In the automotive market, the multi-brand strategy has almost become a common choice for many well-known automakers. It seems that having multiple brands has become the norm for automakers. However, recently, there have been voices against the multi-brand strategy, and some media even believe that the era of 'more children fighting better' is over. So, how should we view this matter?

I. Is the era of multi-brand automobiles coming to an end?

According to China News Weekly, facing the changes and competitive pressures in the automotive market, many automakers are adjusting their businesses to reduce costs, with the aim of refocusing on core businesses and enhancing competitiveness.

Recently, SAIC Motor's high-end new energy brand, Feifan Auto, after three years of independent operation, decided to reintegrate into the Roewe brand due to poor market performance.

Geely Automobile also announced in October that Geometry would be officially integrated into Yinhe, and Geely New Energy will focus on building the Yinhe brand, with Geometry becoming a series of smart, premium compact cars under Yinhe.

Geely's strategic adjustment aligns with the "Taizhou Declaration" released on September 20. Li Shufu, Chairman of Geely Holding Group, said that the group would shift from strategic expansion to strategic focus and integration, closing down or transforming some businesses, avoiding blind expansion, promoting in-depth integration and efficient fusion of internal resources, further clarifying the positioning of each brand, streamlining equity relationships, reducing conflicts of interest and duplicate investments, and improving resource utilization efficiency.

During the initial stage of Chinese brands' full-scale development towards new energy transformation, to quickly capture the market and target the high-end segment, automakers generally adhered to a multi-brand strategy and emphasized that competition among multiple brands would drive development. However, as market competition intensifies, investments increase, and profit margins become increasingly imbalanced, automakers are starting to show a trend of strategic contraction, once again changing the strategic mindset of 'more children fighting better' and even being ridiculed by many as the automotive development philosophy of 'more children, more blessings'.

Before Geely and SAIC Motor's strategic contraction, Changan Automobile and Great Wall Motor also integrated their respective brands.

According to the China Business Herald, with the potential further shrinkage of the gasoline vehicle market, the survival and development of joint venture brands have attracted significant market attention. Data from the Passenger Car Association shows that in October, mainstream joint venture brands sold 570,000 vehicles, a year-on-year decrease of 17% and a month-on-month increase of 8%. Additionally, in terms of new energy vehicles, wholesale data from the Passenger Car Association indicates that the penetration rate of new energy vehicles among mainstream joint venture brands is only 6%, while the retail share of joint venture brands in new energy vehicles is 3.1%, a year-on-year decrease of 2.2 percentage points.

However, not all automakers are making this choice. NIO, a well-known new force in carmaking, is going against the grain. Recently, NIO held its third-quarter earnings call. During the call, Li Bin, Chairman of NIO, said that using two or three brands to target different user groups has proven to be a successful strategy. For example, the new NIO brand LeDao's largest user base currently comes from Tesla Model 3 owners. Regarding the impact of LeDao on NIO's main brand users, internal data shows that about 2% of users would not buy NIO due to LeDao, so the incremental gain far outweighs the loss.

II. Does the car development philosophy of 'more children, more blessings' not work anymore?

In the development of the automotive industry, the multi-brand strategy was once an important part of it. However, recently, many automotive brands have begun large-scale integration of their own brands. What are the reasons behind this?

Firstly, why is the multi-brand strategy popular in the automotive industry? Throughout the development of the automotive industry, the multi-brand strategy has been an important means for many automotive groups to build market competitiveness. Taking General Motors as an example, its brands such as Chevrolet, Buick, and Cadillac each have their unique characteristics. Chevrolet targets the mass consumer market, attracting a broad range of ordinary consumers with cost-effective models that cover various types, from family sedans to light pickup trucks, meeting the needs of different families and businesses. Buick is positioned in the mid-to-high-end market, offering advantages in interior craftsmanship and driving comfort, suitable for consumers who seek a certain level of vehicle quality without wanting to pay exorbitant prices. Cadillac, as General Motors' luxury brand, targets high-end consumers with its high-end technology, luxurious interiors, and powerful performance, becoming a symbol of status and position.

The same is true for the Volkswagen Group. Its Lamborghini is a representative of supercars, with its unique design and ultimate performance satisfying supercar enthusiasts' desire for speed and passion. Bentley, with its handcrafted luxurious interiors and top-tier driving experience, represents the world's top luxury cars, mainly targeting super-rich individuals who pursue ultimate luxury and personalized customization. Porsche stands out in the high-performance sports car segment, and its SUV models also attract many high-end consumers with their excellent handling performance and stylish appearance. Audi is a combination of technology and luxury, occupying a place in the luxury car market with advanced technology and superb craftsmanship. The Volkswagen brand, on the other hand, focuses on cost-effective family cars and practical vehicles, serving the general public. This multi-brand strategy can effectively serve different types of consumers, forming comprehensive market competitiveness. Through the positioning of different brands, automotive groups can cover all consumer levels from low-end to high-end, leveraging the unique characteristics of each brand to attract consumers with different needs and expand market share.

Secondly, how did Chinese automakers enter the multi-brand arena? Looking back at the local automotive industry, 2016 marked a critical starting point for the multi-brand strategy. The partnership between Geely and Volvo gave birth to Lynk & Co., a hybrid "new aristocrat" that drew on the technological essence of both parties, blending Nordic minimalist design with Chinese practical aesthetics, entering the consumer segment that is young, trendy, and quality-conscious with intelligent connectivity and high-performance chassis tuning. The launch of Lynk & Co.'s first model, the 01, garnered significant industry attention. At the same time, Great Wall Motor launched its premium SUV brand WEY, aiming to compete in the high-end market with superior configurations, Chinese-style luxury interiors, and solid craftsmanship. Many models instantly boosted the brand's reputation, breaking the mold for indigenous high-end vehicles.

After 2018, the wave of multi-branding surged through the entire industry. Great Wall Motor's Ora brand focused on women and urban commuting, using compact, retro-styled electric vehicles with suitable range to tap into a unique "blue ocean" market. GAC Aion combined resources from multiple parties in the new energy sector, integrating technological and manufacturing advantages to delve into travel services and personalized customization. Geely's Geometry brand used simple geometric design and efficient electric powertrains to pave the way for economical electric travel. Other new brands such as GAC Aion, Geely Geometry, and Dongfeng Hoval were also launched during this period. At that time, the multi-brand strategy seemed to be the trend for Chinese automotive enterprises, and automakers that did not adopt a multi-brand strategy risked being left behind. The launch of these new brands reflected Chinese automakers' continuous exploration of market segmentation, brand image enhancement, and satisfaction of diverse consumer needs. At that time, new brands sprang up like mushrooms after rain, and automakers that did not deploy a multi-brand strategy felt like they were on the fringes of the wave, unable to keep up with the times.

Thirdly, why is the multi-brand strategy no longer working? Although the multi-brand strategy may seem attractive, it is not without challenges. The first issue is the "allocation dilemma" of research and development resources. Automakers have limited funds, research personnel, and time and energy. Under a multi-brand structure, each brand strives for new product launches and technological upgrades, similar to hungry chicks vying for food. Core new energy research areas such as battery, electric drive, and vehicle control systems, intelligent driving assistance system development, and efficient upgrades to traditional internal combustion engines all require significant investments. With dispersed resources, each brand receives insufficient allocation, leading to prolonged new product development cycles, delayed technological iterations, increased product homogeneity risks, and difficulty in maintaining high-quality standards due to diluted investments. Some new brands have experienced frequent software malfunctions and exaggerated battery range claims, damaging brand credibility.

At the brand operation level, it is like walking a tightrope, fraught with danger. Each brand's positioning, target customer groups, and marketing strategies should be distinct, but in practice, they can easily become blurred. Within the same group, dealers often fall into a quagmire of vicious competition to capture market share, leading to terminal discounts, customer poaching, damaged brand images, and significant profit losses. Additionally, online promotions can clash, canceling out each other's promotional efforts and lacking synergistic force. Once coordination becomes imbalanced, a trampling effect can erupt internally, with high-end brands being dragged down by low-end ones, and nascent brands struggling to survive amidst competition from their own siblings.

Fourthly, is brand integration a good solution to save internal friction? Faced with the "chaos" of multi-branding, brand integration has quietly become an automaker's "self-rescue" recipe. Integration is like a mortise and tenon joint, precisely fitting to eliminate intra-industry competition and internal friction. By sorting through each brand's product lines, consolidating sedans, SUVs, MPVs, and different price and performance tiers, high-end brands can focus on cutting-edge technology and luxurious experiences, mid-range brands can emphasize balanced configurations and reliable quality, and low-end brands can solidify their cost-effective foundations, achieving complementary positioning and a well-coordinated product mix. Sales network integration serves as the lifeline, sharing exhibition halls and after-sales resources to expand coverage. In remote areas where a single brand may struggle to support a dealership, integration allows multiple brands to take root together, reducing operational costs while reaching more potential customers.

Economies of scale shine during integration, with bulk purchasing of components, unified research and development processes, and consolidated logistics and distribution leading to layer upon layer of cost reductions. Technological research and development can concentrate efforts, spreading the cost of new energy batteries over a larger scale, and developing a unified intelligent cockpit interaction system adaptable to multiple brands, avoiding redundant work. In this way, every dollar invested is converted into enhanced product competitiveness and affordable pricing advantages, giving automakers an edge in the brutal price and technology wars, continuously reducing costs and increasing efficiency, and reshaping profit models and market resilience.

In fact, there is no absolute right answer to whether to stick with the multi-brand strategy or shift to brand integration. As Sun Tzu's The Art of War states, "There are no constant conditions in warfare, just as water has no constant shape." The competitive landscape in the automotive industry is also constantly changing. For automakers, the key is to flexibly adjust their brand strategies based on their actual situation and changes in the external market environment to remain invincible in the fierce market competition.