In the luxury car market, BYD is ready

wallstreetcn ·  11/21/2023 20:46

bigAuthor | Zhou Zhiyu

On November 16 of last year, BYD's 3 millionth NEV went offline. At this milestone, BYD Chairman Wang Chuanfu announced the launch of a “new professional and personalized brand”. This is today's Equation Leopard.

Not long ago, Equation Leopard's first model, the Leopard 5, was launched. It uses a DMO super hybrid off-road platform. With the support of many black technologies, off-road performance is directly benchmarked against Mercedes-Benz G-Class cars. Within 72 hours of going on the market, the Leopard 5 also achieved a definite breakthrough of 10,000 vehicles. This is a rare thing for a hardcore SUV model.

Equation Leopard, after the first impact, will also become Wang Chuanfu's key layout in the luxury car market, along with Tension.

The question is, after playing the Leopard 5 card, how will the ambitious Equation Leopard break through consumers' inherent impression of BYD and achieve results in terms of sales volume and establishment of a “personalized” brand label?

During the Guangzhou Auto Show, Xiong Tianbo, general manager of BYD Equation Bao Auto, told Wall Street News that Equation Bao's short-term mission is to develop a brand while enhancing the system's ability to deliver orders and guarantee services.

What Equation Bao wants to do is to provide consumers who have difficulty making choices with distinctive characteristics in a market where products are homogenized and internal volume is continuous. Ultimately, users who want to live an undefined life can think of Equation Leopard first when buying a car.

After completing the goal of brand building, Xiong Tianbo believes that in the end, the systematization ability formed by Equation Leopard can be reflected in sales volume.

Xiong Tianbo said that satisfying users' pursuit of technology and lifestyle is Equation Leopard's goal, and it will also be Equation Leopard's most distinctive feature.

The following is the full text of Wall Street News and Xiong Tianbo's conversation (edited):

Q: Previously, the market expected Equation Leopard's pricing to be in the 600,000-800,000 range to fill the price band between momentum and admiration. However, in the end, Equation Panther 5 was priced at around 300,000. How was the pricing strategy for Equation Panther planned?

Xiong Tianbo: The pricing logic for Equation Bao products is based on customer group decisions, as well as demand and expectations for sales volume.

Since the pre-sale of Equation Panther 5, there have been two main types of customers. The first category is people who love off-road. The problem we need to solve is their long-term psychological price expectations; the other category is urban users, many of whom are car owners who drive BBA, and they have an urgent need to exchange. For this type of customer, we need to think about what kind of pricing makes them willing to accept a new brand or new technology product.

It can be said that some brands decide to sell to a niche group and don't care about sales volume. For the Equation Leopard, the Leopard 5 in particular, as the brand's first model, hopes for a certain amount of support. In this case, it is necessary to evaluate the overall competitiveness of the product. Price is one part.

BYD is a science and technology mindset. This logical relationship is also very simple: who to sell to, how much to sell, and how to be competitive under these preconditions, and make decisions based on this.

Q: In the 300,000 price range, how can Equation Leopard avoid competition with Tension?

Xiong Tianbo: BYD has brand divisions and product divisions, especially for “brand upward” brands.

Technology is the first element that separates brands. Dynasty and Ocean are BYD's chassis. They have a very large base, accounting for 70%-80% of BYD's car sales. Their products may have a certain degree of similarity, but they will have different styles. Equation Leopard, Tension, and Expectation use technology as a separator; each has its own unique technical characteristics. BYD, on the other hand, uses this to attract technology-conscious consumers.

Equation Leopard hopes to attract consumers not because it is “BYD's Equation Leopard,” but because BYD Equation Leopard has a unique DMO technology.

In terms of product types, Equation Leopard and Tension are not the same, and they even complement each other. For example, Tension D9 and Equation Panther 5 are a perfect match for family travel.

Q: The cross-country track is very competitive. What do you think of the competition on this track?

Xiong Tianbo: This year, in fact, there are a lot of cross-country racing tracks, especially hardcore off-road models. Previously, models in this market segment accounted for about 1.3%-1.5% of the overall market. As the number of players increased, this ratio increased. When everyone is piling up to enter this market, what is behind it is the expansion of the overall market size, not the loss of others. This is why Equation Panther wants to enter.

Q: The cross-country track places a lot of emphasis on brand culture. As a new brand, how is Equation Leopard planned for this?

Xiong Tianbo: The new energy hardcore off-road market is increasing, but it is not limited to extreme off-road in the narrow sense; it can also be a light cross-country that extends the radius of life.

Off-road is just one part of the lifestyle. Today's consumers don't want their lives defined and pursue individuality. Aiming at this trend, Equation Leopard needs to expand its lifestyle. Next year, Equation Leopard will post more content in this section, namely Equation Leopard's understanding and research on lifestyle, and how to build such a life circle.

Q: The first model was an off-road “niche” category, so much so that some people think that the Equation Leopard is for off-road. What impact will this have on Equation Leopard's next brand planning and model planning?

Xiong Tianbo: Equation Bao is a diverse brand that is very inclusive. In addition to hardcore off-road, there will be sports car models and more models planned in the future. Equation Leopard will give you a relatively clear product plan, and it will also do a good job when making a certain type of model. At different stages, there will be different priorities and trade-offs.

For example, the current Panther 5 focuses on off-road, so it must have special technology to support its off-road ability, so that it can go deeper and more thorough.

This is not to say that the Leopard 5 is not intelligent; it is also equipped with L2+ level intelligent assisted driving. Panther 5 is an all-rounder, but they also need to have their own outstanding events. If users focus on seat massage and refrigerators after Leopard 5 comes out, people won't have a clear understanding of it.

Only after the hardcore off-road product line has been improved, users are aware of Equation Leopard's technology, and the product also meets their expectations, will Equation Leopard be used as a sports car product again.

Whether it's off-road or a sports car, it's actually a way of life. In the end, Equation Leopard will form a whole through different understandings of lifestyles.

Q: Equation Panther has only recently celebrated its first anniversary as a brand. You have participated in Equation Leopard's brand planning and product launch throughout the process. Which part of the process has experienced greater difficulties?

Xiong Tianbo: When BYD announced the launch of 3 million new energy vehicles last year, Chairman Wang Chuanfu announced the establishment of the brand. In fact, prior to that, reserves of technology and products had already been made for four years.

My own experience is that the division between each brand and its own positioning is the most difficult point. The definition of the brand, the definition of the product, the core characteristics, and how to make consumers recognize you is the hardest point.

There are often initial brand plans or even after the product is launched, and they want everything. Including the launch of Panther 5, some people will ask me why there isn't this one and the other one. In my opinion, if all needs were met, it wouldn't be Panther 5.

Specifically, when it comes to the difficulties of Panther 5. The biggest difficulty of off-road models is that off-road scenarios require a high level of adaptability to product conditions and multiple scenarios, and require testing in various harsh environments. This is the biggest difficulty of being a Panther 5. Today's Panther 5 also has strong off-road ability.

Q: What label do you think is most appropriate for Equation Leopard, so that users can think of Equation Leopard as soon as they have corresponding requirements when choosing a car?

Xiong Tianbo: We also have a feeling that many people find it difficult to choose a car, especially when it comes to exchanging cars. This is because the products currently on the market are too homogenized.

From the perspective of the product, Equation Panther wants to provide a unique choice when users face difficulties in choosing. They can think that “Equation Leopard's car can be viewed”. In addition, Equation Leopard also hopes that when you think of BYD products, you can also think of Equation Leopard.

Equation Leopard is a product that breaks the rules and can be individually defined. Not long ago, a user told me that the people who buy Panther 5 are a group of people who don't want to compromise on their lives. When users can all have this perception, Equation Leopard will be created.

Pursue individuality without compromising on life. This will be an important label for Equation Leopard.

Q: Equation Leopard uses a direct sales model in terms of channels. Now, in addition to direct sales, many new forces are also acting as dealer channels. What do you think of the channel changes?

Xiong Tianbo: In the early days, I also worked as a channel for BYD. When Equation Bao is directly managed, it needs to be recognized by more people as a new brand, and this part of the investment is essential.

Equation Bao plans to open 150 stores in more than 80 cities within the year. The stores are all stores with service functions first to solve the service guarantee after the product is launched. Instead, like before, many car companies chose to open supermarkets for the sake of exposure.

A lot of people say that 4S stores will disappear, I don't think so. Now many car companies are returning to the dealership model of 4S stores, still in order to solve the problems encountered by customers. They need to make customers convenient and have better guarantees.

Q: Equation Bao has now opened so many stores. What are your expectations for sales volume?

Xiong Tianbo: We will judge exactly how many stores we will build based on our estimated sales volume in the market, and we also think we can cover these stores if we have the ability to cover them. Specific sales targets are not easy to disclose at this stage.

When the automobile industry did market research in the early days, it was still viewed on a yearly and quarterly basis. It was later discovered that it had to change from month to month, week to week, or even every day now. This is actually a period of industry change; it's hard to say how far into the future can be seen.

For Equation Leopard, the short term means that after a competitive product like Leopard 5 comes out, orders will be delivered in the short term, next year's sales will be good, and the brand's service guarantee system will be improved at the same time. This is a steady and far-reaching move.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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