The media under the Outing BaiRen Corporation focuses on the evolution of the automotive travel industry chain.
Author: Roomy
What kind of person would buy a high-end vehicle like HiPhi?
This question was frequently asked of Ding Lei, the founder of the HiPhi brand, since its inception.
When the first model, HiPhi X, was launched, with a price of over 600,000 yuan, a large number of flamboyant phrases and incomprehensible jargon were piled together, making this brand unfamiliar to many consumers and subject to much scrutiny.
At that time, Ding Lei’s response to the user profile of the HiPhi brand was not so concrete. High-end, trendy, and fashionable, it seems that every type of consumer group has various car brands vying for their attention. Who exactly does the HiPhi brand’s user group, the so-called “dawn pioneers”, want to capture?
“Ding Lei doesn’t know what his first customer’s special traits were, but having money is a necessity,” a comment that was seen many times before. A few days ago, during the HiPhi Z concept car launch event, Ding Lei mentioned this issue during an interview.
“Because HiPhi X was our first car, there was no very clear user at that time, but today, there are very clear user groups who like us.”
In Ding Lei’s words, the users of HiPhi Z also belong to the broad range of “dawn pioneers” for HiPhi users. “HiPhi users are those who stand at the forefront of society and like to explore, achieve a kind of ideological freedom, and then create again.”
To be honest, the descriptions of user profiles, whether for brands targeting young consumer groups that cost tens of thousands of yuan, or for brands targeting luxury values that cost hundreds of thousands or millions of yuan, are all depicted in a “muddle” and “similar” manner. Therefore, when it comes to what kind of person would buy a HiPhi brand, I and netizens maintain a high degree of consensus that “money comes first.”
Fruit, the director of advanced development and market communication at HiPhi, said in an interview, “Many of our car owners are ‘downsizing consumers’. Buying our car is relatively cheap in their garage.” Survey data also shows that the majority of HiPhi’s user groups come from ultra-luxury brands.
So, another concern arises. How will HiPhi continue to develop this user group?
Currently, there is no high-end electric vehicle model priced over 600,000 yuan that can maintain long-term stable sales, and drive the transformation of luxury electric brands. Mercedes-Benz, BMW, and Audi all hope to become the driving force, but they are facing a similar situation. Once proud, they have now become the biggest burden.As a new brand, GAC Group’s first delivery of vehicles has not been fully digested by the market, and the market test results are not high. In this market where the first shovel has just been dug, can the launch of the second model HiPhi Z open up a broader space?
Just as some joint venture car companies have said, when new car-making forces reach a certain level of sales, they will inevitably face the test of the system’s capabilities, whether it is the already surpassed 100,000-vehicle threshold of NIO, or other participants who are striving for this goal. “After reaching a certain volume, the ability of the system will be tested, which is a traditional car company’s strength.”
In the embarrassing period of transformation and adjustment before the advantages of traditional car companies become apparent, seizing more market space is something that all new car-making forces are vying for. Ding Lei is also eager for this.
“Racing against time.”
From the positioning of HiPhi Z, one can also see a sense of urgency. GAC Group calls HiPhi Z the world’s first Digital GT with digital life characteristics, a traveler from 20 years in the future.
This model, which will be put into mass production and listed next year, directly stretches the span of the marked future sense to 20 years later. A press conference where one is unable to complete the conference due to using complicated language is enough to show that this model, which emphasizes “digital life forms”, is difficult to understand with popular concepts.
Is this racing against time, and running too fast?
Some people jokingly say that He XPeng, who has always been shouting “to be seen in mass production”, is unwilling to ride a time machine to 50 years later, and Ding Lei has directly provided a car for him to see what smart cars will look like in 20 years.
As for why it is defined as 20 years later, such an overly fanciful concept of time?
Ding Lei gave some answers, “The design concept of GAC Group’s product is to start from ideology, then to concept, and finally to definition. We adhere to GAC Group’s three major definitions: “defining design with scenarios, defining cars with software, and defining value with co-creation”.
Sounds like a déjà vu of “very powerful, but I didn’t understand.” No matter what the concept is, it will ultimately land on the vehicle model.According to the rumor, Ding Lei dreams of bringing designs from 20 years into 2021. And 95% of the engineering problems for this car have been solved, so the car is almost ready for mass production. “HiPhi Z has locked in 95% of the production content, and the remaining 5% depends on engineering matching to determine whether to increase or decrease it.”
Gahe believes that HiPhi Z is already a mature product, and the smart configuration after mass production is almost the same as the information currently released. HiPhi Z will be equipped with HiPhi bot onboard robot and HiPhi Pilot assisted driving system. It comes standard with a Snapdragon 8155 chip, 1 LIDAR, 2 HD cameras with 8 million pixels, 5 millimeter-wave radars, and 2 infrared night vision cameras, and uses the nVIDIA Orin-X computing chip.
From positioning to technological configuration, there are still some differences from the first car. How to create core competitiveness in the future is what Gahe needs to consider for the second car, HiPhi Z.
“Some core capabilities have been demonstrated on HiPhi X, and we will further deepen them on HiPhi Z,” Ding Lei said. On HiPhi Z, the entire electronic architecture has been further upgraded. Self-developed intelligent cockpit and full-stack development of autonomous driving form the comprehensive competitive advantage of Hua-Chi Yun Tong in products.
“HiPhi Z has a more precise understanding of its product positioning and target users.” Ding Lei answered with more confidence than a year ago. “After the two models form a dual-flagship layout, the development will continue in a waterfall style and penetrate various segmented automotive markets such as mid-to-high-end.”
From a strategic level, Gahe is trying to bypass We Xiaoli in the future strategy and wants to establish a foothold in the 600,000-800,000 yuan luxury high-end electric vehicle market, and then explore down-market models.
This type of planning is reasonable and is also a strategy that many high-end new forces adopt. There is an unwritten “rule” in the industry: it is easy to start from the top and difficult to start from the bottom.
Just like Mercedes-Benz first made the S-Class, and then it has the C-Class, BMW started with the 3 Series and then it has the 7 Series. These two old rivals have been proving who is more luxurious for many years, and Mercedes-Benz is clearly superior. The brand-going-up war of domestic independent brands also illustrates the difficulties of moving upward.The challenge for GAC is how to establish its foothold in the high-end market. In September, the sales of the GAC HiPhi X reached 641 units, surpassing Porsche Taycan’s 585 units, becoming the sales champion in the monthly sales list of luxury electric vehicles priced over 500,000 yuan.
This achievement was accomplished in just a few months. The sales distribution also corresponds to GAC’s network layout with higher sales in the north, east, south, and southwest regions.
GAC is also pleased with their achievement, “GAC still has less than 40 stores, so if we have 5 times as many stores, the sales figure should at least triple or quintuple. It is a very impressive figure.”
Although the assumption is not entirely accurate, the GAC HiPhi X cannot yet be considered a success. This is because none of the electric car models have yet found true brand premium capacity in the market priced over 500,000 yuan.
This price range is considered the dividing line between gasoline cars and intelligent cars, and current intelligent car models mainly compete in the 150,000-400,000 yuan price range. Additionally, the 600,000-800,000 yuan market is dominated by luxury brands. “It is difficult to break into this unclear area of the market,” says a market analyst who is not too optimistic about new brands working in this market.
“Although the sales performance is good, there is no solid capital, which still depends on the second model,” says the analyst. Currently, GAC is mainly digesting the first batch of early users, and obtaining subsequent users is critical.
“Maintaining sales of 500-800 for over six months is considered a foothold.” For example, luxury brand electric vehicles like Mercedes-Benz EQC, BMW iX3, and Audi e-tron have always been hovering on the edge of the electric vehicle market, which also highlights some issues.
The market that GAC’s two vehicle models want to target is in this price range, which requires significant brand premium capacity. As a new brand with only one vehicle model, this is also the biggest challenge.
What should be done after the existing user base is consumed? Perhaps the answer from Ding Lei will have to wait until April next year.
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.