Major adjustments, BYD's two major sub-brands abandoned the pure direct sales model

CBN

2024-06-19 17:21Posted on the official account of Shanghai Yicai

A few days ago, BYD's Denza Auto and Formula Leopard Auto both announced that they would officially increase the channel model of dealer franchise, with the goal of gaining market share through the dealer network.

As far as BYD's internal brand positioning is concerned, Denza and Equation Leopard are above the Dynasty Network and Ocean Network, and they are looking up. The price of the Denza model on sale is in the range of 250,000 yuan ~ 400,000 yuan, and the model of Formula Leopard on sale is only the Leopard 5, which is priced in the range of 280,000 yuan ~ 350,000 yuan. Previously, the two major brands, with a starting price of more than 250,000 yuan, have been using a direct sales model, but the situation has changed recently.

According to the investment information, DENZA Auto will adopt the channel model of "direct sales + dealer partners" to accelerate the channel layout and fully cover the global market. It is now for the Chinese market car dealer group. The investment requirements mention that dealers need to have a mature team, and the operation and management team can be configured according to the brand requirements; The site is required to be located in the local first and second automobile business districts, with limited high-end luxury brands or mature 4S stores; And it is necessary to have sufficient funds for building stores and working capital for subsequent operations.

Similarly, Equation Leopard opened the first batch of investment, and the current channel planning is about 22 provinces, 4 municipalities and 5 autonomous regions across the country.

Up to now, DENZA Auto has more than 400 directly-operated stores nationwide, covering 149 cities. Equation Leopard has more than 150 directly-operated stores nationwide, covering more than 80 cities.

This year, the sales growth rate of DENZA and Equation Leopard has gradually slowed down. In terms of Denza, official data shows that the cumulative sales volume of DENZA in January ~ May was about 47,300 units, and the sales volume in the same period last year was about 45,700 units, an increase of about 3.4% year-on-year. However, it is worth mentioning that in January ~ May last year, only one model of DENZA D9 was on sale, and in January ~ May this year, DENZA Auto mainly had three models on sale: D9, N7 and N8. Although DENZA added two new models on sale, its overall sales increased by only about 1,600 units, and the D9 was still the main force of sales. In addition, according to the plan, DENZA has set an annual sales target of 200,000 units this year, and the current performance is far from the target.

On the other hand, in January ~ May 2024, the production volume of DENZA will be about 48,200 units, and the number of vehicles on the risk will be about 39,700 units, and the inventory obtained by subtracting the two values has exceeded 8,500 units. Specifically, in February ~ May this year, the monthly inventory of DENZA has exceeded 1,300 vehicles, especially in May, the inventory has exceeded 3,700 vehicles.

Li Yanwei, an expert from the China Automobile Dealers Association, said that at present, only one MPV model, the D9, has brought significant sales, but the MPV model is a consumption upgrade product, and if the Denza D9 wants to maintain stable monthly sales, it also needs to have more running products. For dealer investors, the combination of product price space is unreasonable, and investment is meaningless.

In terms of Formula Leopard, official data shows that the sales volume of this year's Leopard 5 single model in January ~ May were 5,203, 2,310, 3,550, 2,110, and 2,430 respectively, with cumulative sales of about 15,600 units. The Leopard 5 model alone has not yet supported the sales of the entire Leopard car. As for the channel construction of Equation Leopard, there has been controversy since the establishment of the brand. In August 2023, at the ceremony of BYD's 5 million new energy vehicles off the assembly line, Formula Leopard's channel planning announced the adoption of the dealer model, but when Formula Leopard's first model, the Leopard 5, was launched in November of that year, Formula Leopard finally decided to adopt the direct sales model.

At that time, He Zhiqi, senior vice president of BYD Group and chief operating officer of passenger cars, said in an interview with the media that Formula Leopard, Denza and Yangwang are all BYD's high-end brands, and high-end brands must emphasize the connotation of the brand's core culture. The direct sales system can better reflect the company's strategy in all aspects of management. He said frankly that at the beginning of a new brand, because the sales volume is not clear, the after-sales growth is very slow, if the investment is attracted at the beginning, the starting pressure on some external dealers will be very great. The direct sales model can use the power of BYD Group to solve the difficulties in the early stage of the channel.

After going around for 7 months, Equation Leopard, whose sales were less than expected, finally increased the dealer model. Li Yanwei said: "At present, the overall sales volume of Equation Leopard is not large, and the product price is high, correspondingly, there are very few cities in the consumer market that can afford to consume Equation Leopard products. If there is no volume of products, the risk of dealers investing in building stores will be relatively high. "

According to the product plan, DENZA Auto and Formula Leopard Auto will also launch a number of new products this year. In addition to the new Denza D9 and N7, DENZA Auto will also launch three new models in 2024, one of which is the Denza Z9, which has been unveiled at the Beijing Auto Show. Formula Leopard released the "583" hardcore family in April, with a product matrix including Leopard 5, Leopard 8, and Leopard 3, and the planned "2+X" product system has been initially implemented, including the hardcore family, sports car SUPER 9 and other models to be developed in the future. Among them, the Leopard 8 is positioned as the flagship product of medium and large hard off-road, and is expected to be launched in the third quarter of 2024; SUPER 9 IS EXPECTED TO BE OFFICIALLY RELEASED IN 2024.

A dealer told reporters that in mid-June, the industry had received news that DENZA and Formula Leopard were recruiting dealers, and that the sales volume of model products was the indicator that dealers were most concerned about, and the existing market size and future model planning of the DENZA brand were more attractive to dealers. "Compared with the manufacturer's direct sales model, the cost of dealer channels is lower, but dealers also need to be alert to the risk of pressure storage. And the manufacturer's management of the two models is not the same, simply put, the direct sales are their own people, and the dealers are outsiders. "

The dealer believes that dealers choose to join DENZA and Equation Leopard is both opportunity and risk, "this year, many dealers of joint venture fuel vehicles have withdrawn from the network, and if they can take this opportunity to turn to new energy high-end vehicles, they may be able to keep their stores." "

In fact, BYD has rich experience in the channel model of "direct sales + dealers" Dynasty Network and Ocean Network. This time, in order to distinguish the direct sales + dealer model of DENZA and Equation Leopard, BYD has established a direct sales division of DENZA Formula Leopard internally, which is responsible for the management of directly operated stores, and Li Hui, former general manager of BYD's rail business, is the general manager of this division.

It is worth mentioning that, according to BYD's plan to open a county-to-county plan, the dealer model of DENZA and Equation Leopard will sink to the secondary and tertiary markets together with Dynasty Network and Ocean Network to increase sales in multi-level markets.

(Journalist Wu Ziye also contributed to this article.) ）

(This article is from Yicai)