Shulou(Shulou.com)11/24 Report--

The original title: "Why is it difficult for elephants to turn around?" "

Toyota President Akio Toyoda also has an identity, race car driver Morizo.

Holding the qualification of an international C-class racing driver, Akio Toyoda has a special plot for the car racing matter, thanks to Toyota's best chief tester, Hiroshi Narase.

He started his driver's journey by driving in the Nurburgring 24-hour endurance race in 2007. As a result, Akio Toyoda is called "the highest-level CEO in the hands of the car, and the best racing driver among the car bosses."

"I like cars with game, such as gasoline smell and a lot of noise." Akio Toyoda never conceals his pursuit of car performance and driving fun. But compared with his extreme love of fuel-fueled cars, he seems to be struggling with electric cars.

On the one hand, in December 2021, Toyota launched a more radical electric vehicle strategy. Akio Toyoda proposed that by 2030, Toyota will achieve global sales of 1/3 of new cars are pure electric vehicles. On the other hand, Akio Toyoda is hesitant about the electrification of the automobile industry, and is in a dilemma between hybrid, hydrogen and pure electricity.

The swing of Toyota electric vehicle strategy has become a microcosm of many traditional automobile giants in the electric transformation. Especially in China's auto market, where new energy vehicles are developing most rapidly, the comparison is more obvious.

At present, although many joint ventures have put forward the strategic proposition of electric transformation, the progress of the transformation is different. Most of the joint venture car companies backed by multinational groups are still in the stage of introducing platforms and laying out production capacity, and there are not many models sold on the market.

In sharp contrast, BYD stopped producing traditional fuel cars at the beginning of the year, the competition among new forces in car building tends to be white-hot, and Tesla cut prices to the end in an attempt to quickly seize the market.

In the increasingly fierce wave of electrification, the pace of electrification of joint venture car enterprises is slightly slow. From the absolute lead in the era of fuel vehicles to the relative backwardness in the new energy market, the "halo" of joint ventures is completely "out of order" on new energy. Focusing on the topic of electrified transformation of joint venture brands, this paper aims to answer three questions:

1. What is the current situation of joint venture brands in the new energy vehicle market?

2. Why is it difficult for an elephant to turn around?

3. Can the joint venture brand make up the lesson of electrification?

ONE, Elephant turn and Toyota's indecision, GM's story seems to be more representative.

As the founder of modern electric vehicles, GM launched a two-seat electric vehicle EV1 as early as 1996. In 2010, GM put into production of Chevrolet Volt electric cars. Limited by the market environment at that time, the two models did not become popular, but planted the seeds for GM power electrification.

In 2014, GM welcomed its first female CEO, Mary Bora. That year, although GM had passed the "bankruptcy crisis", problems such as a wide range of products, fragmented markets and bloated organizations were still unresolved.

Mary Bora, who has worked at GM for more than 40 years, is well aware of GM's "cause". She understands that to get out of its comfort zone, GM needs to look to the future and launch a complete transformation. New energy vehicles and self-driving have become the key navigation marks anchored by the Super Mary.

"the company is going through a painful but necessary transformation. GM can no longer invest in slow-selling cars and small cars, nor can it invest in remote markets where profits are unsightly. Money must be invested in electric cars and self-driving cars." Mary Bora said.

In 2019, Mary Bora pushed for the closure of nine GM plants in the United States in order to reduce costs and keep GM profitable during the economic downturn. at the same time, increase investment in emerging technologies such as electric cars and self-driving cars.

At the beginning of 2022, Mary Bora issued a "military writ": GM will produce 1 million electric vehicles by 2025. If achieved smoothly, this will be a major milestone on the road to GM's transformation. She even announced that she would "surpass Tesla in 2025".

However, GM's electrified transformation is not as smooth as Mary Bora expected.

In 2022, GM delivered 39096 all-electric vehicles in the United States, an increase of 57% over the same period last year, and it was also the best year for GM's all-electric models ever.

On the other hand, sales of 39096 pure electric vehicles account for only 1.7 per cent of GM's total sales. It is a far cry from Tesla's sales of more than 500000 vehicles in the US market.

Some analysts believe that the start-up speed of battery and battery production is slower than expected, and the product is too single, and other reasons are restricting GM's electrified transformation.

In an interview with time magazine, Mary Bora said bluntly: "I hope the electric Chevrolet Silverado pickup truck will be released as soon as possible. Of course, I drove the organization crazy because I kept challenging them how to go faster. Every time I design and see the vehicle they are working on, I think, 'how fast can we get it out?'"

If a global car brand wants to transform to electrification, it will not be able to bypass the Chinese market. In China, SAIC GM's road of transformation has also experienced twists and turns.

In 2018, SAIC GM launched the Buick Micro Blue 6 plug-in hybrid version. A year later, the pure electric version of micro-blue 6 was also officially launched. In 2020, Chevrolet Patrol and Buick's second pure electric SUV light blue 7 were introduced to the market one after another. However, the launch of the light blue series and Changxun did not cause many ripples in the market.

At present, SAIC GM only has Cadillac LYRIQ Ruige, a main electric model that still has a topic. This model is based on GM Ultium Autenon global electric platform to build the first model, by SAIC GM has high hopes.

This is the case with SAIC GM, which is determined to transform, and the difficulty of joint venture transformation is evident.

In November 2022, the domestic retail penetration rate of new energy vehicles was 36.3%, up 15% from 20.8% in November 2021, according to the Federation of passengers. Among them, the penetration rate of new energy vehicles in independent brands is 56.5%, while that of mainstream joint venture brands is only 5.2%.

In terms of monthly domestic retail share, the retail share of new energy vehicles of mainstream independent brands in November was 70.3%, 12.7% of new power and 10.5% of Tesla. By contrast, the share of joint venture brand new energy vehicles is only 4.2 per cent.

For a time, "transformation anxiety" has become a worry of the joint venture brand.

Li Bin, founder of TWO and Challenge, once said that as an innovative and entrepreneurial company, there are some characteristics that traditional car companies do not have, such as flexible decision-making, faster decision-making, and the ability to restructure products and business models. "if I go to be the CEO of a traditional car company, it is not necessarily better than them. It is more difficult to promote the transformation of a traditional giant than to be a startup."

It is a well-known fact that because of the long development cycle, long verification cycle and long return on investment cycle, the transformation of automobile enterprises is not destined to be achieved overnight, but a long and painful process. Especially for traditional automobile enterprises, because the construction of the system has been completed, the complex system brings greater uncertainty and more challenges in the process of transformation.

This conclusion is also applicable to the transformation of new energy vehicles. From changing the way of thinking to defining the transformation strategy, and then to the construction of organizational ecology, transformation is a great challenge for joint ventures.

First, the process of traditional automobile transformation is actually a process of interest breaking and reorganization.

Traditional automobile enterprises have a long history of development, and their main products and technologies are also concentrated in the field of traditional fuel vehicles. This is not only the advantage of them to occupy the traditional fuel vehicle market, but also a heavy burden for the development of new energy vehicles. Excessive obsession with the past and obsession with the existing market and internal combustion engine technology is one of the key reasons why joint venture brands are hesitant about electrification.

Take Toyota as an example, behind Toyota's adherence to diversified technological routes is its rich accumulation in the field of traditional fuel vehicles.

On the market side, Toyota's basic position in the global fuel vehicle market is solid. In 2021, Toyota sold 10.5 million vehicles worldwide, ranking first in global car sales. At the same time, the Japanese traditional automobile industry accounts for a relatively large section, and its engine and gearbox have more than 1 million employees. If we want to make electric transformation, it will undoubtedly face tremendous pressure on the Japanese automobile market and Toyota Motor.

On the technical side, since the first mass-produced Prius, the world's first mass-produced gas-electric hybrid car, Toyota has been leading the development direction of hybrid technology and pushing fuel-efficient cars to the peak. If the ALL IN is electrified, it will weaken the market space of Toyota hybrid products.

Second, the decision-making power of joint ventures is often in the foreign side, and the decision-making efficiency is low.

QQ repels MSN and Taobao defeats eBay. In the history of Chinese Internet business, there are numerous cases of "David challenging Goliath". A common feature is that the accurate understanding, understanding and pursuit of the user experience of Chinese consumers is a unique move for some local Internet companies.

For most automobile joint ventures, the decision-making power often rests with the foreign party. Because it is relatively far away from the Chinese market, the foreign parties of many joint venture brands still underestimate or even ignore the irreversible rise of China's new energy market, which makes joint ventures unable to respond flexibly and quickly in the face of great changes in the industry and market.

According to the 2022 Global Automotive Consumer Research report released by Deloitte, consumers in China, South Korea and Germany are more interested in pure electric cars, while Japanese consumers prefer hybrids. 69% of American consumers still want their next car to be a fuel car. "Chinese consumers are more interested in pure electric cars," the report said.

In Japan, for example, 4.46 million passenger cars were sold in 2021, of which 40 per cent were "electrified", but pure electric models accounted for only 0.4 per cent of total sales. For many automobile companies, their region does not have the excellent market environment and enthusiastic consumers for the development of new energy vehicles in China, and they are naturally less sensitive to the transformation of electrification.

Third, in the intelligent new energy market, the supply chain advantage of joint venture car enterprises is no longer prominent.

At present, intelligent electric is becoming the leading force in the automobile supply chain. In the era of fuel cars, Europe, the United States and Japan continue to lead the automobile industry with the help of strong parts and components. In the era of intelligent electrification, China will become an important new center in the reform of supply chain.

Compared with the early layout of independent brands and the new power of car construction, it will still take several years for joint venture car companies to reshape their supply chain, which is also one of the constraints that the joint venture car companies' electric models can not be landed on a large scale.

The latest report from THREE, McKinsey, which accelerates the transformation of McKinsey, mentions that the electric penetration rate of China's passenger car market has achieved an "amazing" increase in the past few years.

According to the China Association of Automobile Manufacturers, the penetration rate of new energy vehicles reached 33.8% in November 2022. From January to November 2022, the new energy penetration rate reached 25%, and the new energy vehicle penetration target was achieved three years ahead of schedule.

In the face of the huge market cake, joint venture car companies can never be indifferent. At the just-concluded Guangzhou Auto Show, the joint venture showed off a number of electric models in one breath. A detail worth paying attention to is that after the exploration period of "changing oil to electricity", these models are basically built by exclusive electric platforms, and their competitiveness has been improved to a certain extent.

Among them, FAW Toyota displayed its pure electric car bZ3; Guangzhou Automobile Toyota brought the first e-TNGA pure electric medium-sized SUV bZ4X; GM brought Buick Electra E5; Dongfeng Nissan brought pure electric SUV ARIYA Airiya, at the same time, it also announced at the Guangzhou Auto Show that its three brands will comprehensively speed up the strategic layout of electric drive in the first year.

The joint venture brand, which gradually came to its senses, began to speed up the electrification process. Some analysts believe that the joint venture brand has a mature and perfect quality assurance system. At the same time, they have accumulated profound experience in product design, sales network, marketing and after-sales service. Although the layout of the joint venture brand in the electrified transformation is half a beat slow, the speed of catch-up should not be underestimated.

In the case of GM, for example, the company announced that it will launch more than 15 electric models based on the Autenon platform in the Chinese market by the end of 2025, and launch a new software platform next year to comprehensively accelerate the integration of electrification and intelligent network.

In order to achieve this goal, SAIC GM will invest an additional 20 billion yuan in smart electric vehicles and software on the basis of the original plan of 50 billion yuan. So far, SAIC GM's total investment in intelligent electrification, self-driving and other technical areas has reached 70 billion yuan.

We have redesigned the corporate brand logo and promoted it in the core market, looking forward to reaching a new generation of consumers. China is a key market. For Marie Bora, the performance of the Chinese market will be a top priority for GM to achieve its goal of electrification.

The change in the auto industry is not a 100-meter dash, but a long marathon. The completion of the joint venture in which the elephant turns around may show strong resilience.

To some extent, it is too early to conclude that the joint venture car companies are out in the era of electrification. For independent brands, how to make full use of the development window to transform the first-mover advantage into a lasting advantage is an important issue for development.

[full text reference]

[1] "how did Super Mary develop from a workshop intern to GM's first female CEO? ", Luo Shi Business Review, Tian Shanshan

[2] "Toyota electrification Strategy may change", Bunning Studio, Gong Xie, Yang Yuke

[3] "Japanese enterprise" electrification "Why is it out of date", Autobots, Meng Hua

This article comes from the official account of Wechat: che Bai think Tank (ID:EV100_Plus), by Cheng Honghe.

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