This article is reproduced from the autocarweekly WeChat public account.
Author: Hu Laquan
There was a well-known Internet industry tycoon who predicted that the basic pattern of competition for Chinese automakers in the next round would be “3+3+3+3”: three central state-owned enterprises, three local state-owned enterprises, three traditional private enterprises, and three new carmakers. In other words, behind today’s fierce competition, perhaps only 12 positions will remain.
Since the emergence of “new carmakers” in the early 2010s, this concept has been around for almost ten years. The earliest batch of new carmakers have already been eliminated, while the latest batch of new carmakers are constantly emerging.
Has the quota for “three new carmakers” already been determined? Are the leading companies that have already gone public worry-free? Do the newer companies that have entered the competition later still have a chance to shake up the former? The answer is obvious. Otherwise, it cannot explain why, in 2022, there are still new start-ups joining the car-making competition.
The term “new carmakers” is no longer “new”, but even the earliest new carmaker companies have not yet reached ten years old. In just a decade, for a company or an industry, it is like a blink of an eye. The automotive industry is particularly difficult. Some have asserted long ago that making cars is not a 100-meter sprint, but a marathon.
The Long Run Depends on Acceleration
On the sixth anniversary of Leapmotor Auto at the end of 2021, CEO Zhu Jiangming declared ambitiously in an internal letter that the company will “enter the race for the championship” in this marathon. A few years ago, few would have believed that this young company would have the confidence to join the industry’s top echelon so quickly.
In the past year, Leapmotor achieved the highest average monthly delivery growth rate in the new energy industry (year-on-year forecast), especially in the eight months from April to November, the average monthly growth rate reached 661.8%. In comparison, the growth rates for the familiar “WmAuto Li” for the period from January to November last year were all between 200% and 300%.
2021 was a year of comprehensive renewal for Leapmotor’s product line. The original main-selling model, the T03 smart pure electric vehicle, passed a complete sales year for the first time. In October, the new model, the pure electric SUV C11, began official deliveries, marking Leapmotor’s market space extending from commuter cars to mainstream household cars.
Under the joint efforts of several car series, Leapmotor achieved a total delivery of 43,121 vehicles throughout the year. In December of last year, Leapmotor delivered a historic high, with a MoM growth of 39% and a YoY growth of 368%, with a monthly delivery of 7,807 vehicles. As new models, including the Leapmotor C11, began to exert their strength in the fourth quarter, Leapmotor’s sales in 2021 showed a clear acceleration trend, indicating that its sales performance in 2022 will be further improved.
It is precisely this amazing acceleration that has given Zhu Jiangming the courage and confidence to call for the “finals”. Before 2022, Leapmotor had been committed to creating urban commuting boutique cars, belonging to the same new car category but with a markedly different market segmentation than “WeSmall” and other players. “Latecomers” have their own advantages. After years of trials, Leapmotor is more confident, mature and skilled in joining the mainstream family car battle.
Everyone knows that car manufacturing is not an overnight job. The hundred-year-old auto companies are on a long road, not a short one, and winners cannot be determined in just a few years. Making cars is like running a marathon, not a sprint. Leading in the first half of the race may not last until the end. You never know when another player will take the lead.
The current situation is temporary, and the results are unknown, but the current acceleration is the only reference we have to speculate on the future with awe.
Have a keen eye and a ruthless hand
In 2021, Leapmotor “ran” out of acceleration and has shown a leading trend that surpasses its opponents. Of course, this is inseparable from the quiet changes in its product line. The monthly sales of Leapmotor T03 in December reached 5,627 units, showing a clear upward trend. Leapmotor C11, which has been on the market for only three months, has delivered a cumulative 4,021 vehicles and still has tremendous potential after 2022 when production capacity stabilizes.
It was the steady increase in Leapmotor T03’s sales throughout the year, coupled with Leapmotor C11’s strong support at the end of the year, that allowed Leapmotor to achieve an unexpected year-end result. In the automobile market, hot-selling models are not rare. In the traditional era of auto companies, we have seen many players who quickly disappeared after a flash in the pan with their ingenious tricks. We have also seen many car companies that have succeeded in creating hot-selling products but quickly faded from public view.
Making cars is not like rolling dice, where a “six” can be rolled ten times. For a new car company to break through the competition and enter the finals, it is essential to ensure that each product is well-manufactured. However, it is not easy to create another hot-selling model on top of an already successful one. Leapmotor has done two things right: first, it shows enough sincerity; second, it has precise positioning.Pure electric runabout is not a new thing. In recent years, with the advancement of electric vehicle technology and the pressure of carbon emission credits, there has been a new trend of pure electric small cars. Major automakers have successively launched new generations of mini cars, with some models repeatedly selling well and ranking high in new energy vehicle sales charts.
Leapmotor was ahead of the curve and realized that premium smaller cars were the way forward. The Leapmotor T03, a long-range and intelligent pure electric small car, opened a new chapter for premium small cars in the pure electric era. As early adopters experienced the shortcomings of the simple and cheap small cars, more comprehensive models like the Leapmotor T03 began to attract attention, resulting in the steadily increasing monthly sales in 2021.
As Chinese consumers become increasingly mature, the old-fashioned mindset of bigger is better is no longer adequate. The automotive market is becoming more diversified, hierarchical and granular, especially among the new generation of young consumers who demand more refined and high-quality small cars. The Leapmotor T03 has L2-level intelligent driving assistance capability, more exquisite interior and exterior configurations, and opens up a new era of premium small cars in the pure electric era. Leapmotor’s foresight and market leadership allowed Leapmotor T03 to fill this void at the right moment.
The addition of the Leapmotor C11 was the biggest change to the Leapmotor product line in 2021, not only marking Leapmotor’s entry into the mainstream home SUV market, but also signaling Leapmotor’s new frontier of surpassing full configuration cars. Developing a car requires a lengthy research and development cycle, and automakers need to plan what configurations are needed to ensure that the models are competitive on the day of their launch.
The mid-sized pure electric SUV market was already the most fiercely competitive red ocean, yet there have been few contenders as aggressive as the Leapmotor C11 in recent years. Facing such an enticing but crowded market, Leapmotor’s approach is to be precise and fierce, using a strategic vision that anticipates future trends to set its goals, and then changing the competitive landscape with superior full configuration. The current C11 is not perfect, but in the electric vehicle industry’s intensely stimulating and competitive stage, Leapmotor C11’s appearance once again redefines the quality-to-price ratio of intelligent electric vehicles, and provides consumers with more choices.
What Leapmotor gave us is not just a surpassed fully configured pure electric SUV, but also a fiercely competitive and dynamic market environment.The next model of NIO, according to rumors, will be the high-end pure electric sedan NIO C01. When SUVs are already fully competitive and pure electric sedans are on the rise, NIO will once again appear in the right subdivision market at the right time.
Behind successful products, precise and forward-looking strategic layouts are, of course, not the only factors, and hard strengths of technical capabilities are also needed.
If you search for “全域自研” in a search engine, you will find that NIO stands out among many car brands. After six years of persistence, “全域自研” has gradually become synonymous with NIO. In NIO’s brand genes, “self-developed” has been firmly engraved.
As Zhu Jiangming said in his speech at Zhejiang University, NIO is “losing a bit of initial speed and gaining long-term acceleration.” By insisting on self-development in all areas, NIO did not quickly dominate the market in the initial stage, but the long-term accumulation of technical advantages has shown its power today.
In June 2021, the NIO algorithm team won the first prize in the 2D measurement challenge of the Google Waymo 2021 autonomous driving algorithm challenge. In November 2021, the NIO C11 water-cooled electric drive power system won the “Chinese Heart” 2021 Top Ten New Energy Automotive Power Systems.
Precise and forward-looking strategic layouts, consumer-oriented intentions, and a down-to-earth research and development attitude have made NIO a technology- and product-driven enterprise.
Conclusion
New car manufacturing is one of the hottest and most crowded tracks today. On this track, a simple technical advantage may not necessarily meet consumer demand, and a clever product manager may not have enough strength. Only with no shortcomings in all aspects can an enterprise achieve frequent products success. If a single product’s success may be accidental, “1+1” is enough to demonstrate the problem.
NIO’s example tells us that insight into consumer needs and precise positioning, convincing users with superior sincerity, insisting on putting product technology first, and recreating popular products on top of existing ones still have the opportunity to rewrite the pattern of new car manufacturing world.
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.