On November 17th, the 21st Guangzhou International Automobile Exhibition officially opened. The development of smart cars and new energy vehicles is not only a revolution in transportation, but also a change in lifestyle and mindset. With the continuous upgrading of competition in new energy vehicles, more new products and technologies will appear before the public. This year’s Guangzhou Auto Show will take “New Technology, New Life” as its theme, showcasing the latest technological achievements brought about by the development of smart cars, as well as the brand new changes it brings to consumers. In response to this, different executives expressed their views. Li Xinyang, the product manager of Ideal Car MEGA, said, “Through a completely new form, a completely new architectural design, including a completely new spatial concept, and the 5C technology behind it, a complete system of handling performance, we have really redefined the MPV category, because in every aspect we see pain points in the industry, all of which have been overturned.”
The following is a transcript of the interview Sina Auto: Welcome, Mr. Li, to our Sina interview. This year’s Guangzhou Auto Show is at the end of the year, which is actually quite suitable for a summary of the 2023 year. First, could you please introduce the ideal models we have at our booth this year, and what are the highlights? Li Xinyang: This year, we still have three very popular models, L7, 8, and 9. At the same time, we are showcasing MEGA for the first time, which is our first pure electric model. Sina Auto: In fact, MEGA has been very popular on Weibo before, and everyone has been discussing it. Ideal has also carried out a series of interesting promotions for it. Can you introduce some specific highlights of MEGA to us, as this is the first time everyone is seeing it offline? Li Xinyang: Yes, maybe everyone will notice that MEGA is very different from the existing MPVs or electric vehicles on the market. In fact, behind this, we have a very complete thinking. Ideal has always been making cars for family users. This time, we hope to make a car for real large families. For large families, what they need is space and safety, which is very important. At the same time, there are requirements for comfort and intelligence. We have seen that there is actually no really good product on the market that can meet the needs of families. So, through a completely new form, a new architectural design, including a new space concept, and the 5C technology behind it, as well as a complete set of handling performance, we have truly redefined the MPV category. Because in every aspect, we have seen that the pain points in the industry have been overturned. The most visible change is in the experience of space, and the second point is its safety. This safety is not only the safety tested, but also the front, side, and rear collision standards are all built according to the highest standards of luxury cars. Another point is intelligence, but we may reveal more content at the December press conference, so stay tuned for more details on intelligence. You will see some amazing iterations in terms of intelligence. Sina Auto: Is the interior still confidential for now? Li Xinyang: Yes, let’s give it a few more weeks. Sina Auto: Okay, we will continue to pay attention. This is a very popular car model. The next question might be related to our market and sales. Ideals’ sales performance has been very impressive since the beginning of this year or the second half of this year. What strategies do we have to support this kind of sales? Li Xinyang: I think first of all, in terms of opportunities, Ideal has already achieved high penetration rates in some first-tier and second-tier cities, and we often see the iconic Ideal logo on the streets. But we still have a lot of opportunities. The first is to focus on city tiers. As I mentioned earlier, the penetration rate in first-tier and second-tier cities, including emerging second-tier cities, is quite high. We already have a market share of over 50% in the SUV market in cities above the third tier. But when it comes to third-tier and fourth-tier cities, there is still a huge market space. Another perspective is from the brand’s point of view, looking at new energy. New energy vehicles priced above 200,000 yuan (27990$) account for 15.4%. In the overall market, if we look at SUVs priced above 300,000 yuan (41990$), the combined sales of BBA brands is about 60,000 units. If we look at all the cars from BBA brands, it’s about 90,000 units. Our current sales are 40,000 units, so we believe that with a significant shift to electric vehicles, there is still a lot of market space. In terms of strategy, we currently have 300 stores, including 100 in third and fourth-tier cities. Our next step will be to accelerate our layout in these cities, and by the end of this year, we may reach 110 stores. This will allow us to meet more market demands across regions. Sina Auto: Third and fourth-tier cities also have a lot of potential, perhaps not as competitive as first and second-tier cities. Li Xinyang: Yes, from a channel perspective, this is also a factor. How to expand our good channels. Sina Auto: Okay, this year, whether it’s price or technology, the entire market is actually very competitive. Everyone is in this state. For example, in the MPV segment, our MEGA will also encounter many competitors, whether it’s Volvo, Xiaopeng, or other new energy market players. In this direction, do you think we still have a lot of room for competition? Li Xinyang: I think competition encompasses many layers of meaning. If we’re talking about the speed of product launches, I believe it will continue for quite some time for two reasons. The first reason is that the total market size is expanding. In terms of new energy, our market penetration is currently at 35%, possibly reaching 40% by the end of the year, and over 50% next year. This represents a huge increase in market volume, but at the same time, as we reach the late majority of consumers, their choices become very focused. It becomes a competition where only the top companies can survive. This is the competitive situation we see. From a competitive strategy perspective, we need to excel in efficiency, product quality, overall delivery, and sales experience to be the best in the industry. Besides this, why do we think “competition” contains many meanings? Apart from the competition itself, I believe there are structural and innovative opportunities, such as the MEGA that we mentioned earlier. Although MPVs are common, this new design architecture brings revolutionary innovations in safety, driving, space, and charging. From the perspective of intelligence, we believe there will be a significant revolution in assisted driving and in-car entertainment interaction in the next two years. Based on these points, we believe there are still many opportunities in a highly competitive environment, and we hope to seize them with our products. Sina Auto: The last question is more open-ended. Although new energy has been developing for many years, I think there are still many surprises that many car companies will bring us. It hasn’t reached its peak yet. So, what do you think are the greater potential for innovation in new energy, intelligence, and the changes in sales channels and overall marketing strategy brought about by the changes in the market? Li Xinyang: In fact, we see this matter as breaking through the milestone of 300,000 units in sales this year, which is quite crucial. It determines that we have done well in several aspects in the 0 to 1 stage, and we have gained a certain advantage. But in the next stage, we believe that it is a relay battle of the group army, and we cannot have any weaknesses because the height at that time is determined by the weaknesses. So internally, we will divide the entire enterprise into three perspectives. The first is the overall company, including user perception of the brand, internal corporate culture, and enterprise strategy. The second is the products, R&D, sales, production, manufacturing, and user experience. The third is the underlying support, such as IT, processes, finance, legal, and accounting. We believe that these nine are all indispensable, because no million-level car company can only excel in certain areas. So when these nine are deeply cultivated, you will find that some external variables, such as channel changes and product innovations, are based on the system’s capabilities, rather than just chasing after a hot trend. Sina Auto: In the beginning, the competition of new forces, as you said, had several product highlights or a very impressive product, but in the second half of the competition… Li Xinyang: It’s a group army war. Sina Auto: Yes, it’s more about considering mature models. Li Xinyang: Because if a car company uses the sales volume of one million units multiplied by the price of 300,000 per car, it’s actually a terrifying number. It would be a giant enterprise in any industry. This giant enterprise, like a car, needs a solid chassis to run far. Sina Auto: So we think the focus on new forces may slowly shift from products to other more comprehensive Li Xinyang: It’s a multi-dimensional perspective Sina Auto: Thank you, General Li