Picture source: Dugou

Photographed at the Shanghai Auto Show in April 2023

When the company name is changed to match the brand name, the importance of Trumpchi has significantly increased, but so has the pressure.

Recently, Guangzhou Automobile Passenger Vehicle Co., Ltd. underwent a business change, and its corporate name was changed to 'Guangzhou Automobile Trumpchi Automobile Co., Ltd.' Prior to this, Guangzhou Automobile Passenger Vehicle mainly produced models under the Trumpchi brand name. Regarding the name change, the company responded that this move aimed to align more closely with the brand name.

This is somewhat expected, as Zeng Qinghong, Chairman of Guangzhou Automobile Group, once described Trumpchi as the 'first biological son' of Guangzhou Automobile, an independent brand built with the full efforts of Guangzhou Automobile Group, carrying the hope of the group's future sustainable development. After the name change, its importance within the group will be more prominent, making it clear to all that Trumpchi has become the sole representative of Guangzhou Automobile Passenger Vehicle.

However, this also places a heavier burden on Trumpchi. From January to July this year, Trumpchi's performance was not outstanding, with cumulative sales reaching 214,700 units, a year-on-year decline of 2.9%.

Moreover, breaking down Trumpchi's sales composition reveals that it still relies heavily on a single product category and faces difficulties in its transition to electrification. In today's fiercely competitive market environment, limping forward is not a good thing.

After 'Guangzhou Automobile Passenger Vehicle' becomes history, can Trumpchi support Guangzhou Automobile's independent business?

1

Difficult to resolve the 'single model dependency' problem●

According to records, Guangzhou Automobile Passenger Vehicle Co., Ltd. is a wholly-owned subsidiary established by Guangzhou Automobile Group on July 21, 2008, primarily engaged in the production and sale of Trumpchi-branded vehicles.

From its inception, Guangzhou Automobile Group has placed high hopes on the Trumpchi brand. At the offline ceremony for the first Trumpchi produced by Guangzhou Automobile Passenger Vehicle 14 years ago, Zeng Qinghong stated, 'Trumpchi will become a leader among independent brands, and Guangzhou Automobile Passenger Vehicle aims to be the best independent brand in China.'

After years of development, although Trumpchi cannot yet be considered a 'leader among independent brands,' it has achieved remarkable results as a 'dark horse.' For example, the first passenger car rolled off the production line in September 2010, and sales reached 85,000 units in 2013. Then, in 2017, annual sales exceeded 500,000 units, peaking at 535,200 units in 2018.

However, 'CarVisibility' has found that throughout Trumpchi's development, it has struggled to shake off its reliance on a single model or a single market segment, including previous SUV models like the GS4 and current MPV models.

First, let's talk about Trumpchi's flagship model, the GS4. In 2015, the launch of the GS4 propelled Trumpchi into the mainstream of independent brands, achieving cumulative production and sales of over one million units in just 41 months, making it the fastest Chinese brand SUV to reach this milestone.

At that time, Trumpchi GS4 sales could even rival those of the 'legendary' Haval H6, making it an absolute bestseller and the backbone of Trumpchi. In 2017, Trumpchi's total sales were 508,600 units, with the GS4 accounting for over 66% of these sales.

Now, let's look at the current sales leader, the MPV models. According to Autohome data, in the first half of this year, sales of the Trumpchi M8 and Trumpchi M6 were 30,609 and 22,866 units, respectively, accounting for nearly 40% of Trumpchi's total sales for the period, while the remaining eight models accounted for just over 60%.

While having popular or star models is undoubtedly a good thing, it undeniably carries hidden risks. For example, in previous years, the more Trumpchi GS4 sold, the more problems emerged.

Due to the high number of complaints about this model during its most popular three to four years, it frequently ranked high on SUV complaint lists, directly impacting its reputation and gradually causing Trumpchi sales to decline. Sales fell to 324,200 units in 2021 and 362,500 units in 2022, significantly lower than the peak in 2018.

Now, the MPV models Trumpchi M8 and Trumpchi M6, on which Trumpchi relies, cannot be guaranteed to remain popular forever. First, while the MPV market is growing, its overall size is still far smaller than that of SUVs and sedans. Second, MPV market competition is becoming increasingly fierce, with strong competitors such as BYD's Denza, ZEEKR, Xpeng, and Voyah among independent brands. If Trumpchi relies solely on MPVs for growth, there may be risks.

Regardless of the industry, limping forward carries hidden concerns, and given that Trumpchi's goal is to become a leader among independent brands, it should strive for balanced development across all segments.

2

Bumpy road to electrification transformation●

Currently, like most brands, Trumpchi is focusing on electrification and intelligent transformation. However, Trumpchi's journey on the new energy path has not been smooth. Firstly, it 'got up early but arrived late,' and secondly, its new energy models have not gained significant market traction.

It is understood that as early as the end of 2015, Guangzhou Automobile Passenger Vehicle Co., Ltd. established a new energy subsidiary. At the Beijing Auto Show the following year, Trumpchi unveiled several new energy models, including the GS5 super, GS4 EV, GA3S PHEV, and EV-coupe. Subsequently, the GA6 PHEV and pure electric GE3 models were also launched.

It was expected that with the support of so many products, Trumpchi would quickly establish a foothold in the new energy market. However, the subsequent market performance of these models was mediocre. For example, sales of the pure electric compact SUV Trumpchi GE3, which debuted in 2017, were only 400-500 units per month in the first half of 2018, according to the China Passenger Car Association (CPCA).

Later, Guangzhou Automobile focused its new energy development efforts on the all-new brand AION, which was launched in 2018. At that time, AION was still part of Guangzhou Automobile Passenger Vehicle and belonged to the Trumpchi brand, so Trumpchi also benefited to some extent. Unfortunately, AION eventually embarked on a path of independent operation in 2020, leaving Trumpchi to continue its journey alone.

Last May, Trumpchi introduced a new card in the form of the MPV model Trumpchi E9. Feng Xingya, General Manager of Guangzhou Automobile Group, described the E9 as a strategic and iconic product, marking a new era in Trumpchi's electrification transformation. Then, in October and November last year, Trumpchi's new energy full-size travel SUV ES9 and mid-size MPV E8 were also launched.

Unfortunately, these three models failed to achieve the desired results. According to Autohome data, Trumpchi E8 sales in the first half of this year were only 13,900 units, with an average monthly sales volume of around 2,323 units. Sales of the Trumpchi E9 and ES9 were even lower, with cumulative sales of 5,941 and 3,817 units, respectively, in the first half of the year, averaging just a few hundred units per month.

This performance needs improvement in today's domestic new energy vehicle market. It is worth noting that sales of the Denza D9 DM-i exceeded 50,000 units in the first half of the year, and even Voyah, which has fallen behind in the new force sector, sold 15,500 units of its MPV model Dreamer in the same period.

On its transformation path, Trumpchi has faced numerous obstacles, and if it does not make significant progress soon, its position may become even more awkward. Fortunately, Trumpchi has taken a new step forward by announcing in April the launch of EV+, a worry-free solution for customers across the entire life cycle and scenarios in the new energy era, and by deepening its comprehensive cooperation with Huawei.

The introduction of the EV+ solution further clarifies Trumpchi's future development goals in new energy, and deepening cooperation with Huawei will make Trumpchi the first brand in the automotive, SUV, and MPV segments to adopt new-generation Huawei intelligent technologies such as Kunlun Intelligent Driving and HarmonyOS Cabin.

Whether this move will enable Trumpchi to leap forward in the new energy market remains to be seen with time.

3

Will 'siblings' become competitors?●

Guangzhou Automobile Group has stated that facing challenges such as slow electrification transformation, limited international scale, and slow growth in new segments, the group will strive to achieve a 10% increase in sales and surpass 1 million units in independent brand sales. Among them, as the leading independent brand of Guangzhou Automobile Group, Trumpchi bears significant responsibilities.

Moreover, the recent change of corporate name from 'Guangzhou Automobile Passenger Vehicle Co., Ltd.' to 'Guangzhou Automobile Trumpchi Automobile Co., Ltd.' indicates that the Trumpchi brand will be the focus of Guangzhou Automobile Group's development for some time to come. However, in addition to competing with other brands, how Trumpchi will face the challenge from its sibling brand AION is a topic of public concern.

It is rumored that AION will no longer focus solely on pure electric vehicles and plans to enter the plug-in hybrid segment. In the second half of this year, AION will launch its first large 6-seater plug-in hybrid SUV model, code-named AH8. Earlier, Gu Huinan, General Manager of AION, stated that the lack of fast-growing plug-in hybrid models in AION's product line has to some extent affected its sales.

While this is undoubtedly a good measure for AION to expand its market, it means an additional competitive rival for Trumpchi.

After all, according to previous positioning, Trumpchi mainly focused on 'XEV (Hybridization) + ICV (Intelligent Connected Vehicle),' while AION focused on 'EV (Electrification) + ICV.' Now, this distinction has been broken. Moreover, the ES9, launched by Trumpchi last year, is a mid-to-large-sized plug-in hybrid SUV, which means AION is now directly competing in Trumpchi's product territory.

How Trumpchi and AION can differentiate their products in the future is a question that Guangzhou Automobile Group needs to consider. Regarding this, Gu Huinan has stated that there will be ways to achieve synergy while also maintaining differentiated competition. It remains to be seen how the group will approach this.

According to Guangzhou Automobile Group's latest July production and sales report, the former 'Guangzhou Automobile Passenger Vehicle Co., Ltd.' has been replaced by 'Guangzhou Automobile Trumpchi Automobile Co., Ltd.,' underscoring its status and pressure. Trumpchi must strive to emerge from adversity and fully support Guangzhou Automobile Group's expectations.

Author | Li Li

Source | CarVisibility

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