[YesAuto News] At the 2018 Guangzhou Auto Show, GAC Group unveiled its seven major brands and contracted one of the exhibition halls. The reason for such a battle is not only because this is the “base camp” of GAC Group, but because of the downturn in the overall auto market, this move may deliberately show its strength to the outside world.
In the first ten months of this year, GAC Group's overall performance exceeded the industry level, with a cumulative sales of 1.757 million vehicles, a year-on-year increase of 7%. But most of this is due to the contributions of the two mainstream joint-venture brands of Guangzhou Automobile Toyota and Guangqi Honda. In contrast, the growth rate of the independent sector is slightly slower.
In order to effectively achieve sales growth, Feng Xingya, General Manager of GAC Group, proposed two major aspects: focusing on products and creating independent innovation. Especially in the face of the new round of automotive industry reforms, he said that GAC Group will focus on electrification, intelligence, connectivity, and sharing, and accelerate the transformation to a mobile travel service provider to provide consumers with a full range of value. Experience.
At present, GAC Group has successively signed strategic cooperation agreements with Huawei, Tencent, Weilai, China Mobile, iFlytek, Cisco China, Didi Chuxing and other companies, and the results are gradually applied to GAC Trumpchi products. At the same time, GAC New Energy, a subsidiary of the group, has released a new pure electric model and a second-generation pure electric exclusive platform on the eve of the auto show.
In terms of new energy planning, starting from 2019, GAC will intensively launch a series of pure electric vehicles at a rate of one every six months; it is estimated that by 2020, new energy vehicle products will account for 10% of the group's total vehicle production and sales.
Car sales have declined this year, and downward pressure on the auto market has increased. Feng Xingya believes that this phenomenon is only temporary and not normal. He bluntly said that Guangzhou Automobile Group is ready to face the challenge with both hands. On November 16, Feng Xingya, General Manager of GAC Group, accepted an exclusive interview with mainstream media including Autohome, and talked about the development strategy of GAC Group and his personal views on the development of the auto market. The following is a transcript of the interview, some of the content may be deleted.
Q: In the past 10 months, the auto market has experienced negative year-on-year growth. This is a trend that has not been seen for many years, and it has also caused a great impact on independent brands. So, how do you judge the impact of the next market changes on the company?
Feng Xingya: This year, the automobile industry has experienced negative growth for the first time in 20 years, which has a great impact on the entire automobile industry. In my opinion, the influencing factors are not single, and it does not mean that China's own car ownership, per capita car ownership, and people's demand for cars have reached an inflection point.
These include (the country's) macro-control and monetary tightening carried out in the beginning of the year and the first half of the year (reasons), as well as our psychological expectations and concerns about the Sino-US trade war. In addition, the auto market environment is closely related to the housing market and the stock market. If the housing market and the stock market are good, the auto market is good. If the housing market and stock market are not good, the auto market will also be affected. Therefore, I think this impact is caused by many factors, both long-term factors and temporary factors.
Taken together, I think this (negative growth) impact may continue for a period of time, but it is not the norm. It does not mean that the auto industry will enter a period of decline at this time. However, this difficulty may continue for some time due to the influence of the above-mentioned factors.
As GAC, we are also ready for both. One is that we are facing the current (market) downturn. Especially when the auto market is in a downturn, the more price-sensitive models will be more affected, but the more luxurious (models) will be less affected. Especially for independent brands, we are fully prepared to face the impact of the overall consumption downturn.
In addition, we are still full of confidence in the future. Once these factors return to normal, it can be expected that the automotive industry will maintain a certain low growth rate, so we still have to make various product development preparations.
Q: GAC has always attached great importance to building its own brands. How do you see the trend of my country's independent brands continuing to focus on mid-to-high end in recent years?
Feng Xingya: As an independent brand of GAC, Trumpchi has both traditional vehicles and new energy vehicles. The core work of the entire GAC Group revolves around our “13th Five-Year Plan”, which is internally called “1513”. The second “1” is to realize the leap-forward development of GAC with its own brand as the core.
Of course, I think that for Chinese independent brands, they (all) face the same problem. It should be said that China’s auto industry has accumulated 40 years of reform and opening up, especially through cooperation with foreign-funded enterprises. At first, it was completely out of the same scope, and now the independent brand has undergone essential changes.
In addition, some consumers may feel that foreign brands and joint venture brands seem to have better quality and higher safety than independent brands, and (have) a strong understanding of them. In fact, the quality level of some independent brands has surpassed that of joint ventures and foreign brands, (but) consumers may not be particularly aware of this.
The development path of each independent brand is also different. Some of the development of Chinese independent brands rely entirely on independent innovation from scratch and grow up without the basis of joint ventures; some are through joint ventures and cooperation to obtain technology, experience, and talents, and then start independent innovation. Road; some simply buy some brands from abroad to find another way.
In particular, after the start of new energy and intelligent networked vehicles, many took advantage of these two opportunities to seize new outlets. At present, the development paths of several types of independent brands have their own characteristics and cannot be generalized. However, in general, the quality level of independent brands has been significantly improved compared with before.
For GAC, we are following a path of joint ventures, cooperation, introduction, digestion, absorption, and innovation. From the very beginning, GAC Trumpchi positioned a high-end brand, that is, positioning high-end, quality first, and innovation-driven. These three points run through the entire GAC The development process of Qi's own brand. Therefore, I feel that for independent brands that are completely explored by themselves and developed independently, it is a very necessary period to achieve product upgrades and build new brands at this stage.
As far as GAC is concerned, it is not suitable for us to build a new brand. We must take the lead in maintaining the high-end positioning of GAC Trumpchi. Of course, with the further development of GAC in the future, when some consumers need GAC to launch more high-end, high-luxury brands and products, we will also do it.
Q: What is the overall expected sales volume of GAC Group this year?
Feng Xingya: GAC Group is made up of various investment companies, and their overall performance this year is not bad. The total amount is the sum of the sales of various OEMs. Generally speaking, the best performers are GAC Toyota and GAC Honda. I estimate that the annual growth rate of GAC Toyota should exceed 30%, and GAC Honda also has relatively good growth. In addition, GAC Mitsubishi's growth is also very good, and GAC Trumpchi should be said to be good, with a growth of less than 10% compared to last year.
GAC Fick has been affected by the general trend this year, and sales have declined. At this year's auto show, GAC Fick launched the new free light. With the development of new models, it is believed that the company will return to the growth track. On the whole, there are many bright spots in its business segments, which has driven the group's performance to achieve stable growth.
To talk about the reasons for growth, I think the core thing is the product. Because every OEM, every joint venture company, including its own brands, has launched its own very competitive (products), which is very critical. In addition, the entire service and brand image have been improving in recent years, especially the service and brand image.
If the GAC Group wants to move forward again, I think GAC Group should firstly persist in joint ventures and cooperation, resolutely support the establishment of joint ventures, develop joint ventures with foreign parties, and do their utmost to support their work.
The second is independent innovation. Through open cooperation, we can improve our independent innovation ability, cultivate our own brand, shape its brand image, and maintain good product quality. This is the fundamental reason why our Guangzhou Automobile Group can grow.
With this in mind, the situation next year should be more severe, but we still have to stick to this point, practice basic skills, stick to our bottom line, and continue to introduce new products, especially products with strong competitiveness.