologies such as chassis, drive, and control, which can provide strong support for the development of micro electric vehicles. In addition, large automobile companies usually have strong financial strength, which provides a solid financial foundation for the research and development and production of micro electric vehicles. Finally, they can also further expand their market influence and enhance the market competitiveness of their products through strategic layout and cooperation.
04
There are still dark horses that have not yet made their move
In the small and micro electric vehicle market, Zhidou Automobile was once regarded as one of the pioneers and created a brief glory. In 2017, with the annual cumulative sales of more than 40,000 Zhidou D2 vehicles, Zhidou occupied 7.64% of the market share in this market segment, ranking fourth in sales of new energy passenger vehicles, leaving many mainstream car companies behind. The head of Zhidou once confidently stated that Zhidou's break-even point should be 50,000 to 60,000 vehicles, and predicted that in 2018, it would end 12 consecutive years of losses and enter a new stage of development. At that time, Zhidou Automobile's cumulative sales had exceeded 100,000 vehicles, occupying 1/5 of the micro electric vehicle market.
However, there are hidden worries behind the prosperity. The adjustment of the subsidy policy for new energy vehicles caught micro electric vehicle companies represented by Zhidou off guard. In 2018, the Ministry of Finance implemented a new subsidy policy for new energy vehicles. Pure electric vehicles with a range of less than 150km will no longer enjoy subsidies. At the same time, the requirements for battery energy consumption and energy density have also been raised. This has put Zhidou D1 and D2 in trouble because they cannot get subsidies. Only the newly launched D3, which has a range of 315km, can barely get a subsidy of 45,000 yuan.
In addition to the changes in subsidy policies, the competitive products launched by mainstream car companies have also begun to erode Zhidou's market, causing its market space to be continuously compressed. For Zhidou, which is positioned as a micro electric vehicle, this is undoubtedly a fatal blow. A local electric vehicle dealer recalled: "In 2015, my store also sold Zhidou. At that time, there were no competitive products on the market. Zhidou was cheap and sold well. But later, other competitive products entered the market and were better than Zhidou. On the one hand, Zhidou did not have a five-door, four-seat model, which could not meet market demand; on the other hand, Zhidou electric vehicles had a short driving range, slow charging, and uncompetitive product performance. So, we stopped selling Zhidou later."
Facing the ever-changing market, Zhidou was caught off guard. This was ultimately reflected in sales. In 2018, Zhidou's annual cumulative sales were only 15,000 vehicles, a year-on-year drop of 63.90%, far from the previously set target of 80,000 vehicles. By January 2019, Zhidou's sales were even more embarrassingly zero.
It is indeed a pity that Zhidou did not wait for the arrival of the spring of small and micro electric vehicles. However, in October 2023, Geely Auto Group, Zhang Jian, founder of Emma Technology, Bao Wenguang, founder of Zhidou Auto, Jinshajiang United Venture Capital, Three Gorges Capital, Shenzhen Yuanzhifuhai and others worked together to renew Zhidou Auto. In its latest official announcement, Zhidou Auto stated that its original intention remains unchanged and it will continue to focus on the travel market, build an industry-leading micro-travel platform, and provide users with small and beautiful travel solutions. On April 18, the renewed Zhidou Auto officially launched its first model-Zhidou Rainbow. The car has been declared, with a length, width and height of 3224mm, 1515mm and 1630mm respectively, and a wheelbase of 2100mm. It is positioned as a two-door four-seater micro electric car. The new car is equipped with a 20kW motor and uses lithium iron phosphate batteries from Hefei Guoxuan High-tech Power Energy Co., Ltd.
The potential of the returning Zhidou cannot be underestimated, and it may play the role of a dark horse in the small and micro electric vehicle market.
05
Differentiation is the key to winning the market
The rebound of the small and micro electric vehicle market is undoubtedly good news, and the continuous influx of new players has also brought new vitality to the market. However, facing the limited market space, how to gain a foothold in this market segment has become a key issue facing many automakers.
The differentiation of automobile products is the key to achieving market competitive advantages. This can be achieved through technological innovation, brand building, market research, design style, and service experience. Technological innovation is the basis for the automotive industry to achieve product innovation and differentiated competition. Enterprises need to continuously develop new technologies and functions, such as advanced collision safety technology and intelligent driving systems, to improve the competitiveness of their products. At the same time, cooperation with suppliers and scientific research institutions, hiring first-class technical talents, and actively participating in technical exchanges and academic conferences are also important ways to achieve technological innovation.
Brand building is also an important means for the automotive industry to achieve differentiated competition. Through unique product design, marketing strategy and brand image, consumers can be recognized for quality and value, thus standing out in the market competition. This requires continuous efforts and investment by enterprises, constant attention to market changes and consumer needs, and timely adjustment of brand strategies and positioning.
Market research is the key to understanding the target market and consumer needs. By deeply understanding user needs, companies can find differentiation factors and innovation points, formulate product planning and development plans, and adjust and optimize product design and technical solutions based on market feedback.
Design style is also an important aspect of brand differentiation. A unique design style can distinguish a product from other competitors in the market and attract consumers' attention. Some car brands focus on creative and avant-garde designs, shaping their products into iconic works of art, thus winning the favor of consumers.
Service experience is also an important strategy to gain competitive advantage. Establishing a complete after-sales service system, providing high-quality after-sales guarantees, and personalized and customized services can improve consumers' brand loyalty and further consolidate market position.
For small and micro electric vehicles, it is absolutely necessary to take the boutique route. Because low price does not mean low quality, and a small car cannot cheat customers. In terms of design, small and micro electric vehicles need to focus on appearance design, integrate elements such as fashion, toughness and recognition, and provide colorful body colors to meet the personalized needs of different consumers. In terms of configuration, environmentally friendly materials can be used, and leather seats, reversing radar, speaker audio, mobile phone interconnection functions and other configurations can be provided to create a simple but high-end interior design. Through detail processing, such as the horizontal through-type center console layout, dual screens, knob-type shifting mechanism, etc., the texture and sense of technology of the interior can be enhanced. In terms of space utilization, micro electric vehicles can also improve space utilization through optimized design to provide consumers with a more comfortable and convenient travel experience.
The development of the small and micro electric vehicle market is affected by many factors, including market demand, technological innovation, and policy support. From the perspective of market demand, small and micro electric vehicles have a wide range of application scenarios in short-distance travel, daily commuting, picking up children, etc., meeting consumers' needs for short-distance travel tools. In addition, as battery costs fall, the cost sensitivity of micro electric vehicles decreases, making them affordable for more consumers, further expanding market demand.
Whether the small and micro electric vehicle market can continue to develop steadily and whether there are still disruptors is still unknown. But what is certain is that there is obviously market space for car companies. How to seize and occupy a place requires car companies to work hard.
