Author: Zhang Chi
Introduction
In China’s automobile sales ranking, BYD is now far ahead. In September and October, BYD’s sales exceeded 200,000 vehicles consecutively, leaving other competitors far behind. In the first 10 months of this year, BYD’s new energy passenger car sales reached 1.3928 million, a year-on-year increase of 239%. It is very difficult for mainstream passenger car companies in China to achieve this growth. Under this circumstance, BYD launched its high-end luxury car brand, which is a natural progression towards further brand improvement. The first model of the brand, YANGWANG, is expected to be launched in the first half of 2023.
YANGWANG汽车, helping BYD improve its brand matrix
YANGWANG aims to fill the gap in the market and further enhance BYD’s brand appeal by launching new models priced between 800,000 and 1.5 million yuan. Currently, BYD has four relatively independent and differently positioned automobile brands, namely, Dynasty Network, Ocean Network, DENZA and YANGWANG. DENZA’s cars are priced below 500,000 yuan, and this market is already crowded with many different car models, especially the high-end MPVs in China. However, there are no self-owned brands in the million-yuan-level market yet. For BYD, it can use its advantages in new energy and compete differently among well-known luxurious brands such as Land Rover and Mercedes-Benz G-Class.“`html
Hard-core Off-road is Not Easy
Compared with other car models, among global automakers, it is a good choice to use hard-core off-road SUV as the flagship model of the brand. Therefore, BYD put its first million-level car model on hard-core off-road, which is feasible from the perspective of product layout and planning. But compared with ordinary passenger cars, hard-core off-road SUV has bigger challenges on technology.
In order to build hard-core off-road SUV, BYD has applied for multiple patents. One of the patents is a four-wheel four-motor design scheme, that is, each motor drives a wheel, and based on the vehicle’s speed, throttle, and a set of self-set algorithm, different torques are allocated to each driving motor to achieve the best driving and braking performance. There is also a patent for the unique fording mode of hard-core off-road SUV. With the fording mode, it means that the hard-core off-road SUV can cope with deeper road surfaces such as wading. That is, when the vehicle is in a floating state, the whole vehicle still has the ability to get out of trouble.
“`But we have to say that building a hardcore off-road vehicle is not an easy task. Previously, Great Wall Motors also launched a hardcore off-road SUV, H8, during its heyday, but due to noise in the transmission system, it had to delay its launch. This means that even Great Wall, a manufacturer that focuses on SUVs, faced significant challenges in its first attempt at a hardcore off-road SUV. For manufacturers like BYD who have never ventured into dedicated off-road SUVs, they may encounter even more difficulties. After all, the example of Great Wall has told us that the problems encountered by the H8 were not only the fault of its supplier, ZF Friedrichshafen, but also enlarged in the match between different systems or the ability of vehicle integration in a hardcore off-road SUV.
Besides technology, competitor models are also something that Yema Auto needs to consider.
As we all know, after the hot-selling Tank 300, Great Wall Motors has already formulated a very detailed plan for the future, which will introduce models positioned higher than Tank 300. Tank brand itself is positioned as a hardcore off-road vehicle, and with Great Wall’s experience in the SUV field, Tank’s future upward push has the potential to draw away many of BYD’s customers. As for Land Rover, it is a company that surpasses BYD in both reputation and core technology accumulation in the field of hardcore off-road SUVs. The million-dollar imported Land Rover also has a high demand in the market. Putting aside the pure electric Yema flagship SUV, it is difficult to determine whether consumers will choose the Yema hybrid or the Land Rover plug-in hybrid in a similar price range. But one thing is certain, many consumers will switch to Land Rover.## How to Perform Differential Configuration?
For a new brand to achieve a million-dollar price tag, there are many challenges to be faced. Especially in the field of intelligent electric vehicles, the two most critical systems are the “three-electric systems” and “automatic driving”.
For BYD, its R&D capabilities in the underlying technology of the “three-electric systems” are beyond doubt. However, whether the vehicle models under the BYD brand will share the same “three-electric systems” as those under its other brands remains unknown. If the “three-electric systems” are shared among different brands, it will be a great challenge for the BYD engineering team to differentiate their products. After all, whether it is the DM hybrid system, the “e platform 3.0”, or the “blade battery”, it is not easy to convince consumers to pay a much higher price tag in comparison to other vehicles.
As for autonomous driving, it has never been BYD’s strong suit. Even Wang Chuanfu himself admitted that BYD won the first half of the intelligent electric vehicle game, but in the second half of intelligence, it needs to start all over again. Therefore, in order to look up to the auto industry, BYD will introduce Huawei’s HI autonomous driving technology system. However, differentiation is also a problem that BYD must consider, after all, Huawei HI is not exclusive to Yingshi Auto. Beiqi Jiuhu, Changan Aweita, GAC, and other future vehicle manufacturers may also purchase it. Of course, while introducing Huawei technology, BYD has also signed a joint venture agreement with another domestic autonomous driving technology company Momenta. In the future, we do not rule out the introduction of Momenta’s related technology by BYD on other models.
In addition, we also have to say that even the most advanced autonomous driving technology in the world has not fully rolled out L3 cases in the passenger car field. The most advanced case is Mercedes-Benz, which opened up L3-level autonomous driving on German highways at a maximum speed of no more than 60km/h, and L4 is still very distant from us. So no matter how manufacturers promote it, they still cannot get rid of the concept of driving assistance, which means that the driver is the leader of the entire driving activity. Therefore, from this perspective, the customer experience of autonomous driving is not very obvious.For BYD, if it can achieve a certain sales volume and occupy a relatively leading position in the segmented market, the overall brand influence of BYD will be greatly improved. Currently, although BYD’s sales volume is not low, it has to be admitted that many of BYD’s models are used in the mobile travel market, such as ride-hailing services. If BYD wants to further expand and strengthen, it definitely needs to continuously improve its appeal to the consumer market. Taking advantage of the current high sales volume of BYD, launching the “Yuanwang” brand to try the upward brand strategy is the most suitable opportunity. The results remain to be seen.
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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.