No One Cares About Hozon

06/25 2024 476

Hozon, a new energy brand that has almost disappeared from the scene in 2024.

In this era of extreme competition, you might say that Hozon has been abandoned by consumers and overwhelmed by the rolling tide of the times. However, with the support of two major shareholders, GAC Group and Zhujiang Investment Management, it has retained its main entity. Yet, you might also argue that facing the current brutal environment, Hozon is merely gathering strength, waiting for an explosive breakthrough, but from an outside perspective, it seems like that's not the case.

What path should Hozon take next? Can it come up with a reasonable and sustainable development plan? Perhaps the shareholders behind it still want to save it from distress, but looking at the current market situation without any room for maneuver, urgency and anxiety will ultimately be of no avail.

Should Hozon choose to cut its losses due to the rapid market changes or continue to struggle?

Amid this dilemma, the answer for Hozon seems simple. However, the reality is that after surviving numerous industry shakeouts, regardless of Hozon's determination, the cruelty of the reality is telling observers that Hozon, now at a crossroads, urgently needs a solution to crawl out of the mud.

In fact, starting from the second half of last year, there have been many variables regarding Hozon's future development due to frequent changes in senior management. From technological iteration, product planning, to marketing follow-up, channel optimization, and even trend judgment, Hozon has become increasingly unpredictable.

Now, aside from the occasional incidents in the entire Hozon ecosystem, some things are probably clear to everyone.

The Times Have Both Elevated and Constrained You

"Developing new energy vehicles is the inevitable path for China to transform from a large automotive country to a powerful one."

It is clear that due to such instructions from higher authorities, the booming development of the new energy industry in recent years has propelled China's automotive industry from the edge of the market to the world stage. But at the same time, we should also understand that the continuous optimization of the market is the result of intense competition within the industry.

Before Hozon fell into a survival crisis, China's new energy vehicle market had already eliminated too many speculators, aggressive players, or self-righteous individuals. Among them, Weima, Skywell, Aichi, and HiPhi, these new forces that successfully survived two rounds of reshuffles, ultimately could not escape the turbulence of the market.

As for the reasons, many people attribute it to the fact that as consumer trends tend to be singular, the Chinese automotive market cannot accommodate many new brands; when the criteria for evaluating a car are aligned solely with the terminal price, no one needs products with unclear labels.

The birth of co creation has a specific historical background, which always means that every step of co creation will appear slightly immature when expanding territory.

In the early stages of industrial development, time can provide some space for co creation to find some direction through trial and error. As for feasibility, for Hechuang, perhaps it is this loose development model that has prevented it from reaching the industry's right track, gradually fading its color in the rapidly changing era.

As is well known, the predecessor of Hechuang was GAC NIO, a joint venture between GAC Group and NIO. In order to promote the rapid development of the new company, GAC also hired Liao Bing, a veteran in the automotive industry with over 25 years of experience, as the CEO.

But whether the market can give recognition really depends on who has a strong foundation or how experienced the leaders are?

As an alternative to GAC and NIO's respective development of new energy, GAC NIO quickly took advantage of the situation and quickly produced new cars available for sale. However, due to the lack of obvious technological advantages and brand uniqueness in the overall planning, and the overly traditional development strategy, according to data from the China Association of Automobile Manufacturers, in 2020, the Hechuang 007 only sold 659 units. By 2021, sales had further declined, with a cumulative sales volume of only 306 units for the whole year.

In that year, it was said that GAC Weilai had completed capital increase and share expansion, and introduced the Pearl River Investment Management Group, a cross industry strategic partner, because the original shareholders had no energy to separate from their new energy business, Co creation had to enter the queue of "real estate enterprise car building". But it is obvious that as the new energy market is further stimulated, Hechuang is just in a hurry.

Thanks to the kindness of GAC, under a series of new plans, Hechuang has acquired a 49% stake in the production base of GAC Passenger Cars in Hangzhou, while using the resources of GAC Aion to create the small explosive product Z03. It can be said that starting from the second half of 2021, the versatile co creation team has finally gained some vitality.

To be honest, in the past three years, the inherent pattern of China's automotive market has long been overturned by the rapidly expanding new energy industry. During this process, most newcomers have gained good development opportunities. As China's industrial chain continues to improve, the small success of Hechuang cannot be achieved without the assistance of the overall environment.

For a continuous period of time, the monthly sales of over 3000 vehicles surprised Hechuang. The surprise is not only that the Z03, which has changed from Aion Y, can stand out in the market, but also that it has opened up the narrow path of "real estate companies making cars". After all, who would have thought that the co creation, which originally had a somewhat "abandoned child" meaning of NIO, could be supported.

Just, the good times don't last long. Looking back, the diversified development of the industry in 2022 seems to have become a flash in the pan.

Apart from co creation, a large number of second and third tier new forces have overestimated the acceptance of new things by Chinese consumers. The short-term activity is not enough to support the healthy operation of emerging car companies in the future. Lack of potential customers, products, channels, and even money are not simply the crux that can be solved by selling a good car.

After hard work, there is an urgent need for new students

What exactly is the problem with co creation? Looking at it now, it seems that it's just that the management is unwilling to spend money to promote brand operations. But once the timeline of the past 5 years is sorted out, in fact, too many events have given us hints in advance.

From beginning to end, compared to internet famous car companies such as Weixiaoli, Hechuang is not an independent new force brand. The technology is backed by GAC, and the resources are backed by the Pearl River Investment Management. A traditional car company and a typical real estate company, no matter how many chemical reactions occur between the two, cannot do without the thinking mode of traditional business people.

The pursuit of cost minimization has kept Hechuang's technological iteration constantly circling in GAC's technological fish pond, unable to create brand characteristics or widen the gap with GAC Aion; Adhering to the real estate thinking, the channel construction and energy supplement construction of Co creation can not jump out of its own industrial circle to a large extent, that is, in most cases, it can only find a way out from the resources held by the Pearl River Investment Management.

Perhaps in terms of marketing, after Liao Bing left, Yang Ying, who took on the mission of his predecessors, had the ability to find a very interesting development path for Hechuang, that is, to use the radiation of the electronic sports industry in the hands of the capital to expand the brand's foundation. Especially with the well-known EDG esports club in the industry as a bargaining chip, the side of co creation that pleases Generation Z has been vividly demonstrated.

However, although we have our own research institute, Hechuang has been unable to provide us with products that can handle high traffic of EDG for a long time.

The 007, Z03, and A06 models either have outdated products, cannot remove the label of ride hailing, do not have sustainable combat effectiveness, or lack technology labels or user thinking comparable to "Weixiaoli". And when a large number of potential users are taken away by competitors, these objective factors further constrain the development of Hechuang.

To be honest, from the perspective of the capital, at the beginning of last year, when GAC Group and GAC Aion increased their capital to Hechuang Automobile by 107 million yuan and 493 million yuan respectively according to their shareholding ratios of 4.46% and 20.54%, and other shareholders such as Zhuhai Investment Intelligence also increased their capital according to their shareholding ratios, I believe that no one was willing to lend a helping hand to Hechuang with a mentality of allowing it to grow wildly.

In the later stage, with the "Resident Assistance Plan" as the anchor point, the extraordinary method of "RV Double Sales" was launched to solve the survival problem of Hechuang, which also reflects everyone's determination to bring hope to Hechuang.

It is an undeniable fact that Hechuang really wants to change the current situation through its own efforts. Quickly, while saving herself, Yang Ying gave way to Du Lan, who had crossed over from iFlytek, in order to change her playing style again. Hechuang only hopes that she can use the brand's last pawn - V09, to enter the pure electric MPV market and "lead" her competitors.

Is the market potential for MPVs significant, unlike sedans and SUVs? The answer given by Hechuang, who entered the market with V09, is clearly affirmative. However, the changes in the Chinese car market are so unreasonable. There are only two possible outcomes for betting on segmented markets.

With its first mover advantage, it soars to the sky, just like when Great Wall launched Tank 300 to revitalize the WEY brand; Another approach, like Hechuang, which focuses on the pure electric MPV market, is to make every effort but with little success.

On the road to success, it has always been feasible to layout the market in a different way and innovate new ideas. Since its establishment, Hechuang naturally has the capital to practice everything it wants to do. The reason why we have come to this day is due to the fact that this era has been pushed forward by too many people, and we have not been able to leave enough room for trial and error for Hechuang.

When GAC Group will try to pave the way for Ai'an today in 2024, I would think that the current bad worry is not that Hechuang is not working hard enough, nor that the Pearl River Investment Management has no intention of its future. Everything lies in the fact that market potential has not been tapped as expected, and consumer trends are becoming more consistent due to the constraints of top companies.

I don't know when the internal competition in the Chinese car market will end, but I hope Hechuang can return to the right track as soon as possible.

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