Introduction: Hongqi, the former light of China’s national automobile industry, experienced ups and downs several times after entering the civilian market in the 1990s, and has never achieved a true revival. However, in recent years, thanks to FAW's efforts, Hongqi's sales have begun to show explosive growth. However, under such a good situation, Hongqi still faces great challenges in the future.
Article by Zhang Junzhi?|?
Unconsciously, there were more and more Hongqi cars on the road. The official sales data released by Hongqi also supports the author's feeling - in August, Hongqi brand sales exceeded 20,000 vehicles for the first time, reaching 21,000 vehicles, a year-on-year increase of 110; in addition, from January to August, Hongqi's cumulative sales exceeded 100,000 vehicles, reaching 108,500, a year-on-year increase of 108.
Although this sales volume is still far behind that of car companies such as FAW-Volkswagen, SAIC-Volkswagen, and Geely, which sell more than 100,000 vehicles in a single month, car companies have been affected by the epidemic this year. , in the context of a general sharp decline in sales, it appears to be very valuable. In addition, in terms of Hongqi’s sales in the past few years (Hongqi sales were 5,037 vehicles in 2015, 4,815 vehicles in 2016, 4,665 vehicles in 2017, and 30,000 vehicles in 2018), sales of more than 100,000 vehicles have been exceeded in 8 months. , which can be described as rapid progress.
Hongqi sedan, a national brand that the Chinese people are proud of, had high hopes from the Chinese people after it entered the civilian market. However, after several ups and downs, it has never achieved real success in the market. . Behind the current surge in sales, what has Hongqi done right? As China's only independent luxury brand capable of targeting the C-segment and above market, what challenges does Hongqi face?
1
The red flag is covered in dust
In August 1958, the central government was eager to use domestically produced luxury cars at the celebration of the tenth anniversary of New China, so it issued an order to FAW took on the task of manufacturing domestically produced luxury cars. The employees of FAW lived up to their heavy responsibility. They quickly hand-made a luxury sedan based on the 1955 Chrysler Imperial sedan. Wu De, then the first secretary of the Jilin Provincial Party Committee, named the car "Hongqi" at the conference.
On October 1, 1959, 10 brand-new CA72 Hongqi sedans officially made their debut at the National Day celebration in the capital. Their solemn and elegant shape and cruiser-like heroic appearance attracted widespread attention at home and abroad. Since then, the Hongqi sedan has frequently appeared on important occasions as a state car for national leaders and major national events. It has been endowed with a strong political color and has become China's "political car" and "concierge car." Hongqi cars have therefore become synonymous with high-end, nobility, luxury and safety in the minds of Chinese people. But by 1981, the Hongqi sedan, which had gone through 23 years of history, announced that it would cease production due to high fuel consumption, high costs, and low output. At this time, Hongqi President produced 1,540 Hongqi cars.
After the reform and opening up, faced with the impact of imported cars and joint venture brands on the Chinese automobile market, the revival of Hongqi has become the national emotional appeal of many Chinese people. In 1989, the State Council approved FAW to resume production of Hongqi sedans. Although Hongqi was already severely weakened, it still produced 20 cars that year for use during the National Day. On March 22, 1993, the first Hongqi luxury car after the resumption of production was bought by Wang Wenqian, a farmer entrepreneur from Xinchang County, Zhejiang Province. This is the first time that Hongqi luxury sedan has stepped down from the altar since its birth.
In 1996, FAW cooperated with foreign automobile manufacturers and based on the appearance of the then-best-selling Audi 100, replaced it with a Chrysler 488 engine with a maximum power of 103 horsepower and launched the Hongqi CA7220, commonly known as "Little Hongqi". Because the appearance is very similar to the Audi 100, Xiaohongqi is jokingly called "the flag on the Audi car" by the Chinese. However, the emergence of Xiaohongqi is still a milestone event in the history of Hongqi cars: Hongqi is no longer just a car for national leaders and an "official car" of the government, but has truly entered the civilian market.
The distinguished brand image, the sentiments of the Chinese people, and more modern technology made Xiaohongqi a good start as soon as it came out.
Many hotels, companies, and entrepreneurs who got rich first are proud to own Hongqi cars. In more than a year, its sales exceeded 25,000 units. In 1998, Hongqi struck while the iron was hot and remodeled Xiaohongqi, adding ABS, airbags and other configurations, and replacing it with a domestic engine and a new car logo. At the same time, the name of the new car has also been updated to "98 Xinxing". Because the price is quite competitive, this car has also received good market response.
The "brand-changing car manufacturing" allowed Hongqi to taste the sweetness of the market, and also led Hongqi to the era of "brand-changing". In 1998, Hongqi built the CA7460 luxury sedan based on the "Lincoln City". It only adjusted the headlights, grille and logo of the Lincoln City. In 2000, Hongqi launched the Hongqi Century Star sedan based on the Audi 200. In 2005, at the Shanghai Auto Show, Hongqi launched the HQ3 based on the Toyota Crown MAJESTA (S180). Like previous products, the Hongqi HQ3 is not much different from the prototype except for the inner trim strips of the front grille and the car logo. Make adjustments... However, this series of rebadged cars has made Hongqi more and more like a hybrid car that combines foreign "hearts" and models with a Chinese logo, making it difficult for high-end car consumers to recognize it. What's more serious is that these actions have tarnished Hongqi's brand: many Chinese people criticized FAW's rebranding behavior as completely contrary to the Hongqi spirit of "overcoming difficulties, self-reliance, and independent research and development". The market competitiveness of Hongqi sedans has gradually weakened, sales have dropped sharply, and Hongqi's revival has also gradually declined.
In the following years, in order to revitalize Hongqi, FAW also adopted various measures. For example, in 2008, it merged Hongqi’s sales network into the popular Pentium brand network and significantly reduced prices; in 2009, it significantly Increase independent research and development efforts, and the overall development strategy is focused on self-owned brand cars; in 2010, the Hongqi brand was planned independently from all other brands of FAW Group, trying to rewrite the history of Hongqi having never made a profit with an investment of more than 3 billion yuan, and in Since then, H7, L5 and other models have been launched one after another...
However, the performance of Hongqi sedans in the market can only be described as very bleak. For example, the H7 model, which has become the most popular model, has only been sold for 6 years after being launched. 14,000 units have been sold, and the L5, which sells for as much as 5 million, is not even as visible on the street as Ferrari and Lamborghini. After more than 20 years of transformation, Hongqi has never been able to truly revive.
2
The red flag is booming
There is a famous saying: A group of sheep led by a lion can defeat a group of lions led by a sheep. The same is true for the development of an enterprise. The height and ability of enterprise leaders often determine the height an enterprise can achieve. In August 2017, FAW ushered in its own Lion King. At that time, the chairman of Changan and FAW exchanged, and Xu Liuping, known as the "Young Marshal", became the chairman of FAW Group.
After Xu Liuping took office, he immediately began to conduct market research, held red flag symposiums, and listened to opinions from many sides. The core content was how to catch red flags. His goal is also very clear, which is to use the power of the entire group to seize Hongqi. “We must use the shortest time, as soon as half a year, and at the latest one year, to fundamentally change the quality and quality of the Hongqi brand’s products. We must make Hongqi become China’s The first luxury car brand and the only luxury car brand. "The future Hongqi must be a car that everyone from the president of the country to ordinary people can like."
In order to achieve these goals, one month after taking office, Xu Liuping began drastic reforms: first, internal rectification of competitive recruitment, recruiting capable old generals to "fight fires", and at the same time recruiting talents from all walks of life to increase the construction of talent gradients. …In January 2018, FAW held a grand Hongqi brand strategy conference at the Great Hall of the People. Xu Liuping personally delivered a keynote speech, explaining Hongqi’s new positioning and strategic goals in the future, “The brand concept of the new Hongqi is ‘Chinese-style new "Noble and refined", the brand goal is to become the "new noble brand" that is "China's first and world-famous". Hongqi must "satisfy consumers' pursuit of 'good life and wonderful travel' in the new era" and "shoulder the heavy responsibility of a strong Chinese automobile industry given by history."
He proposed that Hongqi’s sales should reach 100,000 units in 2020, 300,000 units in 2025, and 500,000 units in 2035.
Under the efforts of Xu Liuping and the entire group, Hongqi began to embark on the fast track. Sales in 2018 reached 30,000, and sales in 2019 reached 100,000 a year ahead of schedule. This year, under the influence of the epidemic, Hongqi Sales in the first eight months have reached 108,500 vehicles. Not long ago, Xu Liuping said that Hongqi's sales target in 2020 is 200,000 vehicles, and said that if this goal can be achieved, Hongqi's sales target in 2021 will be adjusted to 400,000 vehicles.
Behind the surge in sales, what did Hongqi do right?
After reviewing the rapid development of Hongqi in recent years, it is not difficult to find that a significant change is that Hongqi has become more "down to earth". It began to work hard on the mainstream track, with more products and more affordable prices. For example, in 2017, the only products on sale for Hongqi were the H7 priced at 249,800-479,800 yuan and the L5 priced at 5 million yuan. . The competitors that the H7 faces are strong joint venture luxury brands, and the L5, priced at 5 million, is targeted at a very niche market, which naturally makes it difficult for it to perform well in the market. Today, Hongqi’s most popular models are the B-class sedan H5 priced at RMB 140,000-200,000, the SUV model HS5 priced at RMB 180,000-250,000, and the pure electric SUVE priced at RMB 220,000-260,000. -HS3. These three models are targeting the B-class car market, the continued hot SUV market, as well as the new energy, luxury travel and rental markets. These markets are now the most mainstream tracks outside the A-class car market.
And according to the new Hongqi brand strategy, the Hongqi product family will gradually cover four series in the future: L series - new high-end Hongqi supreme car, S series - new high-end Hongqi coupe, H series - new high-end Hongqi coupe Gaoshang Hongqi's mainstream car, Q series - the new Gaoshang Hongqi business travel, covers multiple market segments, from cars to SUVs, from gasoline cars to electric cars.
More mainstream tracks, increasingly rich product lineups, and more affordable prices undoubtedly provide consumers with more choices, thus achieving sales growth.
The surge in sales of Hongqi is also inseparable from the significant improvement in product strength. Judging from the product strength of the two main cars, H5 and HS5, they have strong appearance, configuration level and cost performance. market competitiveness. The newly launched Hongqi H9, which has a good appearance, has also received heated discussions from the media and high attention from the market, and is expected to become a dark horse among C-class cars. In order to improve Hongqi's product quality, FAW has newly established world-class quality standards and extremely strict process quality control requirements. For example, it insists on using the world's best suppliers and technologically advanced partners, and invests heavily in building a world-class brand. Top standard manufacturing base.
Products that are sincere to consumers will naturally be recognized and welcomed by the consumer market.
In addition, the number of channel stores that sold Hongqi in the past was scarce, making it difficult for many consumers to come into contact with Hongqi in reality, let alone understand and choose Hongqi. After 2017, Hongqi signed the first batch of 21 4S stores, all of which are among the top 100 dealers in China. In 2018, Hongqi's 4S stores rapidly grew to 100, and by the end of this year, Hongqi's goal is to expand to 200, covering key cities and most regions across the country. The rapid expansion of channels has undoubtedly played a key role in Hongqi's continued increase in sales.
In terms of brand building and communication, Hongqi has also changed its previous solemn and steady image, and has begun to become younger, livelier, and trendy. For example, it invited Jin Dong to endorse the Hongqi brand and organized cross-border cooperation with the Forbidden City. "Special Exhibition of Ancient Chinese Flowers and Trees", co-produced original musical theater "True Love: Butterfly Lovers", etc. These actions have reshaped Hongqi's brand image and allowed the Hongqi brand to once again win the attention of Chinese people.
It can be said that since 2017, it is through a series of efforts in products, channels, brands, etc. that Hongqi has experienced an explosion in sales.
3
Hongqi’s hidden worries
Under the leadership of Xu Liuping, the revival of the Hongqi brand currently seems to be just around the corner. However, in the author's opinion, Hongqi still faces great challenges and has a long way to go before it can truly realize its revival and become "China's No. 1 and world-famous" luxury car brand.
First of all, we have to see the fact that the current substantial growth in Hongqi’s sales is due to Hongqi’s relatively small base. In addition, several models of Hongqi after 2017 have not yet passed the product quality inspection period. , only in the next few years, the quality of Hongqi can truly withstand the test of the market, and can win over consumers with its products and quality, will Hongqi enter a stage of massive growth, and the reputation of the Hongqi brand will continue to rise, and then win the market. Opportunities to compete with BBA and the like. Obviously, Hongqi has not yet passed this stage and formed a social word-of-mouth effect.
Secondly, Hongqi’s current two main models, H5 and HS5, account for more than 80% of Hongqi’s sales. One of these two cars focuses on the B-class sedan market, and the other focuses on the SUV market. But the B-class car market can be said to be the most fierce track. Major players such as Volkswagen’s Passat and Magotan, Toyota’s Camry, Honda’s Accord, Audi A4, BMW 3 Series, and Mercedes-Benz C-Class require brands and products. Power has product power. Domestic car companies have yet to have a truly successful model in challenging the B-class sedan market. Compared with these competitors, Hongqi H5 currently only has a cost-effective advantage. However, relying on cost-effectiveness to conquer the market is definitely not a long-term solution. Once competitors cut prices and squeeze you, the market will be easily lost.
The HS5, which focuses on the SUV market, is in a similar situation to the H5. It not only has to face Honda CRV, Toyota RAV4, Volkswagen's Tiguan L, Buick Envision, and Nissan X-Trail, which frequently sell over 10,000 yuan a month. Competition for best-selling models also faces competition from domestic brands such as Geely's Lynk & Co 01 and Great Wall's WEY. Although the HS5 is currently performing extremely well, with sales reaching more than 10,000 units in August, people are not optimistic about whether the technology and market support of the Hongqi brand can continue to compete with these giants who have been deeply involved in SUVs for many years.
From a brand perspective, Hongqi’s goal is to become “China’s first luxury car brand and the only luxury car brand.” However, the price range of Hongqi cars is huge, from 140,000 to 150,000 yuan to hundreds of thousands. There are prices ranging from 10,000 yuan to 10,000 yuan. Such a large span and such a large market price space are very rare for the same brand, which blurs the market positioning and image of the entire brand. Moreover, Hongqi's main models H5 and HS5 are not luxury market models. This is undoubtedly detrimental to Hongqi's pursuit of higher-end markets.
If Hongqi wants to become a luxury brand, it must have the ability to truly compete with BMW, Mercedes-Benz and Audi in the C-class medium and large car market. Hongqi naturally knows this all too well. In August this year, Hongqi launched the H9. As soon as it was unveiled, it aroused heated discussion in the market. With an official guide price of RMB 309,800-539,800, this car is positioned as a C-class luxury flagship sedan and will compete with three luxury sedans: Audi A6L, BMW 5 Series and Mercedes-Benz E-Class. However, what is worrying is that in the C-level market segment, BBA is the absolute leader. The total market share of the three is as high as 85%, which is a complete monopoly advantage. Hongqi H9 shoulders the important task of Hongqi to open up the market and create a luxury brand image. Facing powerful enemies, it faces great challenges. It is reported that from the fourth quarter of this year to next year, Hongqi will also release two models, namely the large luxury SUV model E-HS9 and the super sports car S9, to further help build its luxury brand image. However, according to industry insiders, the customer base will become smaller as you go higher-end. It remains to be seen whether Hongqi can touch the BBA cake.
For Hongqi, in order to compete in higher-level markets, the core key that cannot be avoided is the innovation and breakthrough of technology and products. Only in this regard can it have the strength to compete with BBA. Finally make a breakthrough in the market, otherwise even what seems to be a good situation today will turn into a flash in the pan.
And this is also the situation that I fear most: Hongqi, China's only independent high-end car brand, will find it difficult to break through the suppression of giants such as BBA. On the downside, it will face competition from a pack of wolves, and eventually fall into the "high-level, low-level" situation again. A dilemma.
4
Conclusion
For the Chinese, the Hongqi brand is a special existence. It is the embodiment of the national spirit of self-reliance and self-reliance, and is the most important brand. The Chinese automobile brand that has attracted worldwide attention is the pride and sentiment of a generation of car makers. Hongqi is not only a car brand, but also a spirit and memory. Now, under the leadership of Xu Liuping, Hongqi has begun to show signs of prosperity. Although the challenges and difficulties it faces are still foreseeable, the author still sincerely hopes that Hongqi can truly achieve a strong revival and become a leading player in China's automobile industry. A great flag in the world.
This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.