Author: Kaijun Qiu
Editor: Kaijun Qiu
Lufujun, born in 1964, took over a car company that is older than him — Beijing Automobile Manufacturing Plant, founded in 1951.
Inexplicably, there is also a destiny. This sturdy man from Shandong still carries a military aura to this day. And Beijing Automotive Manufacturing Plant, formerly known as the Sixth Automobile Manufacturing and Distribution Plant of the People’s Liberation Army, later renamed by Commander-in-Chief Zhu De, produced classic military vehicles such as BJ 212 and Warrior.
The military career made Lufujun feel a sense of mission — to make this glorious automotive factory shine in the era of electric cars.
Both soldiers and military factories are things of the past, and no matter how lofty the dreams, they must abide by commercial laws. How can Beijing Automotive Manufacturing Plant (referred to as BAIC Manufacturing) capture market opportunities?
BAIC Manufacturing’s latest move is to launch an A00 pure electric car — Yuanbao. On May 18th, BAIC Manufacturing launched the pre-sale of Yuanbao, priced at 34,900 yuan – 49,900 yuan, positioning it as “smart and enjoyable, pure and cute small car”.
From the competition pattern, A00 pure electric car has many strong players. “The competition is fierce. However, after Chery Ice Cream and other competing products were hot in sales, it did not affect the sales of Wuling Hongguang MINI. What does this show? It shows that there is a vast user demand,” said Shi Yuanfa, General Manager of BAIC Manufacturing New Energy Marketing.
In addition to the A00 pure electric car model to be launched by BAIC Manufacturing, BAIC Manufacturing plans to sell 50,000 electric passenger vehicles this year, laying a foundation for the old brand to make a splash in the new era.
Shifting to Qingdao, Four Major Bases
In July 2020, Lufujun took over BAIC Manufacturing.
After this old car factory changed its new owner, it showed its mettle. First, it moved and established Beijing Automotive Manufacturing Plant (Qingdao) Co., Ltd. with an investment of 15.2 billion yuan to build a new factory, and also moved its headquarters here.
In addition to the original Hubei Huanghua Base and Dezhou Base, BAIC Manufacturing has also established new bases in Qingdao and Linyi. BAIC Manufacturing’s four major bases cover MPVs, pickups, small micro-cars, off-road vehicles 212, new energy passenger vehicles, city pure electric logistics vehicles and other models, with a total investment of nearly 45 billion yuan, the first-phase project has a production capacity of 450,000 units per year, integrating scientific research, technology, production, testing, sales, operation, etc.
As the headquarters, Qingdao naturally carries the most weight. The Qingdao headquarters base started construction in October 2020, covering an area of 1,700 acres, and the first phase plans to produce 200,000 units of passenger cars, commercial vehicles, military vehicles, and refitted vehicles (including both traditional and new energy vehicles) per year.
In December 2021, the BAIC Manufacturing Headquarters Base went into operation and became an automated car manufacturing plant which includes research and development testing, engine manufacturing, as well as stamping, welding, painting, and final assembly.
The first models produced at the BAIC Manufacturing Headquarters Base were two small trucks. However, this production line is a flexible automated production line that supports the production of various types of cars, including A00 and A-class passenger cars, small trucks, and MPVs.
Before the Yuanbao model was produced here, the BAIC Manufacturing Headquarters Base collaborated with Modern Auto to co-develop and produce A-class cross-border vehicles called Modern In. It can be said that production and manufacturing are already running smoothly. With the addition of small trucks, the BAIC Manufacturing Headquarters Base is now producing nearly 2000 vehicles per month. With the mass production of Yuanbao and MPVs, the output of the BAIC Manufacturing Headquarters Base will increase rapidly.
Better Configuration at a Lower Price with Yuanbao
BJ 212, Yongshi – these classic models of BAIC Manufacturing will welcome a completely different family member – the Yuanbao.
The Yuanbao is a three-door, four-seater micro electric car. Compared to the benchmark vehicle of this category – the Wuling Hongguang MINI EV, Yuanbao is larger in size, especially with a wheelbase that is longer by 110mm – which means more interior space. In terms of power performance, the two are extremely similar.
In terms of price, the presale price of the Yuanbao is similar to the selling price of the Hongguang MINI EV. Although the Hongguang MINI EV has a car model starting at a minimum price of 32,800 yuan, its main selling price is over 38,800 yuan.
Apart from the advantage of interior space, Yuanbao must have other competitive advantages against Hongguang MINI EV.
Yuanbao’s ace is intelligence.
“We have achieved the first dual 10.25-inch display screens for vehicles priced below 60,000 yuan in the industry,” said Shi Yuan, Deputy Director of Marketing for New Energy Vehicles of BAIC Group. At the same time, Yuanbao is equipped with 360° panoramic images, as well as intelligent voice interaction system.## A00 car with intelligent functions: why not remove them for cheaper price?
Introducing the Time and Space Design (TSD) methodology, BAIC Motors focuses on users and creates cars that cater to specific needs and scenarios. The features of Yuanbao are designed especially for the target audience, based on their needs and usage scenarios.
“Yuanbao is positioned to serve the new age ‘mother treasure’ and women from small towns, with a focus on the scene of mother-child transportation. Therefore, we want to make it more convenient and comfortable for ‘mother treasure’ to pick up and drop off their children,” said TSD.
“Double screens enhance entertainment, especially for younger users,” said TSD. Yuanbao comes with voice control and mobile mirroring features that enable kids to watch videos and car owners to listen to music or answer the phone. These configurations have put Yuanbao on par with car models that cost over 100,000 yuan.
“In addition, parking is a big pain point for women drivers,” says TSD. The 360° panoramic image and front and rear dual radars of Yuanbao allows drivers with less experience to easily park and start on complex roads. “Especially around schools and kindergartens, where a variety of vehicles are congested and parked haphazardly, plus lots of children and the elderly, the 360°+ front and rear dual radars make it more convenient and safer for female drivers to pick up and drop off their children.”
“To compete with Wuling and engage in price wars is definitely not our way. However, our car is relatively better equipped with intelligent functions compared to Wuling and Chery”, said TSD. “We want users to get more value for the same price, which is 3,000 yuan more than Wuling.”
TSD believes that this is related to the original intention of car making. “Micro-sized electric car users deserve respect. They are the fundamental force of national development, young people in the Z era, who not only have travel needs but also require intelligent, entertaining and comfortable configurations.”
Sink marketing, one thousand shops in one thousand cities
Targeting specific users requires channel connection.
“Based on the characteristics of Yuanbao, BAIC’s marketing strategy is to cast a wide net and sell cars nearby, similar to fast-moving consumer goods. We do not use traditional 4S stores because the car’s range is 120 to 170 kilometers, and user radius is 30 kilometers. It is not possible to go to the city just to buy a car,” said TSD.
Regarding agent grading, BAIC Motors does not appoint regional agents but divides agents into counties, with one store per county. “We call it the ‘one thousand shops in one thousand cities’ model,” said TSD.In terms of brand-specific requirements, Beiqi Manufacturing adapts to local conditions. In core markets such as Shandong, Henan, Hebei, Jiangsu, Anhui, Zhejiang, agents can only establish exclusive stores for Beiqi Manufacturing and cannot sell other brands. Outside core markets, depending on the local market size, multi-brand dealerships can be allowed to join.
This strategy has lower barriers to entry than general passenger car brand requirements, while still ensuring the strength of the dealerships. According to Time-Element Law, since January 2022 when Yuanbao was launched, Beiqi Manufacturing’s nationwide franchise exclusive dealerships have approached 400, with more than 10,000 orders. “I’ve already received more than 200 million yuan in deposits,” said Time-Element Law.
Among the nearly 400 dealerships, core markets such as Shandong, Henan, Hebei, Jiangsu, and Anhui account for over 80%. In addition, 70% of the dealerships are already operating other new energy passenger car brands, “with cars and experience.”
After Yuanbao, Beiqi Manufacturing also planned a second A00 model, codenamed S5, which is expected to begin pre-sales in August and be officially launched in September.
In addition, Beiqi Manufacturing is also planning a new A0-level product with an estimated range of 200 km, 300 km, and 400 km, respectively, to meet the needs of users with greater space requirements. Together with the existing A-level crossover vehicle, the product lineup is relatively rich.
Overall, Beiqi Manufacturing’s product plan will focus on pure electric passenger cars within 4 meters for users in third- and fourth-tier cities and even rural areas.
Although there are many players in the A00 electric vehicle market, the incremental market is vast. With 71 years of brand accumulation and strong technical expertise, Beiqi Manufacturing has confidently entered the market with a sales target of 50,000 vehicles. After achieving economies of scale in production and sales, Beiqi Manufacturing can further reduce business costs and supply costs, continue to research and develop innovations, and bring more intelligent and economical travel products to more users.
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.