Geely'S New Energy Dilemma

Geely's electrification transformation failed to continue its market advantage built in the era of fuel vehicles.

The latest data from the Passenger Transport Federation shows that in April this year, the wholesale volume of Geely's narrow sense passenger cars has returned to the 100000 mark, a slight increase of 1.5% over the same period last year. Under the impact of the epidemic, this leading auto company of China's own brand increased its market share against the trend under the general environment of market squeeze.

However, Geely's wholesale sales of new energy vehicles in April were only 1543, down 79.9% year on year; The cumulative sales volume in the first four months was 3831, down 86.1% year on year. At present, the only pure electric vehicles sold by Geely are Geometric A, Emgrand EV and Emgrand GES. The total sales volume of these three models in the first four months of this year was only 2871, down nearly 90% from the same period last year. In the first four months of this year, Geely has been overtaken by a group of new car making forces, such as Weilai, Xiaopeng, Weima and Ideals.

In 2015, Geely launched a high-profile "Blue Geely Action", which was the first of its own brands to announce the transformation to electrification. In Geely's new energy strategy, it takes into account the three technical routes of hybrid, plug-in hybrid and pure electric vehicles, and develops hydrogen fuel cell vehicles and methanol vehicles. At that time, Geely's goal was that by 2020, the sales of new energy vehicles would account for more than 90% of Geely's overall sales; Among them, the sales of plug-in hybrid and oil electric hybrid vehicles accounted for 65%, and the sales of pure electric vehicles accounted for 35%.

Over the past five years, the pace of development of new energy vehicles has been much slower than originally envisaged. In 2019, Geely's total sales of new energy and electrified vehicles were 113000, accounting for 8.3% of the total sales. In the first four months of this year, only 14000 vehicles were sold, accounting for only 4.6% of the total sales.

Of course, Geely is ambitious in the new energy vehicle market. In addition to Geely Group's geometry and Volvo Group's pure electronic brand Polestar, Geely and Daimler's new smart brand is also under preparation. Recently, Maple Leaf, a low-end pure electric vehicle brand under Geely Technology Group, also launched its first electric vehicle. If the long-distance vehicles and London electric vehicles under Geely New Energy Commercial Vehicle Group are added, there are already 6 new energy brands under Geely Holding.

However, the reality is that Geely has not yet become the mainstream of the market, despite its early deployment of new energy business. In 2020, after Tesla made its own country, it will speed up its efforts to seize the city and seize the land, and new forces in the head of car building will gather momentum. The competition in the domestic new energy vehicle market will become increasingly fierce, leaving Geely with very urgent market space and time.

Breaking dilemma

In 2017, Geely launched a new brand, LinkedIn, which broke through the bottleneck of China's own brand and achieved initial success in the market.

This approach has been applied to the strategy of Geely's new energy vehicles. Geely hopes to establish a new pure electric platform to participate in the market competition of new energy vehicles. In 2017, Jixing became an independent pure electric brand from Volvo, and its main competitor was Tesla. In April 2019, Geely launched a new all electric brand geometry in Singapore, and launched its first car geometry A. In Geely's system, Geometric brand is parallel to Geely brand and Linker brand, and both belong to Geely Automobile Group.

The two new brands are still in the growth stage, and their products, brands and long-term strategies have just started. However, the rapid localization of Tesla's Shanghai factory and the new forces of car manufacturing have emerged one after another, and the time window of China's new energy vehicle market is slowly closing.

Not long ago, polar stars and geometry experienced personnel changes. In March, Gao Hong took over from Wu Zhenhao as the president of Jixing in China to prepare for the year of product delivery. In April, Liu Zhifeng took over from Zheng Zhang as the new general manager of marketing of Geometric Auto.

On May 10, Liu Zhifeng appeared in the Geometric Cloud Conference in his new identity for the first time. That night, Geometric Automotive released the Geometric+platform, announcing the opening of four major technical fields, namely, driverless, intelligent networking, three electricity technology and industrial design.

"With the open source technology, Geocar is committed to making Geocar an interesting Internet pure electric brand." Feng Qingfeng, vice president of Geely Automobile Group, said at the cloud conference.

The Internet is accelerating its integration with cars and changing the way cars are used, which is the gene that Internet people have been emphasizing in cross-border car building in recent years. However, some insiders pointed out that although Geely has always been deeply distributed in intelligence and its marketing methods are relatively flexible, it has always been unable to shake off the inherent impression of consumers on traditional car companies.

However, in April this year, Geely launched a new new energy brand - Maple Leaf Automobile, while several brands have not seen significant improvement.

Although Maple Leaf is a new sub brand, it actually has a lot of connections with Geely. Maple Leaf Motor's parent company is Fengsheng Auto Technology Group, formerly known as "Kangdi Electric Vehicle Group Co., Ltd.", and its shareholders include Geely Technology Group Co., Ltd. and Zhejiang Kangdi Auto Industry Co., Ltd. The qualification of the whole vehicle of Kangdi Electric Vehicle comes from Shanghai Huapu Automobile, a subsidiary of Geely Automobile.

Maple Leaf aims at the middle and low end market. The first model of the brand - small electric SUV Maple Leaf 30x - has been officially unveiled and pre-sale has been started. The pre-sale price range after subsidies is 68800 to 79800 yuan.

"Geely has been developing in the direction of high-end and globalization in recent years, and Maple Leaf's positioning is obviously contrary to it. However, Maple Leaf can use the resources that Conti had before, and Conti itself is good at low-end products." On May 18, a person familiar with Geely in the automotive industry said to the 21st Century Business Herald reporter.

Advantages and disadvantages of radical expansion

From the perspective of brand tonality, Jixing's positioning towards the high-end market and geometry is biased towards the middle and high-end market. In the low-end market, Geely has several electric vehicles that "convert oil into electricity", while Maple Leaf's positioning is more low-end. Geely's brand matrix from luxury to entry in the pure electric market has begun to take shape.

Geely has once again launched a multi brand strategy in the field of electric vehicles.

At present, the organizational structure of Geely Holding Group is relatively complex. It has five business branches, namely Geely Automobile Group, Volvo Car Group, Geely Technology Group, Geely New Energy Commercial Vehicle Group and Mingtai Group. If Maple Leaf is added, there are 10 vehicle brands in total. Among them, five new energy brands belong to four different groups.

From the perspective of the industry, the advantages and disadvantages of multi brand strategy are obvious. The advantage is that it can focus on different segments of the population according to different brand positioning, so as to better develop the market; The disadvantage is that building a new brand requires resources, manpower and time. Although Geely can improve efficiency through internal collaboration, it is unable to concentrate resources.

The huge system is one of the reasons for Geely's slow development of new energy vehicles in recent years. "At present, Geely still puts more investment into LinkedIn. After all, its energy is limited, so it can't balance more resources on other new brands or new technologies." The above industry insiders familiar with Geely told the reporter.

It is worth noting that Geely's new models are introduced slowly in pure electricity. Geely New Energy launched the Emgrand EV model in 2015, which was silent for two years. In 2018, the Emgrand GSe was launched, and both models were "oil to electricity". Geometric GE platform, in fact, is not a new pure electric platform built from scratch.

Geometric C, which was born on Geely's GE2.0 pure electric platform, will be launched this year. After the modest response in Geometric A market, this new car will be an important model to re test the market degree of Geometric cars, and it will also be a new start for Geely to enter the pure electric market.