Rebirth 99 to become a car giant

As the largest private industrial enterprise in China, and with two core publicity sites, Autohome and Weibo, Cao Yang can naturally obtain information as quickly as possible about the trends in the automobile market and the dynamics of various car companies.

After Autohome conducted a special report on "sister cars" and learned about some developments of more car companies in this area, Yu Yu immediately took the initiative to report to Cao Yang.

On the one hand, I want to share the industry trends with Cao Yang, and on the other hand, I want to explain the impact of this change on China's automobile industry.

"Mr. Cao, now every joint venture car company in the automobile market intends to launch more 'sister cars'. Companies such as Volkswagen, Toyota, Honda, and Hyundai are already taking action."

"We organized specialized personnel to conduct analysis and discussion, and felt that this direction may be an important means for joint venture car companies in the Chinese market in the next five years."

“Due to my country’s unique policies and market, many joint venture brands have two joint ventures in the country!”

"After a model is introduced into the country, no matter which company produces it, the result will inevitably cause dissatisfaction from the other company. If two completely different models are developed, more time and technology will be needed."

"The emergence of 'sister cars' can solve this problem very well."

"This will not only better balance the relationship and interests of the two joint ventures, achieve win-win and common development for both parties, but most importantly, it can save costs."

"At the beginning, everyone may have only considered the reduction in development costs, but after a special investigation, we felt that the cost-saving effect of the 'sister car' should not be underestimated."

"For example, if the annual production of 300,000 vehicles is divided into two independent models, then each car can only share the production capacity of 150,000 vehicles, which means that we can only negotiate prices with parts suppliers on a scale of 150,000 vehicles respectively. ."

"And if we develop sister models with the same platform, most of the parts will be common, and we can negotiate prices on a scale of 300,000 units, and the procurement cost will be reduced a lot."

"And when different models are derived from the same platform, details can be adjusted for different market segments."

"For example, if one is more stable and the other is younger, and one is more technological and the other is warmer, we can work together to capture more market share."

"Of course, as the saying goes, 'with joy comes sorrow'. 'Sister cars' have many advantages, but they are certainly also a double-edged sword. If used well, benefits can be maximized, but if used improperly, it will cause trouble." 'It's like shooting yourself in the foot' and putting yourself in an embarrassing position."

Yu Yu wanted to come here specifically to report to Cao Yang, so he naturally made full preparations.

So when it comes to this point of view, it is also clear and logical.

Cao Yang is naturally quite familiar with the situation of "sister cars". After all, later generations of Volkswagen, Toyota, and Honda have mastered this routine very well.

However, he really has not studied the source of this matter.

Now that Yu Yu came here to report this matter, he couldn't help but ask a few more questions.

"Volkswagen was probably the first to start developing 'sister cars'. Was there any special background that triggered them to do this?"

As soon as Cao Yang asked this question, Yu Yu couldn't help but smile.

Obviously, this problem was one that she had anticipated a long time ago.

When reporting to the boss, Yu Yu will prepare a Q\u0026A in advance.

As long as the questions you are asked are prepared in advance, you will definitely be able to get a very fast and excellent answer.

This is very beneficial for improving your impression score in front of leaders.

"Mr. Cao, when it comes to this topic, there really is an episode."

“In 1999, Modu Volkswagen introduced the fifth-generation Passat and named it Passat. When it was time to upgrade, Volkswagen unexpectedly transferred the production rights of this car to Spring City Volkswagen, which made Modu Volkswagen very embarrassed. "

"This car was considered a star model of Volkswagen at the time. It has been in production for more than five years and has basically become stable. I didn't expect that when it was time to upgrade, it would be handed over to others."

"But Volkswagen controls the technology and develops all the models. They still have a relatively strong say in Volkswagen, so Volkswagen has nothing to do."

"But it doesn't want to give up this model, so what should it do?"

"So Modu Volkswagen developed a special car for China based on the Passat, which is the predecessor of the Volkswagen Magotan - the Passat Lingyu."

"In order to prevent the cars produced by Spring City Volkswagen from using the Passat name, Modu Volkswagen also protested to the Volkswagen Group. In the end, the sixth-generation Passat produced by Spring City Volkswagen was renamed Magotan."

"Although Magotan and Passat have completely different names, the two cars are essentially the same, so they form a two-car strategy in the market."

"Coincidentally, the Lavida of Modu Volkswagen and the Bora of Spring City Volkswagen are also 'sister cars'. Volkswagen has obviously tried this strategy and become more active."

When Yu Yu explained this, Cao Yang immediately understood the background.

To put it bluntly, this is caused by China's special policies.

If an automobile giant has two joint ventures in China, everyone will naturally rush to grab the models.

In order to balance the needs of the two joint venture car companies, "sister cars" came into being.

"According to the rules of doing business, when launching a product, you should try to avoid hedging with existing products on the market, otherwise it will have a negative impact on the sales of existing products."

"If you want to launch a new product, you should widen the gap with existing products in terms of positioning and other aspects, so as to avoid internal fighting."

"But why do joint venture brands like Volkswagen do the opposite?"

Cao Yang couldn't help but get interested in taking the exam and wanted to see how Yu Yu answered this question.

"In fact, fundamentally speaking, it is still because of profit."

"The fundamental purpose of doing business is actually to reduce costs and increase profits."

"On the surface, the two-vehicle strategy is indeed engaging in 'internal competition,' but from another perspective, they actually occupy more market share in this way and gain market pricing power."

"Furthermore, both North and South Volkswagen are domestic joint ventures of Volkswagen. They are essentially the same company. After they develop a model, they will produce it through the other company's platform. They can make slight adjustments to the exterior design style to create By producing two styles of models, we can attract more different consumers in the segmented fields, and the market share will be even higher."

"China's market share is so large that it is difficult for a single car company to operate both the northern and southern markets well. However, if the two car companies operate together and adjust their styles for different markets, they can achieve one car, It’s a situation where two families eat.”

“This can reduce both R\u0026D costs and production costs, which is the best of both worlds for car companies.”

"Part of the reason for even launching sister versions of popular cars is to promote healthy competition between the two joint venture car companies and avoid the inertia caused by one company having its own exclusive hot car."

The question asked by Cao Yang was also included in the list of questions Yuyu had prepared in advance.

So she answered easily.

Cao Yang also agreed with Yu Yu's answer.

This basically clarifies the increasing problems of "sister cars" in the Chinese market.

At this time, it is natural to consider what impact this approach will have on Nanshan Group.

"Do you think it will be feasible for us to launch some sister cars to Jaguar Land Rover and Xingchen Motors?"

Since the "sister car" strategy has been proven successful by history, Cao Yang will naturally not refuse.

Nanshan Group now has three luxury brands, Xingchen Motors and Jaguar Land Rover, so how to fully utilize and integrate resources is an issue that needs to be carefully considered.

Otherwise, other car companies will be the first to take the lead, and the competitive pressure will be even greater.

"Mr. Cao, I think it is completely feasible!"

"Xingchen Automobile's Zangwang and Xingtu can definitely consider launching it on the Land Rover brand."

"As for Ziweixing and Xingkong, we can consider launching them under the Jaguar brand."

"Even now that the SUV market in China is so hot, we can consider letting Jaguar, which has never produced an SUV model, launch one or two SUV models to test the waters."

"If it succeeds, it can greatly increase Jaguar's sales in China and even the global automobile market in a very short period of time."

Yu Yu boldly put forward his own plan.

I have to say that her plan still has merit.

In particular, it is proposed that Jaguar launch its own SUV model, which is an idea that most people would never think of.

After all, the two brands Jaguar and Land Rover have always been positioned as one making cars and the other specializing in off-road vehicles.

Now that people who make cars are also asked to make SUVs, a group of people will really subconsciously ignore the possibility.

"I'll ask Zeng Tingting and the others to plan carefully later and develop Jaguar's SUV model first."

"In the future, the next-generation replacement models of Land Rover and Xingchen Motors will be produced on the same platform as much as possible."

"This will not only significantly reduce development costs, but also make our supply chain more competitive."

Taking advantage of the opportunity of the same platform, successfully kicking out a large number of European and American parts companies in the original Jaguar Land Rover supply system is what Cao Yang is planning to do.

Obviously Nanshan Group can produce it itself, or it can find a more suitable supplier in China, so there is no need to hand over the order to the parts giant.

Even taking this opportunity, in the future, more Jaguar Land Rover products will be produced in the Magic City factory, and then concentrated on exporting to the world, slowly draining the power of Jaguar Land Rover headquarters. This is also a strategy of Cao Yang.

Only by transferring all R\u0026D and production capabilities to China can Xingchen Automobile complete complete control of Jaguar Land Rover.

Even if the new president disobeys him, Cao Yang will not worry that Jaguar Land Rover will escape his control.

The worst case scenario is that everything will be broken and the group of people who want to take advantage of the Nanshan Group will end up in a doomed situation.

…

Cao Yang will pay attention to the "sister car" phenomenon of various joint venture car companies, and China's other independent brands will naturally also think about the impact this phenomenon will have on themselves.

Among them, Chery is undergoing a change internally.

As the leading company of its own brands, Chery Automobile is naturally considering how to maintain its advantageous position in the face of the ever-expanding market.

"Lao Zhang, your research institute needs to move faster."

"Now Volkswagen and Toyota are developing 'sister cars' in China, and there are even more other car companies doing the same."

"Under this situation, if we move slowly, we will probably be taken advantage of by competitors such as Geely and Great Wall."

"So our 'Riich' brand high-end models must become bigger and stronger as soon as possible, so that everyone starts to accept our multi-brand strategy."

"Having more children will lead to more fights. We have to enrich Chery's product line as much as possible, but how to control development costs is also a relatively important issue."

Yin Chuan began to think about Chery Automobile's future development path.

However, if Cao Yang saw Chery's layout here, he would definitely have some ideas and suggestions.

It's not impossible to have dual brands, but high-end models are not that good.

The most important thing is that if you really build a high-end brand, do it well.

Don't say this is a high-end brand while preparing to launch some models with very low starting prices.

How is it possible to successfully develop a new brand like this?

Do you really think consumers are so easy to fool?

At the same price and with similar configurations, most Chinese consumers will still choose models from joint venture brands such as Volkswagen and Toyota.

There is no way to deny this objective fact.

At least in the next ten years, it will not be easy to change this situation.

Unless your model has a higher positioning and uses dimensionality reduction to compete with others, there is still hope for an even tie.

International automobile giants have accumulated technological and brand advantages for so many years. If you want to surpass them, it is not impossible, but it will definitely take a certain amount of time to accumulate.

Chery Automobile's multi-brand strategy is not wrong in itself.

But the positioning is not clear enough and the market layout is confusing. It will definitely be difficult to succeed in the end.

Even because of these reasons, Chery Automobile's position as the number one sales brand of its own brand cannot be maintained.

"No problem, we will soon launch two SUV models and two sedans based on the Riich brand."

"Consumers will have more choices when buying Chery cars."

As the dean of Chery Automobile Research Institute, Zhang Wuchao naturally supports the company's multi-brand strategy.

Because this means that the institute can obtain more resources.

This is definitely a good thing.

"In the future, our Ruiqi brand can continue to use Nanshan Engine products, and Chery brand models must first try our own engine technology."

"At the same time, the Riich brand's car logo should also be distinguished from the Chery brand, so that everyone can feel the influence of an independent brand."

Yin Chuan obviously still attaches great importance to the multi-brand strategy of "having more children will lead to more fights".

At the same time, Chery Automobile has never given up on developing its own engines.

Even if the engine currently developed by Chery Automobile itself has no particularly big advantage in terms of overall cost, it also has no advantage in terms of technology. He is willing to continue trying.

Because he felt that if everyone was using Nanshan Engine products, it would be difficult for Chery Automobile to highlight its advantages.

When the market growth slows down, everyone's competition will become very fierce.

"We strive to first develop an SUV model of the same level based on the Tiggo. Then we can quickly mass-produce it by the end of next year and see how the market reacts."

"At the same time, we will also work with the sales department to make relevant publicity plans so that we can occupy more share in next year's automobile market."

Along with Chery Automobile's actions, various brands are also ready to make moves.

Even at Nanshan Hongqi, Zhu Zhengfeng personally called to communicate with Cao Yang.

"Mr. Cao, our Hongqi currently focuses on the HS5 and H5 products. Some other original models either have very low sales or have stopped production."

"This is definitely not enough in the face of fierce market competition."

"Although we still have two new models under development, even if these two new models are launched next year, we will only have four main products."

"I'm wondering if Nanshan Hongqi can also consider dividing it into two sub-brands for development. One is the Hongqi brand for mid-to-high-end products, and the other is an independent new brand for mid-to-low-end brands?"

Among the entire Spring City Automobile Group, what Zhu Zhengfeng cares about most is Nanshan Hongqi.

In particular, the performance of HS5 is very good. Although H5 has just been launched, its market performance is not bad.

Under this circumstance, he very much hopes that Nanshan Hongqi can reach a higher level.

"For Nanshan Hongqi, the Hongqi brand is the thing that impresses people the most."

“If a new independent brand is launched at this time, I’m afraid it may not necessarily have any special effect.”

"In the past month, the practice of 'sister cars' has become a bit popular in the industry, and Volkswagen has tried it very early."

"But there are prerequisites for this kind of gameplay. You must have a strong enough foundation to support the development of the platform and the launch of sister models. Otherwise, you will be dragged to death before you can get good results."

"There are three kinds of games in economics, positive sum, negative sum, and zero sum."

"Which type of sister model does it belong to?"

"Take Magotan and Passat, which you are most familiar with, Mr. Zhu, as examples. Normally, there are three possible results."

"The first is a zero-sum game. Magotan and Passat are in a competitive relationship. If you buy Passat, you must abandon Magotan."

"The second type is a negative-sum game. The Magotan and Passat competed viciously, and in the end they fought hard. Both sides suffered losses, and sales were not good."

"The last thing is the positive-sum game. The Passat sold very well and opened up the market early. As a sister model, the Magotan gained good market recognition once it was launched. In the end, the sales of both Passat and Magotan increased."

"Zhenghe Game is the ideal state of every manufacturer, and Magotan and Passat have basically achieved this state."

"But that is based on the brand heritage that North and South Volkswagen has accumulated in China for many years. Sisters are basically a positive-sum game for them, so they are very active in launching more sister cars."

"But the situation of Nanshan Hongqi is different. Our influence in the country is already relatively weak, and our market share is very low."

"If two brands are launched at this time, it is equivalent to creating a 'sister car' version that is different from Volkswagen."

"Under such circumstances, it is absolutely very difficult for this kind of sister car to succeed."

"I think it may not be suitable for the current Nanshan Red Flag."

Cao Yang did not express support for Zhu Zhengfeng's proposal this time.

Don't look at the turmoil others are doing, just think that following the trend will definitely lead to success.

The actual situation is simply not like this.

It is enough for Nanshan Hongqi to manage the Hongqi brand well, and there should be no other ideas.

For Nanshan Hongqi, dual brands or sister cars are completely giving up their own advantages, which will do more harm than good.

Feeling Cao Yang's firm opposition, Zhu Zhengfeng was a little disappointed.

But he also knew that what Cao Yang said was not entirely unreasonable.

If I continue to persist, there will be no better results.

It would be better to help Nanshan Group to do a good job in Nanshan Red Flag.

Other independent brands are hitting the annual sales target of 500,000, but Nanshan Hongqi is still working hard to achieve the annual sales target of 200,000.

Such a gap is definitely not what Zhu Zhengfeng wants to see.

"Mr. Cao, your analysis is correct. There is a saying on the Internet that ideals are full, but reality is very skinny."

"Perhaps strategies such as sister cars and dual brands are a good thing for international automobile giants, but for us at Nanshan Hongqi, we need to continue to observe what the situation will be."

"We will discuss subsequent plans after the situation becomes clearer."

Zhu Zhengfeng found a step for himself and walked down the steps.

After all, the situation of Nanshan Red Flag is indeed different from that of Nanshan Public.

If you insist on following other people's footsteps, maybe there will be problems.

This is certainly not what Zhu Zhengfeng hopes to achieve.

"Well, in a few years, it will be better for us to review the development path of Nanshan Hongqi after we see the effects of the sister car or dual-brand strategies of each joint venture car company and each independent brand."

"We still have some time to wait, so we don't have to be so anxious."

Seeing that Zhu Zhengfeng did not insist on his opinion, Cao Yang was relieved.

He is not afraid of Spring City Automobile Group, but he also does not want to have a confrontation with Spring City Automobile Group.

In business, many friends lead to many paths.

While various domestic car companies are busy reviewing dual-brand and sister car matters, for Nanshan Group, or for Yangcheng Automobile Group, an unexpected and reasonable thing happened. .