On International Children’s Day on June 1st, I was invited to a group interview with senior management of DENZA. Interviewees include DENZA Sales General Manager Zhao Changjiang and DENZA Product Strategy Manager Lv Lixia. Below is an interview summary:
Product-related issues:
Q1: DENZA D9 design issues
Media: What’s different about the door gap design that General Manager Zhao mentioned on Weibo before?
Zhao: D9 uses advanced sliding door gap technology. The side and sliding door design are integrated without hard links between the side sliding door and the roof, which eliminates the groove design. Many SUV models of MPVs and traditional MPVs find it difficult to achieve this gap design. Our car door, when closed, becomes a strong and coherent side. The continuity of the five sides of the side makes our car unique and beautiful. At the same time, it effectively reduces wind resistance and helps with quietness.
Media: For Chinese brand MPVs, such as the Elfa with a tall stature and the GL8 which is a bit lower, how did DENZA consider the proportion of the car body for D9?
Zhao: We consider D9 as an all-around MPV. The proportion of the car body is based on the core of the car’s interior, which aims to optimize space, especially for the third and second rows. If passengers are tall and sit in a small space of the rear row, they will feel uncomfortable. Of course, we have also sacrificed some of the possible endurance. In fact, the endurance can be higher, but we need to balance the proportion of endurance and space. In addition, many forms of entertainment are also a factor we consider, such as camping, which promotes our affirmation of this type of car size design.
Media: Will DENZA’s future products all have non-rotating screens?
Zhao: Yes, we use a parallel viewing design, which is a perfect design solution for us and can provide users with a better experience.
Media: DENZA D9’s interior design is a bit like BYD’s. If the future screens don’t rotate, will the designer have more space to play with?
Zhao: If the screen does not rotate, the design space will be broader for us. Of course, we will continue to innovate and show you better interior designs. But in DENZA D9, our design represents luxury and generosity. We use the π-motion surrounding energy life cabin and focus on the overall environment. We use the overarching cabin layout centered on the driver and passengers to form a strong embracing feeling. The limited space boundaries blend with the infinite, revealing a broad vision.
Media: Many of BYD’s car models have rotating screens. Why doesn’t DENZA D9 have a rotating screen design?Zhao, CEO: We have multi-screen linkage, and for T-Link, we will pay more attention to the intelligent interaction of multi-screen linkage. In order to enhance the integration, we consider the solution for horizontal screen such as parallel window which can display multiple windows and even secondary pages. Therefore, although our screen cannot rotate, it does not affect the normal use.
Q2: T-Head D9 smart Internet connection issues
Media: The car has a large number of screens inside. The low-end version has different numbers of screens compared to the high-end version. Is the chip used in the low-end version the same as the high-end version when it has fewer screens?
Zhao, CEO: All models of the D9 series use a 6nm process, 5G chip with a benchmark score exceeding 500,000 points, and there are no differences. For models equipped with an RSE rear entertainment system, the number of chips will increase, with two additional chips supporting two RSE rear entertainment systems respectively.
Media: Why doesn’t T-Head D9 use the latest Qualcomm chip as it has seven screens?
Zhao, CEO: We use a 6nm process, 5G chip with a benchmark score exceeding 500,000 points for our central control. Based on strong product strength, our car system is absolutely no worse in fluency and user experience than other chips. In addition, for multi-screen display, we use a combination of multiple chips to provide users with a more fluent intelligent cockpit experience across scenarios and ecosystems.
Media: Is the fast charging interface standard on all models of the T-Head D9?
Lv, Manager: The long endurance version and pure electric model of DM-i are equipped with a fast charging interface as standard. The 50 km version of DM-i does not have a fast charging interface because of its short pure electric endurance of only 10 degrees, which can be fully charged quickly without requiring fast charging.
User-related issues:
Q3: T-Head D9 user questions
Media: What is the age group of T-Head D9’s order users? What is the range of user terminals?
Zhao, CEO: T-Head D9’s users have a broad age range, including those for personal and commercial use. The age distribution is relatively wide, ranging from 25 years old to older users. Mainly private home users, followed by private and commercial users. All of the first to fourth-tier cities have orders. For example, we have more than 100 orders in Xinjiang, and our user base is quite different from that of previous MPVs. 30% of users originally chose SUVs and later switched to our MPVs. Many of them are also BYD users who have switched to T-Head, accounting for 30%. Many users have traded in their luxury cars, such as BBA brand sedans or SUVs at home, for T-Head D9.Media: And then there’s the issue about users. What do we think the user profile for the Tencent D9 should be, including the Tencent brand itself, which we just mentioned is positioned as a luxury brand?
CEO Zhao: Part of our user base is low-key and not very flashy. In terms of their car usage needs, they may use it more for commercial purposes, like mature families or those who lean more towards daily work, where they might have business receptions or travel needs. On weekends or holidays, they may take their families on trips to the outskirts or near their homes or even back to their hometowns. So it’s a group of people who balance business and family needs. Another part is for high-end political and business purposes, where we have corresponding high-end models for this customer base.
End-terminal planning, order and delivery issues:
Q4: Tencent D9 dealership network issues
Media: If there are no local dealership outlets, how do you ensure customer service?
CEO Zhao: In terms of channels, we have a fully market-oriented direct-operated model with multiple service modes. Online, we operate a fully digitalized car purchase service system as the core; offline, we have Tencent homes that are shared and co-created with users, the Tencent experience store that focuses on user experience, the full-featured Tencent center, and the convenient Tencent MINI center that is close to users, all of which are four different positioned channel stores. We will deploy 200 outlets this year, covering all 69 cities across the country, to meet the needs of more users with more full and comprehensive services.
Media: We’ve seen that Tencent orders are very hot right now, and almost all orders are placed online. What is the progress of offline channel construction? How is the progress in second-tier, third-tier, fourth-tier, and fifth-tier cities?Zhao Zong: The construction cost of channels is very high. We have invested a lot of resources in promoting channel construction, all of which are directly operated modes. We plan to build more than 200 offline direct-operated stores this year, covering 69 cities, and then will cover 138 cities. Most provinces can achieve a scope within 200km, and 97% of the market can achieve a scope within 100km. We have invested close to 1 billion in channel layout, so we have paid a price in service channels. We have four modes for channels. DENZA Center will be established in the city center: sales, experience, charging, and service. The first one in Shenzhen is located in Guangming International Automobile City; the second one is DENZA mini center, which is closer to users and provides more experience and services such as painting and sheet metal work; the third one is DENZA flagship store, located near the user’s leisure shopping scene, with sales and experience as the core, and exclusive test drives and energy supplement services; the fourth one is DENZA Home, which is a shared experience created with users, forming a new linkage between users and between users and brands. We will also have online modes: official website, WeChat mini program, and DENZA app. We strive to let users enter the store only once by using one-stop and visualized services. In addition, visualization is what we all pursue. That is, all the car-buying processes can see progress. Based on sincere service, we create a full solution. We must step by step put it into practice and continue to work hard. We uphold the concept of being globally the best. We hope to achieve global excellence in products and services to return to our users.
Media: Regarding channels, what is the market layout for Shanghai?
Zhao Zong: Shanghai is the largest market for new energy. DENZA D9 has sold more than 1,300 units in Shanghai, and it is as good as in Shenzhen. How to achieve channel layout and serve users, including competing with well-known local brands in Shanghai’s market, is what we need to focus on. We will take good care of the Shanghai market.
Q5: Proportion of DENZA D9 DM-i and EV
Media: What is the proportion of DM-i and EV models in DENZA D9 orders?
Zhao Zong: From the current orders, the DM-i version accounts for 75%, and the EV version is about 25%. Moreover, our EV model is expected to be delivered in November. I believe that after the comparison between EV models and competitors in the future, based on the BYD Group’s e-platform 3.0, equipped with an eight-in-one electric powertrain, -30°C-60°C wide-temperature efficient heat pump, and blade battery, we have a range of 600+km and there will be two-wheel and four-wheel drive options. I believe that orders for the EV version will further increase.
Q6: DENZA D9 delivery issuesMedia: I’ve test driven the Dreamer model before, and I’m also interested in the DM-i model. Besides the test drive, I want to know about the delivery issue for current pre-order customers. How long will it take to deliver the car to the customers?
CEO Zhao: We currently have over 20,000 orders, and customers are certainly concerned about delivery. We will start delivering gradually in August, and expect to complete delivery for the 20,000 units by October-end. We hope to reach 30 to 40 thousand deliveries by the end of the year. Of course, with more orders in the future, we hope to have more delivery situations. The EV model’s delivery time may be until November, and we believe that in the near future, EV models can account for 30% of the total volume.
Q7: The amount of orders for DENZA D9
Media: The current luxury car market share is only around 2 million cars. DENZA D9 is the first model launched after the brand’s transformation. In this large automobile market, what is DENZA D9’s expected production volume?
CEO Zhao: We see that the Chinese MPV market has not changed significantly for many years, competition is not fierce enough, and it’s still a blue ocean market. There are almost no new energy MPVs. From the perspective of market demand and development, the MPV market above 300,000 RMB is huge. The market should reach 450,000 units this year. For the penetration of new energy, it should reach even higher levels next year. From the perspective of market demand, China has entered a market with product supply, and multi-functional vehicles and new energy have a huge demand in the market. A seven-seater 2+2+3 MPV in first- and second-tier cities is bound to be better than a seven-seater SUV of 2+3+2. Therefore, the household market is huge, and the demand for replacement and upgrading in third- to fifth-tier cities is also very large. We believe that the market share and monthly sales volume should be able to exceed ten thousand in the future.
Q8: The DENZA D9 production line issue
Media: DENZA D9 is produced in Changsha. Will it be produced on the same production line as other BYD models?
CEO Zhao: We use a brand new independent MPV platform to build DENZA D9. We are produced independently and have a dedicated production line based on BYD’s manufacturing capacity and worker training.
Market and Communication Issue
Q9: The household use for DENZA D9
Media: I want to talk about the “business and household” aspect of this car. In what aspects does it reflect its use for households? For example, after the size exceeds 5.1 meters, there will be many inconveniences, such as parking. And in terms of business, the cars will usually be parked at the company’s door, so it will not have these impacts. But for household use, it will generally be parked in a parking space.Zhao, CEO: Firstly, our MPV is a versatile vehicle equipped with advanced technology, including a comprehensive sensing system with 24 sensors and RPA remote parking, making parking effortless. For family use, we also consider the needs for recreational activities, thus we have various intelligent modes such as child mode, karaoke mode, and conference mode. Additionally, we provide four child seat interfaces in the second and third rows, and our standard double-sided electric sliding doors, as well as dual-level pedals for easy access. These features aim to meet family requirements from different perspectives.
Brand-related questions:
Q10: TESLA, Mercedes-Benz & BYD-related questions
(1) Media: My question is not solely focused on the D9 model, as I am aware that TESLA was a joint venture between BYD and Mercedes-Benz with an equal share ownership in the past. After restructuring, BYD remains the majority shareholder, but Mercedes-Benz still plays a part. From my observation of TESLA, I am curious to know how Mercedes-Benz and BYD collaborate to leverage their respective strengths? Since the element of Mercedes-Benz still exists in TESLA, could it bring any benefits to TESLA in exploring high-end markets?
Zhao, CEO: TESLA was co-founded by BYD and Mercedes-Benz as China’s first joint venture solely focused on new energy vehicles. The strength of TESLA X lies in Mercedes-Benz’s design and BYD’s leading-edge technology. We aim to adopt the model of BYD as the key driver, where we have lots of Mercedes-Benz’s technology, especially in the chassis design, thus inheriting many of Mercedes-Benz’s strengths. Regarding your second question on how to differentiate our brand positioning and operational strategy, I would like to emphasize three independent attributes, independent brand, team, and products, all operating independently. Based on these independent properties, TESLA has three major competencies, namely the leading new energy and safety technology in the industry, the leading intelligence, with BYD’s advanced intelligent technology on TESLA models, and a luxury brand with a perfect service system, which altogether represent our positioning as an intelligent, new luxury brand.
Media: Currently, what is the division of labor between TESLA and Mercedes-Benz in new product development, and what roles will both parties play in the future development?
Zhao, CEO: Compared to the new product design and development, which is mainly led by BYD, Mercedes-Benz plays a more significant role in quality aspects, production standards, and user services, with over twelve years of experiences in contributing their unique strengths.
Media: As TESLA is BYD’s high-end brand, what distinguishes TESLA from BYD, and how does TESLA market itself compared to new forces in the industry?
（No modifications needed for this part）Mr. Zhao: We take over the BYD brand system, which is different from the high-end brand that will be launched later. We are a new luxury brand that emphasizes smart safety. Firstly, in terms of luxury, we achieve many leading technologies. Secondly, we lead in intelligence. Thirdly, we lead in user service ecology. We have three independent brands, independent teams, and independent products. In terms of marketing, we do not spend money to buy lead flow. We rely on word of mouth and media to spread the word. We focus on users, products, and service. We will not cover up the actual results. Everything is based on customer satisfaction.
Q11: MPV Market Status and Trend
Media: What is your observation of the luxury MPV market, the current situation in the Chinese market, and future trends?
Mr. Zhao: Well, we can see that the overall market environment of the MPV market is declining, but the growth is still seen in the level that is above 250,000 yuan. It doubled last year and was about 300,000 yuan. I predict that it will still grow this year, and I think it should reach about 400,000 yuan, which is a very large volume. From the market perspective, I think in first and second-tier cities, one car can be used for many purposes. For third, fourth and fifth-tier cities, I think three cars may be needed, like 5-seater SUV or sedan and one MPV, which can meet all needs. I think it may be possible to reach the 500,000-yuan market in the following years.
Q12: DENZA Motors and New Forces
Media: What is the difference between your upcoming SUV models and that of new force NIO’s EC6?
Mr. Zhao: Our product positioning is different from that of new forces. Our upcoming SUV models will have a 5-seater EV version, which will be designed and created with experience, full of sports and technology. In addition, there will be a 6-seater DM-i version, mainly focused on energy-saving and economical aspects, to achieve zero anxiety range, so as to compete with the market of BBA.
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.