Chengdu Auto Show – “Hot” in 2022

The Chengdu Auto Show in 2022 is full of “hot” excitement.

The Chengdu Auto Show is not the first auto show of the year, and its timing is not particularly suitable. On the one hand, an unprecedented heat wave has swept across most of China for decades, and on the other hand, the power shortage caused by the heat wave (especially the shortage of hydroelectric power caused by drought) has limited the electricity supply in Chengdu.

This power outage has caused almost all air conditioners in Chengdu to exhibit a “weak and powerless” state, which has caused not only one friend in my social circle to encounter power outages while eating hot pot. In any emergency situation in the past, the auto show should perhaps have been postponed to a more appropriate season or environment.

Of course, the auto show can be postponed, at least to find a more suitable season and environment to hold it. But Chengdu has managed to host the auto show. Chengdu people are indeed tough, but the more important reason is that the auto industry needs this important A-level auto show.

The appearance of such an A-level auto show allows almost all manufacturers to release their products that have been squeezed in the first half of the year, allowing consumers’ accumulated desire to buy cars to have an outlet, and more importantly, allowing the entire industry to gather together again.

This accumulation has turned over the past problems of chip, lithium and production capacity shortage, and focused on solving the bigger problems of product, sales, and profit shortage with concentration. This is the reason why the Chengdu Auto Show is so “hot”. This is why even if the air conditioning cannot be turned on, the exhibition hall has to use ice buckets, and everyone has to wear masks, there are still people who passionately work and tirelessly run the show.

Because every drop of sweat shed represents the happiness of having work to do and cars to sell.

Whether there is electricity or not, luxury cars still have to increase sales volume

The problem caused by power constraints has made many ordinary people, including myself, first think of the real crisis that the seemingly irreversible trend of electrification may encounter – what if there is not enough electricity to run the electric cars?

In fact, such concerns are somewhat exaggerated. After all, more than a hundred years ago, someone was worried about “too many cars, too narrow horse-drawn carriage roads, what should we do?” Therefore, we should believe that the problem of electricity will be solved eventually. The only question is whether the cost of using electric cars during this transitional period will fall on every electric car owner.Auto manufacturers are well-aware of these issues, like BMW, which erected a large advertisement outside the exhibition hall to present its entire lineup of electric vehicles. However, the more significant launch at the event was the mid-cycle refresh of its volume-leading 3 Series gasoline-powered vehicle, the king of the small cars, and the sportier, more performance-oriented M240i. They are not expensive, compared to the luxury-brand pricing system (under 500,000 RMB), so it’s clear they will continue to take on the task of being the top-selling models.

In my opinion, the more sporty and technological changes to these two cars, such as the extensive dual-screen display in the car, are based on successful foundations. But, in order to meet the trends of the future, the shift lever has been changed to shift paddles, which still leaves me a little bit disappointed. It’s not that I don’t want to keep up with the pace of technology, but I want my right hand to have a place to rest while driving. Therefore, adding an option to choose between paddles or shift levers might help BMW sell more cars.

Mercedes-Benz’s outdoor advertising is not so aggressive, mainly displaying gasoline, hybrid, and peak models like the big G. But while raising its profile, it still considers volume as a factor. This time, the volume responsibility of Mercedes-Benz belongs clearly to the EQE. Mercedes-Benz’s strategy is clear: by raising the brand’s tone with the previously launched EQS, then creating a smaller version of the EQS (EQE), to officially compete in the volume market.

Therefore, Mercedes-Benz’s promotion is entirely based on product strengths such as the reliability of the materials used, product usability, and stability on long-distance journeys. In fact, with Mercedes-Benz’s own powerful product system, and the reliability parameters and technological configurations accumulated through the EQA, EQB, and EQC product lines for pure electric vehicle technologies, reliability, and durability, it is enough to shape it into a genuine mid/high-end pure electric vehicle suitable for everyone.

The issue facing the EQE’s volume is simply whether Mercedes-Benz’s overall positioning and performance configuration choices will appeal to more people. As for the product itself, our company’s Car Master has already conducted an in-depth analysis:

Compared to its two competitors, Audi, which wants to run the quantity again, may need to do more. They should raise their own tone, let consumers break away from their past cognition, and redefine the luxury belonging to Audi. Previously, they have launched the Hoshi version of A8L and the new A6L model, which is positioned as more sporty and youthful.

At this Chengdu Auto Show, Audi directly hit hard and launched the S8L. Simply put, it directly upgrades executive sedan to performance sports cars, equipped with 48V light hybrid 4.0T twin-turbocharged engine, which is the same intention as Mercedes-Benz’s EQS. Put all the new technologies on top.

After all, only by recognizing top-level products can they attract more attention to their entire series. Especially in the framework of new energy categories, Audi needs S series, and even RS series to catch up comprehensively with BMW’s i series and Mercedes-Benz’s EQ series, to achieve the goal of promoting sales and re-rising in the BBA luxury system.

SUV, a new direction in the fight for top spot

Although in the past few years, SUV product category has shown a trend of slowing down in sales, we cannot deny that it is still the most competitive product category in the Chinese market. And this time, the focus may be different from before.

Jeep’s booth, which must be visited in the past SUV product category, is gone this time. If you want to see Jeep’s cars, “Jianguo Motorcycle”, a refreshing stream in Hall 12, can show you two types of Wrangler models to satisfy your craving. Most of the time, Land Cruiser and new Outlander from FAW Toyota and GAC Mitsubishi, respectively, may be the products that more people can pay attention to and choose in daily car purchase.

In addition, you should also pay attention to hybrid models, such as the newly launched Lynk E-Motive technology-equipped Lynk 01 EM-P; and the SUV product line of SAIC Maxus, which now carries Asia’s first diesel light hybrid power-“SAIC Maxus Xuan Yuandong Power Technology”. These products, with their own brand technology reputation and unique product technology, have the possibility of expanding a new segment market and running quantity.But often, automakers want more than just selling high-volume cars. They also want to occupy the commanding heights of the product system and conversation. Take Land Rover, for example.

Land Rover has the qualification to do this. After all, as one of the only two global brands that produce off-road vehicles and SUVs, they have a significant say in the field. More importantly, Land Rover has always been a luxury brand. Therefore, at this year’s Chengdu Auto Show, they began to showcase their product lines.

They led with the Defender model, which had already been launched and received very good market feedback, and the new Range Rover as the flagship model at the auto show. At the same time, they used the SVO department to create the SV model with ultra-high-end positioning and prices ranging from 2.888 million to 3.328 million yuan to redefine their luxury, high-end image. This also serves to restructure the product lines of Range Rover Sport, Hybrid, and Velar L, and further drive sales of these models.

The strategic significance of this move is more important than the tactical significance. If this strategy is successful, Land Rover will have the potential to have the commanding voice of SUV models in the future Chinese market. Of course, it’s not just Land Rover that wants to do this. American SUVs equally won’t give up their product-market dominance. After all, following Jeep, Lincoln made an appearance in Chengdu.

At the Chengdu Auto Show, Lincoln brought the previously launched Lincoln Navigator long-wheelbase presidential edition. Different from Land Rover’s all-terrain and technologically flashy design philosophy, the overall styling of this full-size American SUV is “strong and rugged”. The overall price range of 1.158 million to 1.298 million yuan includes both Lincoln’s desire to set a benchmark and their intention to really sell cars.

Overall, this kind of change may bring new directions to the competition among top-tier SUV models. It is a new note when it comes to hardcore off-road vehicles look to the “G-Wagon,” and city sports look to the Cayenne. After all, Land Rover can do hardcore off-road, while the Navigator is more city-oriented (although, it is clear that BBA’s SUVs in this segment also have a say here).

Of course, if it doesn’t work out in the high-end market, having good sales among more accessible products intended for other sub-markets is also a win.

New Cars, New Trends

In this era of car shows, you can’t ignore new automakers, and you definitely can’t miss Hall 10, which currently features most mainstream new brands.Compared with the mature strategies and ideas of traditional automakers, new automakers need to continuously create new approaches and explore new paths despite the continuous rapid development, policy support, and increasing market acceptance. One example is GAC’s newly announced second flagship model HiPhi Z with a price range of 610,000 to 630,000 yuan, which demonstrates an adjustment based on overall market consumption while maintaining its high-end positioning in order to truly increase product volume.

Similarly, NIO’s ET5 targets the B-segment sedan market and seeks to increase sales volume. Its new version displayed at the Chengdu Auto Show has improved acceleration, braking, and range data compared to the ET7, making it a non-compromised volume version. Furthermore, the sales goal for this version targets the BMW 3 Series. According to Qin Lihong, co-founder and President of NIO, “In the past year, the average monthly sales of BMW 3 Series exceeded 12,000 vehicles. ET5’s sales will surpass 3 Series within a year.” While it is unknown whether this goal will be achieved, NIO’s direct challenge to BBA by focusing on sales volume rather than solely on product is commendable.

For new automakers, launching products is still a priority in order to survive. At this year’s Chengdu Auto Show, the Geely-owned brand Geometry began selling its new M6 model. With a price range of 152,800 to 174,800 yuan, two battery range options, and equipped with the HarmonyOS vehicle system, the product is generally anchored towards a more economical and mass market positioning.

Geely’s Frequent Actions in the New Energy Vehicle Market in Recent Years

Geely has been very active in the new energy vehicle market in recent years. In addition to focusing more on the Lynk & Co hybrid, and wanting to position itself as a mid- to high-end brand with a price breakthrough of 350,000 yuan for the Ji Ke, the appearance of Geometry will complement Geely’s overall new energy product system under 400,000 yuan and seize more easily deployable electric vehicle market. With this piece of the puzzle, Geely’s entire new energy product system under 400,000 yuan will become more complete.

Talking about car machines, we also need to mention that Ford’s electric vehicle announced that in the future, electric horses will be upgraded to Qualcomm 8155 chips across the board, which includes purchased vehicle owners and non-delivery vehicle owners. OTA upgrades will also be made based on this. In short, Ford hopes to attract more consumers by improving driving and machine experience.

More Companies, At Least First to Start

Moving upward is almost the collective wish of all brands that have not yet completed their upward movement. In order to complete this upward movement, it is often necessary to rely on product strength and the courage to aim higher.

For example, before the Chengdu Auto Show, MG launched the Black Label model and then launched the MG7, which was called the domestic “Panamera” by the outside world, under the Black Label. Above this concept-like product, the low-profile, wide-body, sports calipers, through tail lights, and 33-inch integrated ultra-wide floating screens are on display. Although it did not bring much surprise in terms of core power, at least there was a significant leap in design.

Such changes are difficult not to associate with the GAC Motor’s popular and stylish Trumpchi Yukon last year, as well as the entire BYD series that has had a qualitative leap in brand design.

Also in the design, the Buick’s new concept car – Electra-X, which also comes from the SAIC system, has made improvements. This is a pure electric SUV model based on the General Motors Ultium electric vehicle platform, integrated with General Motor’s brand new VIP intelligent electronic architecture. It is said to be an SUV model, but the overall drop of the roof directly classifies it as a coupe in terms of visual design.

What’s more important is that this car is not an independently existing product for future trials. The Announcer launched at this auto show also uses this design language.If some brands cannot immediately produce stunning and groundbreaking products in terms of overall technology and science due to cost and market positioning considerations, then making oneself look good is also a good small goal.

It’s not just about cars, it’s about hope.

Since it’s a car show, the product is naturally a decisive factor, but more importantly, it’s actively seeking customers’ needs. In previous car shows, local dealers’ salespeople started to enter the venue and communicate with visitors and leave their contact information in the afternoon of the media day.

But I have never felt the enthusiasm of salespeople like the one at the Chengdu Auto Show. Almost everyone wants to pull every passerby to their car and carefully explain the product. BYD, which has severely capped productivity, has even arranged a large number of sales teams at its booth.

Making friends before discussing delivery time is always a good idea.

Just a few days before the Chengdu Auto Show opened, China’s technology giant Huawei blew a cold wind of “survival” which plunged many people into pessimistic expectations. But if we turn around and think again, it is obviously necessary to start with oneself to survive in a harsher environment and in an environment where the overall global economic expectation is bleak.

Whether it is to reorganize the product line, or to fight for the right to speak in the market, whether it is to readjust market positioning or to come up with more stunning and exciting products, they are all the first steps to change.

Change is never easy, just like the Chengdu Auto Show held in this power shortage summer, but as long as you start running, there is always hope.

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.