The competition within the top three joint ventures is becoming unprecedentedly fierce.
The epidemic has intensified the changes in the auto market this year, and the battle between the three giants of joint ventures has also shown a new situation. In terms of the wholesale sales of the three major joint venture giants from January to July this year, although the Volkswagen brand is still leading, it has declined by 25% year-on-year. Toyota and Honda are pressing forward with a relatively stable trend. The gap is gradually narrowing.
The “dominant” position of the mass brand is being challenged
Comparing the sales of the three joint venture giants from January to July this year and the same period in the last three years, we can clearly see that the sales of Volkswagen brands are gradually declining. From January to July this year, its cumulative sales were 1.237 million units, which narrowed the gap with Toyota, which ranked second, to 419,000 units. This phenomenon also shows that among the joint venture brands, Volkswagen’s “hegemony” position is facing challenges from the Japanese.
Looking at the sales performance of Volkswagen’s domestically produced models from January to July this year, in the three major market segments of sedan, SUV and MPV, although the sales of sedan still topped the three major market segments, compared with the same period last year, the single Monthly sales have declined to varying degrees, while the SUV and MPV market segments are relatively stable.
Gasgoo Research Institute analysis pointed out that the sales of Volkswagen’s domestically produced models have declined this year, which is related to the decline in sales of hot models in sedans. Among them, the most outstanding performance is SAIC Volkswagen’s Polo, Santana and Passat, and FAW-Volkswagen’s Sagitar Sales have also shrunk compared to the same period last year. In addition, the single-month sales decline of its station wagon Weiling has been serious this year.
Industry analysts pointed out that the shrinking of the Volkswagen brand sedan product line is related to the long service time of most products in the Chinese market and the gradual weakening of competitiveness, on the other hand, it is also related to the active adjustment of the product line of SAIC Volkswagen. According to Jia Mingdi, general manager of SAIC Volkswagen Sales Co., Ltd., in the first half of this year, the market share of SAIC Volkswagen’s Volkswagen brand dropped by one percentage point, but the overall sales structure is tending to move closer to mid-to-high-end models, as in the past Volkswagen brand product structure A+ The sales volume of the first-class models accounted for 58%, which has now risen to 63%. “The proportion of entry-level products is declining, and the volume of the entire brand must be affected as it moves higher, but the product structure is not optimized here.” Jia Mingdi believes.
In the field of SUVs, FAW-Volkswagen’s Tanyue and Tange, and SAIC Volkswagen’s Tiguan and Tuyue have performed relatively steadily this year. In addition, in the MPV market, only two MPV products of Volkswagen’s domestic models are on sale, and they are all from SAIC Volkswagen, namely Touran and Weiran, which was launched at the end of May this year. As Touran has not made much progress in the household MPV market in recent years, the addition of high-end MPV products from the public this year will boost the market share of MPV products to a certain extent. However, at this stage, due to capacity constraints, Weiran’s volume is still limited.
Overall, the stability of Volkswagen brand SUV models and the increase in MPV models are difficult to offset the sales gap caused by the decline in sedan products. This is also the main reason for the sharp decline in Volkswagen brand sales year-on-year. Just when the Volkswagen brand lost most of the market due to the decline in sales of car products, Toyota and Honda showed rapid development in the country due to the dual-car front.
Dual-vehicle strategy boosts the steady development of “Liangtian”
This year, the overall decline in the passenger car market has not stopped the high sales of Japanese cars, especially since April, Toyota and Honda have shown relatively strong growth rates.
Let me talk about Toyota first. From January to July this year, the cumulative sales of Toyota-branded domestic models were 816,800 units, a year-on-year increase of 1.16%. This is commendable in the context of a severe decline in the domestic auto market due to the epidemic.
Since April this year, Toyota’s two joint ventures in China, FAW Toyota and GAC Toyota, have achieved relatively good results. This is reflected in the sales trend of Toyota’s domestic models. We can clearly see that its April sales have appeared year-on-year. An increase of 23.22%, followed by four consecutive months of positive growth, July sales hit a record of 150,000 units, a year-on-year increase of nearly 30%.
Honda’s cumulative sales of domestically-produced models in China this year reached 760,000 units, which is a slight gap compared with Toyota. This is mainly due to the fact that its joint venture company Dongfeng Honda suffered a large loss of production capacity during the epidemic in February and February this year. However, also from April, the sales of Honda’s joint-venture models have increased significantly. As of the end of July, sales of Honda’s joint ventures have been increasing for four consecutive months.
Thanks to the continuous growth of the past four months, the gap between Toyota, Honda and Volkswagen has narrowed. This phenomenon can also be seen in all mainstream market segments. For example, in the A-class car market, Corolla has surpassed Bora and Sagitar in sales from January to July this year, while Civic and Ralink have also surpassed the new Santana; in the B-class car market, Camry and Accord have surpassed Magotan and Passat; SUVs In the field, the cumulative sales of CR-V, RAV4, and XR-V this year all surpassed Tiguan. In addition, Guangqi Honda’s Haoying has a strong momentum for newcomers.
Gasgoo Research Institute pointed out that Toyota and Honda’s high sales in China are mainly due to the fact that they have launched two models in the same market segment. The two models belong to different joint ventures, thus forming a solid “dual car.” effect. Take Toyota as an example. Since 2018, FAW Toyota has begun to reduce the number of its models and focus more on the mainstream market segment and the promotion of TNGA products. In 2019, it launched Asia Dragon, filling its B+-class sedan market. Vacancies, thus forming a joint force with the Camry, a subsidiary of GAC Toyota, to jointly compete in the joint venture B-class car market. In addition, Honda has adopted the same strategy. The joint venture company Guangqi Honda launched Hao Ying at the end of last year, filling the gap in the compact SUV market for many years. Now Hao Ying’s strong performance also confirms its role as a CR-V. The strength of sister models.
“Compared with Honda, Toyota has a more comprehensive performance in its dual-vehicle strategy. This dual-vehicle strategy almost covers the mainstream market segments of A0, A, and B sedans and SUVs.” Auto industry observer Xia Jun (pseudonym) )think. He further pointed out that the full coverage of the main models in the mainstream market segments and the renewal of the entire series of products in the direction of TNGA are the main reasons for Toyota’s rapid development in the Chinese market in the past two years.
The internal competition of the top three joint ventures is unprecedentedly fierce
If a more rigorous “dual-vehicle” layout is the main factor for Toyota’s growth in China, then the strong terminal price has created higher value for it. Among the models sold by Toyota in China, the phenomenon of queuing to buy cars and raising prices is frequently seen. This phenomenon is reflected in popular models such as Highlander and Asia Dragon. Of course, Honda has a similar phenomenon. Its best-selling models such as Civic, CR-V, Accord, etc., have almost no discounts in the terminal market.
Compared with the “Randa” joint venture models, the terminal prices of Volkswagen’s joint venture products have dropped significantly this year. Among them, SAIC Volkswagen launched a number of promotions during the “55 Car Shopping Festival” in the first half of this year. Popular products such as Passat, Lavida, Tiguan, etc. After FAW-Volkswagen separated the Jetta, the price of the Bora terminal, which was at the same level as the old Jetta, dropped significantly, and it became a common phenomenon that some configuration discounts were 20,000-30,000 yuan. In addition, FAW-Volkswagen’s golf, Sagitar, Magotan and other terminal discounts are also larger.
Industry analysts pointed out that under the competitive environment of passenger car inventory, shopping prices are not a wise choice, but there are still many car companies that continue to reduce terminal prices in order to increase market share. This reflects the fierce market competition , On the other hand, it also shows that the brand’s premium ability is falling. Xia Jun believes that for the three joint venture giants, the most vigilant Volkswagen brand is that Toyota and Honda’s brand premium capabilities and value retention rates have always been relatively strong, which directly threatens the reputation of existing user groups.
In terms of the general environment of the passenger car market, Cui Dongshu, Secretary General of the Passenger Car Association, pointed out that the sales trend of mainstream joint venture brands from January to July this year was relatively stable. Especially in July, the sales of joint venture brands increased by 4% year-on-year. And Japanese are the most outstanding. In the passenger car market, at this stage, Volkswagen still leads the mainstream joint venture brands in sales and market share, but its growth momentum is gradually stalling. At the same time, Toyota and Honda are showing a relatively stable and enterprising trend. The industry believes that although the current three-legged pattern of joint venture brands has not changed, its internal competition is becoming unprecedentedly fierce.