Introduction

Introduction

No matter what your purpose is for attending this year-end extravaganza, it is absolutely worth taking the time to savor it.

This Monday afternoon, sitting in the office at the Halley Center in Jing'an District, Shanghai, I had a heated discussion with several colleagues about what "theme" we should use for the upcoming Guangzhou Auto Show.

"Using the phrase 'living' or 'way of life' is more fitting and is the main theme of this year's Chinese auto market."

""Ice and Fire seems quite appropriate, with leaders dominating while laggards fall into the abyss."

"How about calling it the South China Appointment? After all, it's also the so-called final battle, so let's make a good summary."

And so, everyone shared their opinions...

But for some reason, I felt that the above themes were too ambitious, lacking the appeal to draw readers in at first glance.

Soon, everyone fell into deep thought again.

In my opinion, "Instead of making macro discussions every time, it would be better to focus more. People have long been saying that oil vehicles have no chance, but what's the result?"

Precisely based on this background, I had the intention to write today's article. In the following paragraphs, I want to use the upcoming 22nd Guangzhou Auto Show, which opens early on Friday this week, to find the answer to the question.

Of course, let's also use this opportunity to fully preheat and set the tone for this extravaganza.

The Times Have Really Changed

Since we are trying to discuss whether 'oil vehicles still have a chance', we must first look at the data.

In the past October, combined with the sales results released by the China Passenger Car Association, the retail penetration rate of new energy passenger vehicles exceeded the 50% mark for the fourth consecutive month, and the wholesale penetration rate of new energy passenger vehicles exceeded the 50% mark for the first time in history.

At the same time, the year-on-year growth rate of retail sales of new energy passenger vehicles reached a staggering 55%, while the retail sales of traditional fuel vehicles declined by 16% year-on-year.

And this stark contrast has gradually become commonplace since the beginning of this year.

It is by no means blind self-satisfaction; the Chinese auto market is ushering in a "turning point" filled with value ahead of schedule. Embracing electrification has become the mainstream choice for most consumers. Under the Matthew Effect, the trend is becoming increasingly irreversible.

From this perspective, the opportunities for oil vehicles, especially traditional fuel vehicles, are indeed dwindling. This brings us back to the oft-repeated viewpoint, "The Times Have Really Changed."

As evidence from another dimension, let's focus again on this year's Guangzhou Auto Show. According to relevant statistics from the organizing committee, there are 1,171 exhibit vehicles, of which 512 are new energy vehicles.

Although they have not yet accounted for more than half in quantity, if we consider volume, popularity, and attention, the latter is undoubtedly the undisputed protagonist of this extravaganza.

For a long time, we have been willing to regard the South China market, where Guangzhou is located, as a high-quality sample with great research significance.

Because this land has a relatively mature automotive culture, sufficient economic purchasing power, and excellent automakers with a variety of offerings.

Of course, it is also a stronghold that Japanese brands cannot afford to lose.

However, even now, thorough change is inevitable. Taking the first three quarters of this year as an example, the cumulative sales of new vehicles in Guangdong Province reached 1.9234 million, with a year-on-year increase of 6.95%.

Breaking it down further, traditional fuel vehicles declined by 13.73%; new energy vehicles shone brightly, maintaining rapid growth while accounting for 53.83% of the market.

Not surprisingly, under the impact of waves of autonomous brands, Japanese brands in the South China market, and even the entire joint venture camp, cannot conceal their decline.

Faced with this situation, the view that "traditional fuel vehicles will gradually decline" is further reinforced. As time passes quickly, potential customers are constantly educated, and new energy vehicles are desperately competing internally. Except for some niche segments with special needs, their living space will continue to be squeezed.

Of course, at this Guangzhou Auto Show, I believe everyone can also personally discover that they will no longer shine in the "center stage" as they once did but instead huddle in corners.

However, ideally and objectively speaking, although the outcome facing traditional fuel vehicles is difficult to change, there is still much potential for "oil vehicles" in the Chinese auto market.

At first glance, there seems to be a grammatical error, but that's just how it is.

More bluntly, the mantle of traditional fuel vehicles is being smoothly taken over by a surge of plug-in hybrid and extended-range electric vehicles.

This year, new energy vehicles have indeed been hot, but pure electric vehicles have inevitably fallen into a growth bottleneck due to various reasons. Instead, products with both oil and electric power have been highly sought after.

In October, looking at the entire market, if we combine plug-in hybrids and extended-range electric vehicles, their share compared to pure electric vehicles has reached 43%:57%; focusing on this year's Guangzhou Auto Show, many heavyweight new cars have a considerable presence of extended-range and plug-in hybrid models; in the first three quarters of this year, the year-on-year growth rate of pure electric vehicles in the South China auto market was less than half the combined growth rate of extended-range and plug-in hybrid models.

'Oil vehicles' are not dead; they have just changed the way they harvest. And opportunities always remain for those who are prepared.

Witnessing the Ascension of a New King

'The gradual decline of traditional fuel vehicles, the rapid rise of plug-in hybrids and extended-range electric vehicles, and the slowdown in the growth of pure electric vehicles together form a barometer of the Chinese auto market.'

After writing over a thousand words, this opening sentence of this paragraph has become my heartfelt feeling. Precisely based on this background, this year's Guangzhou Auto Show actually has another main theme that cannot be missed - witnessing the ascension of a new king.

In fact, with the unwavering support of the national level, the entire market has officially embarked on the path of electrification transformation, and the previously Solidified pattern has quietly begun to loosen.

Once upon a time, Volkswagen, Toyota, and BBA were the recognized kings. They wielded great influence, enjoyed immense profits, exchanged markets with so-called technology, and held the power to define and price popular models.

And this year, we undoubtedly witnessed the ascension of a new king.

So, who is this new king? Is it BYD, whose monthly sales surpassed 500,000 units? Is it Geely, which has comprehensively rolled out its new energy offensive? Is it Chery, which has earned a fortune by going overseas through unconventional methods? Or is it the industry-recognized top players such as HarmonyOS Intelligent Connectivity, Lixiang One, and Xiaomi Cars?

Frankly speaking, everyone is a part of the answer, but as for the whole picture, I would rather cast my vote for all autonomous brands. After all, their cumulative sales share has surpassed 60% as of now.

In the past October alone, it reached a record high of 65.7%.

Whether it's mindset or efficiency, autonomous brands have undoubtedly made joint venture brands suffer. And "electrification" has given the former the sharpest spear to pierce the latter's already decaying shield.

'The Chinese auto market will definitely be ours.'

Previously, you might have questioned the above statement, thinking it was the self-satisfaction of some radicals. But after experiencing the qualitative change brought about by the quantitative change this year, I believe you will only become more determined about it.

There is no need for self-deprecation. In this new racetrack where rules and gameplay have all been iterated, autonomous brands have completely taken the initiative this time. And in almost every niche segment, they are staging plays about "overthrowing the old overlords" one after another.

At this Guangzhou Auto Show, they will surely enter Rage Mode and show off their best cards for promotion and display. On the one hand, they want to prove to the outside world that they are doing well in the final battle; on the other hand, they want to accumulate more energy for the subsequent journey internally.

Don't believe it? Then please visit the booths of each participant to see if I'm lying.

From Geely Galaxy in Hall 1.1 to the wealthy BYD that has booked the entire Hall 2.2, to AION, AION V Plus, and Trumpchi in Hall 2.2, to "The Eldest Son of the Republic" Hongqi in Hall 3.1, to Avitar, Changan, Deep Blue, Besturn, and Wuling in Hall 3.2, to the entire Great Wall in Hall 4.1, to SAIC-GM-Wuling and Chery in Hall 4.2, to "national team members" BAIC and Dongfeng in Halls 5.1 and 5.2, to the booths of various new force automakers in Halls 17.2 and 18.2...

The fierce competition among them, where they showcase everything they have and vie for attention, will far exceed your imagination.

From sedans and SUVs of various levels to MPVs, the pace at which autonomous brands introduce new models can only be described as "frantic." Besides competing in products, they are also competing in technology, energy replenishment, services, channels, marketing, and even who the founder is that stands out the most.

This makes one wonder, how will the pressure-cooker joint venture brands feel when they see the above suffocating situation? Especially when their "profit cows" are being devoured one by one by autonomous brands?

Perhaps it's still that sigh: "The Times Have Really Changed."

Of course, reading up to here, some people may still one-sidedly believe that "the rise of autonomous brands is simply due to policy wins?" And I want to say, "Even if there are factors from this aspect, policies are fair and open. Why didn't joint venture brands seize the opportunity?""Making mistakes is not terrifying; what's truly terrifying is stubbornness.

After taking advantage of the right time, geographical advantages and harmony among people are actually the key to the rise of Chinese automakers. For example, they have keenly perceived that 'oil vehicles' are not dead; they have just changed the way they harvest. They are the prepared groups mentioned earlier.

And this Guangzhou Auto Show undoubtedly provides another good observation point.

Only by Staying Can There Be a Future

Whether you admit it or not, singing low praise for joint venture vehicles has become the "political correctness" in the eyes of most readers. Another question arises: In the Chinese auto market, do you think they really have no future?

Regarding this, I would like to view it dialectically from multiple dimensions.

First, it must be acknowledged that as traditional fuel vehicles gradually decline and new energy vehicles take charge, joint venture brands have shown severe symptoms of water and soil incompatibility in multiple dimensions.

What's more fatal is the "collapse" of their image in the minds of consumers.

Slightly exaggeratedly speaking, "In the past, once someone bought a Volkswagen, Toyota, or BBA, people would often sing high praise and cast admiring glances. Now, however, doubts and even criticisms are starting to emerge, not to mention the situation of other weaker joint venture brands."

But a dead camel is still bigger than a horse.

On the one hand, we should never deny the positive role that joint venture brands have played in promoting the Chinese auto market over the years. On the other hand, we should not underestimate the determination of some automakers to admit their mistakes, turn around like an elephant, and catch up with all their strength.

In fact, just before this Guangzhou Auto Show, several impressive events occurred.

First, Dongfeng Nissan suddenly announced that it had signed a strategic cooperation agreement with Huawei, becoming the first joint venture brand to use Huawei's full-featured HarmonyOS cockpit.

Second, the domestic Audi Q6 e-tron began preheating, with the new car notably equipped with a fusion system of dual lidar and visual perception, supporting point-to-point advanced assisted driving. Although its official has not clarified who the supplier is, there is widespread speculation in the outside world that it is Huawei again.

Third, the first product of the Audi-SAIC cooperation project was unveiled. In the memories of a generation, the four-ring logo has always been the unique label of this German luxury brand. However, for the Chinese market, it officially launched a new "AUDI" logo.

I'm curious, what are your thoughts after reading the above information?

Personally, I can feel that these joint venture brands have finally figured it out, "Embracing China and domestic high-quality partners more fully will be the best shortcut to rebound from the bottom, get out of the quagmire, and make up for shortcomings."

In other words, stick to what you are good at and leave what you are not good at to professionals. Moderate collaboration is the only way to achieve a win-win situation, both morally and rationally.

On the contrary, at this Guangzhou Auto Show, according to the spoilers that have been revealed, in addition to Dongfeng Nissan and Audi in the north and south, more joint venture brands will unveil their new electrification strategies in China. And these are not just empty promises but tangible implementations, mainly focusing on intelligent cockpits, intelligent driving, and three-electric systems.

Although it remains a huge unknown and challenge whether such practices will ultimately be effective, whether they can rebuild glory in the bloody Chinese auto market, and whether they can compete on an equal footing with autonomous brands in direct confrontations, at least they are trying. It's better than just standing there and taking hits.

However, there is still a voice in the industry that believes, "Do joint venture brands have to be deeply rooted in China? Some global automakers seem to be doing quite well even if they lose this market. Don't take yourself too seriously.""And I only need to present the third-quarter financial reports of a few leading members to serve as the best rebuttal.

The sharp drop in their profits is fundamentally triggered by the fact that the days of making easy money in China are gone. The loss of this "juicy piece of meat" contribution instantly sends a wave of hunger throughout their bodies.

Moreover, it must be pointed out that for any joint venture brand, being able to gain a foothold in the most fiercely competitive niche markets will also enable them to dominate all markets. Tesla is also the best example.

In addition, it's just a matter of speed. In the future, new energy vehicles will surely sweep the globe. Smart joint venture brands understand that fighting monsters and practicing in the hardest copy can help them improve faster.

Precisely for this reason, the topic that they will undoubtedly actively showcase at this Guangzhou Auto Show is destined to be: "Only by staying can there be a future." The second half of the sentence is: "Arrogance will eventually lead to elimination.""Writing up to here, the article is gradually approaching its conclusion. Finally, I want to say, "Having been in the industry for five years, I have always felt that the greatest charm of the Chinese auto market lies in its bloody yet splendid nature. Every time it nears the end of the year, a profound summary and outlook will emerge in the city of Yangcheng.""In short, what the Times have really changed, what witnessing the ascension of a new king, and what staying means having a future, together form a dramatic portrayal of all living beings."This Guangzhou Auto Show is worth savoring in detail...