FAW Toyota is not acclimatized to the soil, or will be overtaken by GAC Toyota
China Net Automobile, November 26th, the entire car market has felt the winter chill, but this is much faster than expected. In stark contrast to most car companies, Toyota’s two joint ventures, FAW Toyota and GAC Toyota, continue to grow, while the performance of the two car companies is also significantly different.
North Toyota slightly increased, South Toyota "runaway"
FAW Toyota’s cumulative sales in the first 10 months were 595,500, compared with 583,000 in the same period last year, an increase of 2.14% year-on-year. Tian Qingjiu, general manager of FAW Toyota Automobile Sales Co., Ltd., said that on the basis of completing the original annual sales target of 695,000 vehicles, it will challenge the level of 71.5-72 million vehicles. Data show that FAW Toyota’s total sales in 2017 were 693,000 vehicles, and the target of 720,000 vehicles this year is slightly conservative.
Different from FAW Toyota’s micro-growth, GAC Toyota has fully opened the "runaway" mode. Its cumulative sales in the first 10 months were 477,000, an increase of 28.2% year-on-year, which caused an uproar in the industry. What’s more staggering is that China Net reporters recently learned from dealers in Beijing that Highlander is still in a hot-selling state with no discounts and a month waiting time.
In 2017, FAW Toyota’s annual sales were 56% higher than that of GAC Toyota. In 2018, FAW Toyota’s sales in the first 10 months were only 22% higher than that of GAC Toyota. Over time, GAC Toyota, which was established four years later than FAW Toyota, has a tendency to "come later". As Toyota’s first joint venture in China, FAW Toyota has a better starting time and treatment than GAC Toyota, and it is also sitting on many blockbuster models that have been famous in overseas markets for a long time, such as Corolla, Crown, Ruizhi, RAV4, and Prado. "FAW Toyota has a good deck of cards, but it failed to play well," a car media colleague told China Net Auto reporter.
Heavy dependence on Corolla
FAW Toyota’s sales are mainly due to the strength of the Corolla. The Corolla sold 313,300 vehicles in the first October, accounting for more than half of the total sales, an increase of 10.74% year-on-year. It is difficult to imagine how FAW Toyota’s sales would have performed without the Corolla. Tian Qingjiu also revealed some concerns earlier this year: a large number of old products have been delisted, and new products have not kept up. Between one advance and one retreat, FAW Toyota is under more pressure than ever. Unexpectedly, it has been listed for 4 years, but the Corolla can achieve such good results in 2018, which undoubtedly makes FAW Toyota breathe a long sigh of relief.
Near the end of her career, Corolla has a new spring, and there are even more "God assists" from her opponents. As a regular customer who used to rank among the top ten in the car market, Buick Yinglang, Honda Civic, and Ford Focus have disappeared from people’s sight in 2018. Yinglang’s malaise is known to all, Buick has been worrying about the three-cylinder engine all year; Civic is mired in the "throttle" quagmire of the 1.5T engine; Fox has lost a good game because the iteration speed is too slow and he does not want to make progress. Fortunately, after a period of recovery and adjustment, the adverse effects of various companies are slowly dissipating: consumers’ acceptance of three-cylinder machines is gradually increasing; Honda’s "throttle" recall has also restored market confidence; Changan Ford’s new generation of Focus is finally "long overdue".
With Corolla’s competitors on the recovery track, they will also re-enter the vision of mass consumers. The latest data for August, September and October show that Corolla’s sales have fallen back to below 30,000 for three consecutive months, no longer as crazy as in the first half of the year. It is unknown how long the "veteran" Corolla’s hot-selling situation can last.
There are also RAV4 and Vios, which are not as eye-catching as Corolla, but are also important components of FAW Toyota. But in the face of fierce competition, they are destined not to have too eye-catching performance.
Good hand, bad hand.
FAW Toyota has put more energy into the new Yize model this year. Tian Qingjiu once described Yize as "unprecedented appearance, unprecedented driving fun, and unprecedented safety". In order to present the "younger" element, Tian Qingjiu, the sales boss of a traditional car company, took off his suit, broke dancing on Douyin, and spared no effort to promote it. However, due to the shortcomings of the rear row space, positioning and other factors, Yize did not become as popular as expected, and sales were not sullen. In comparison, the Dongfeng Honda XR-V, which has been on the market for a long time, sold 18,802 units in the latest October, achieving a year-on-year increase of 145.39% and a month-on-month increase of 14.38%. The results are exceptionally dazzling.
In recent years, under the favorable situation of FAW Toyota holding a good card, it is not uncommon to fail to play the card well. The product quality of Landcooluze, Ruizhi, Crown 2.5L V6 models, Prado 2.7L and other models themselves is very good, which is also evident from its high value retention rate in the used car market. However, these "good" models eventually went to the fate of discontinued production.
FAW Toyota’s frustration is not unrelated to its vague positioning of the model: the rear-drive model Ruizhi actually learned from the opponent to play "drift", and the Crown V6 deviated and gave up the "administrative business" positioning that should have been adhered to, which made consumers feel at a loss, and then delisted. In a huge contrast to FAW Toyota, GAC Toyota does not have many good cards in hand, but every card it plays is extremely lethal. Highlander and Camry are still very tight.
Will the Asian dragon take off?
The most painful thing for FAW Toyota is that its overseas successful models such as Ruizhi and Crown have suffered serious acclimatization in China, and FAW Toyota has been unable to open the door to the medium and large car market. Therefore, FAW Toyota pinned its hopes on the new Asian Dragon just released at the Guangzhou Auto Show. Tian Qingjiu said that the name "Asian Dragon" represents a spirit of soaring and striving for progress.
The Asian Dragon is built by sharing the Lexus ES platform and will target the B + market. The wheelbase is the same as the ES at 2870mm, which is 45mm more than the Camry, and the positioning will naturally be higher than that of the Camry. Tian Qingjiu bluntly said: "The Asian Dragon is to provide consumers with a car experience above the B + level." In addition, unlike the crown’s front and rear drive emphasizing texture and business administration, the Asian Dragon’s front front drive pursues cost control, comfort and large space, while the pre-sale price of the 4S store started by FAW Toyota instantly extinguished the enthusiasm of consumers. The price of its 2.5L fuel version starts from 260,000, and the price of the 2.5L hybrid version starts from 270,000.
First of all, the Asian Dragon, which starts at 260,000 yuan, is not cheap in front of traditional B-class cars such as Accord and Camry. The current market end point price of Accord, which is equipped with a 1.5T engine, has dropped to more than 150,000. Even the starting price of the hybrid version is only 200,000 yuan. In the increasingly rational environment of consumers, it seems clear how the wold-be user will choose. Compared with the Camry brothers, the advantage of the Asian Dragon is also not obvious. For the time being, regardless of the 2.0L entry-level model, the official guidance price of the 2.5-liter Camry model of 219,800 yuan is 40,000 yuan less than the Asian Dragon.
What’s more, a number of second- and third-tier luxury brands of medium and large sedans will further form a siege against the Asian Dragon. The Dongfeng Infiniti Q50L with an official guide price of 26.98-39 9,800 yuan currently has a profit margin of about 50,000 yuan at the market end point. Not only that, luxury cars such as Cadillac XTS, Jaguar XEL, Volvo S60L, and GAC Acura TLX-L have all put down their lofty stature in the face of fierce competition. In the situation that the brand and product strength are not obviously dominant, FAW Toyota Asian Dragon may plant the seeds of failure because of "excessive self-support".
Conclusion:The FAW Toyota, which grew against the trend in 2018, did not look bright on the surface. The unclear positioning of the model and the bad brand were all mistakes made in the past. In the future, how much "old capital" FAW Toyota can withstand the tossing? And this may affect whether GAC Toyota can achieve a counterattack against FAW Toyota.