The year 2024 will be a Dafengshou (Salad of assorted fresh vegetables) year for the sales volume of independent automobile enterprises. According to data from the Passenger Car Market Information Joint Branch of the China Automobile Dealers Association, from January to November 2024, the sales volume of domestic brand cars reached 12.2066 million units, a year-on-year increase of 21.9%, and the market share reached 60.3%, an increase of 8.4 percentage points compared to the whole year of 2023.
But many domestic car companies are not living comfortably. The reason behind this is that in an increasingly competitive market, including domestic automakers, various car companies are generally caught in a quagmire of price wars, resulting in increased sales but pressure on profits.
Nowadays, the transformation of China's automotive industry towards electrification and intelligence has entered the second half. After the penetration rate of new energy exceeded 50%, there has been a tug of war between independent car companies and joint venture car companies based on fuel vehicles. Independent car companies have also begun to compete for survival space.
For any independent car company, staying on the table is more important than anything else until the new market landscape is completely stable. In this situation, from price positioning, enterprise management to market development, independent car companies have begun to stage the drama of "the inside is more important than the face".
The curtain of brand integration opens
A few years ago, the outbreak of the new energy vehicle market prompted domestic car companies to embrace the concept of "having more children is easier to fight" and embark on the path of multi brand development.
In 2019, Geely launched the Geometry brand, BAIC launched the Jihu brand, and Changan launched the Qiyuan brand. In 2020, GAC established the Aion brand, and SAIC launched the R-standard product series (later became the independent brand Feifan Automobile). After 2021, a large number of new brands such as Geely Jike, Geely Ruilan, SAIC Zhiji, Changan Shenlan, GAC Haobo, Dongfeng Yipai, and Dongfeng Nano have been born one after another.
Entering 2024, faced with intensified market homogenization competition and high business pressure, independent car companies are gradually shrinking their fronts, and many new brands that were born before are being integrated.
In September, Geely Holding Group issued the "Taizhou Declaration", proposing to "firmly promote the deep integration and efficient integration of internal resources, further clarify the positioning of various brands, streamline equity relationships, reduce conflicts of interest and duplicate investments, and improve resource utilization efficiency". Afterwards, Geely Automobile announced the merger of the Geometry brand into Geely Galaxy, and Jike Automobile and Lynk&Co were also integrated.
At the 2024 Chengdu Auto Show in September, SAIC Motor announced the integration of Roewe and Feifan's marketing systems. In late October, Feifan Motors, which had been independent for three years, officially returned to SAIC Roewe as an independent brand.
In October, the Euler Automotive App also announced that it will officially cease operations and migrate to the Great Wall Motors App by the end of this year. Regarding this, Euler Motors stated that this move is equivalent to merging five brands under Great Wall Motors, including Haval, Tank, and Euler. There are also reports that the Euler brand may be integrated into the Haval brand in the future.
Most of the brands integrated by domestic car companies in this round are those with limited sales volume and market influence. According to the data, the sales volume of Feifan Automobile in 2023 is 21000 units; Geometry Auto's sales in 2022 will be 150000 units, and in 2023 it will be 191000 units; Euler Motors' sales from January to November 2024 were 58500 units, a year-on-year decrease of 40.57%.
The frenzy of soaring has cooled down somewhat
The emergence of new brands in the past few years also reflected the enthusiasm of independent car companies to strive for excellence. At that time, the luxury car market worth 300000 yuan or even 400000 yuan became a common pursuit for new brands of independent car companies. But since 2024, the mass market of around 200000 yuan or even more has become a new main direction for new brands of independent car companies.
In April 2022, SAIC Zhiji's first model, Zhiji L7, entered the luxury car market worth over 400000 yuan. In September 2024, the all-new Zhiji LS6 will be launched, with a price range of 239900 to 302900 yuan. However, after adding various preferential policies, the actual listing equity price is only starting at 216900 yuan.
In September 2022, the first model of Feifan Motors, Feifan R7, was launched, with a subsidized price range of 289900 yuan to 356900 yuan, targeting the dominant Tesla Model Y in this market segment. But more than a year later, the starting prices of the 2024 Feifan R7 and Feifan F7 urban edition are both less than 200000 yuan.
In July 2024, Jike announced the launch of the 2025 Jike X, with a new car price ranging from 200000 to 220000 yuan. In order to attract customers to place orders, Jike X has offered limited time car purchase benefits, including a cash discount of 21000 yuan. This means that purchasing a new Extreme Krypton X within a limited time only costs less than 180000 yuan.
In October 2024, Lantu's fourth high-end pure electric SUV, Lantu Zhiyin, was launched, with a limited edition price of only 179900 yuan. From January to November 2024, Lantu Automobile delivered a total of 73500 vehicles, a year-on-year increase of 81%. However, there is still a significant gap compared to first tier players such as Extreme Krypton and Ideal. Therefore, Lantu Motors needs more lower tier models to increase sales.
The cooling of the frenzy of self owned car companies is partly due to the fierce price competition in the domestic automobile market, and "exchanging price for quantity" has become a more realistic choice; On the other hand, the new energy vehicle market below 200000 yuan shows greater growth potential. For example, Zero Run, which previously quietly cultivated the 100000 to 200000 yuan market, will surpass its competitors in sales in 2024 and successfully become one of the top three new forces in car manufacturing.
The road to the sea blooms on all sides
Although several major domestic car companies are undergoing strategic contraction and accelerating the integration of their brand resources, they are still making great strides in overseas market development. In the fiercely competitive domestic automotive market, going global is becoming a consensus for independent car companies to alleviate internal pressure.
Driven by new energy vehicles, Europe has been one of the main destinations for independent car companies to go global in the past few years. But in October 2024, the European Commission decided to impose a final five-year countervailing duty on Chinese imports of electric vehicles, which poses a great challenge to the export of Chinese new energy vehicles to Europe.
Since 2024, several Chinese car companies have announced plans to build factories in Europe, among which BYD has confirmed the establishment of two car factories in Europe, and car companies such as Leapmotor, SAIC, Changan, and Dongfeng have also sent signals to build factories in Europe.
In addition to Europe, Southeast Asia is also one of the key markets for independent car companies to go global. Recently, the 41st Thailand International Auto Show was held in Bangkok. The Thailand International Auto Show is regarded as a barometer of the Southeast Asian automotive market, attracting 42 car brands and 22 motorcycle brands from 9 countries around the world, with nearly half of them being Chinese car companies.
At the Thailand Auto Show, BYD unveiled its new electric SUV model SEALION 7, and Geely's new energy electric pickup truck brand Radar participated for the first time. In addition, Chinese brands such as Leapmotor and OMODA, a subsidiary of Chery Automobile, also made their debut in the Thai market.
Not only Thailand, but also other Southeast Asian countries such as Malaysia and Indonesia have seen more presence of Chinese car companies. In May 2024, Indonesian electric vehicle manufacturer PTNETA Auto conducted preliminary assembly of Nezha's latest model, NETA V-II, in CKD format. In June 2024, Chery Automobile established the Chery Enterprise Malaysia factory, which will be the first factory in the ASEAN region to produce the high-end off-road vehicle JAECOO J7.
Even Africa, with its limited market size, has not been overlooked by Chinese car companies. At present, Chinese car companies such as BYD, BAIC, and Dongfeng have entered markets such as Egypt, Morocco, Kenya, Rwanda, and South Africa.
Huachuang Securities believes that there is uncertainty in China's exports to the European and American markets by 2025, but it is expected that there is still significant room for growth in exports to regions such as Central and South America. In 2025, China's exports to the Russian market will generally remain stable, while parts of Central and East Africa, Southeast Asia, Australia and New Zealand, South America, and Europe will each contribute an increase of 100000 to 150000 vehicles. It is expected that China's total automobile exports will reach 5.58 million vehicles by 2025.
