Recently, Southeast Motor’s Lancer, the first symbol of the Mitsubishi logo, was announced in Shanghai. At the same time, the Southeast Automotive Exhibition Hall has entered a full-scale renovation period in the past few days. The southeast automobile door that people are used to seeing will be replaced quietly. The brand new “left Mitsubishi, right southeast†logo replaced it.
If Chery and SAIC Motor respectively represent two different models for the development of self-owned brands for automobiles, then can the dual-brand strategy in the southeast be called the "third way" for the development of independent brands?
Dual-brand strategy starts in the southeast
On April 12 this year, Fuqi Group, Mitsubishi Motors of Japan, and Chunghwa Motors of Taiwan jointly announced that Mitsubishi Motors will enter into the shareholders' car in the form of capital injection. As a result, Fuqi Group continues to hold 50% of the shares, Mitsubishi and China each hold 25% of the shares, and Southeast Automotive is transformed into a joint venture.
In the past, Southeast Automotive has been using its own brand “Southeastâ€. After the joint venture, whether the Southeast brand continues to exist has attracted the attention of many outsiders. If, according to past practice, joint ventures would hang up foreign brands because of the direct production of foreign mature products, the self-owned brands that have been painstakingly built over many years in the southeast will be "dispelled." Southeast Motor did not do so, according to Southeastern public relations personnel revealed that since negotiations began in 2003 with Mitsubishi so far, the South East has been insisting on the use of dual-brand, they believe that "dual brand" is a more perfect model. In the end, the dual brands became a consensus among the three parties. Specifically, in the future, the products developed by Mitsubishi and Mitsubishi together with Mitsubishi will use Mitsubishi's brand, while Delica, Fulica, Optimus, and Lingli will be able to use their existing products and the future. The products developed by the Southeast R&D center will continue to use the Southeast brand, while the southeast dealers' showrooms will be tagged with “Left Mitsubishi and right southeastâ€. It is understood that for the purpose of “preserving†the self-owned brand in the southeast of the country, the southeast automobile R&D center building for the establishment of a southeastern brand has started to break ground in July last year. At present, the R&D center building for the first phase of nearly 100 million yuan investment has been basically completed. It is expected to be officially put into use in the near future.
Is the dual-brand strategy a compromise to the market?
The implementation of the dual-brand operation of South East Automotive Industry was highly praised by the industry. Some experts believe that implementing a dual-brand strategy can ensure the immediate interests of the company and also help ensure the long-term interests of the company.
According to Zhang Yu, chief forecaster of CSM Worldwide's automotive market in Greater China, domestic brands have been fairly stable in the development of commercial vehicles, but they are still fluctuating in passenger cars. To achieve the sales target in the southeast, it is necessary to make breakthroughs in passenger vehicles. What is currently plaguing her is that Southeast has already faced the brand's “ceiling†in the passenger vehicle sector. Southeast Automotive related personnel also stated that they had done investigations. When consumers purchase cars ranging from RMB 150,000 to over RMB 250,000, the most important factor to consider is the brand; when considering consuming 100,000 to 150,000 yuan, consider The two main factors are also the brand and the price/performance ratio; only when buying a car with a price below RMB 50,000, consumers consider price as their first consideration.
This is one of the reasons why the sales volume reached more than 80,000 vehicles in 2003 and was reduced to 60,000 vehicles in 2005. Zhang Yu believes that from the brand positioning point of view, the Southeast brand under the jurisdiction of Delica and Fu Lika products of this grade has more than enough, but after the joint venture will continue to import new Mitsubishi, Southeast brands are not necessarily able to control such products. The joint venture between Southeast and Mitsubishi and the use of the Mitsubishi brand can effectively get rid of the current predicament of own brands. In fact, after adopting the dual-brand strategy, Liu Xingtai, general manager of Southeast Automotive, had enough ambition to say “ambition†to the southeast: “We must achieve 150,000 sales in 3 to 5 years and enter the top 10 in the country.â€
Sun Huazi, a research fellow at Xinhuaxin, believes that retaining the Southeast brand, in addition to solving immediate problems, is also an effective way to maintain long-term interests in the southeast. He said: "If we develop the Mitsubishi brand blindly, Southeast China may eventually become the same as most joint ventures, and a self-owned automobile company will become a foreign-brand processing plant, especially when the self-owned brand companies with cost advantages are rapidly rising. The inherent advantages of the southeast may disappear.†The implementation of the dual-brand strategy not only maintains its dominant position in some areas, but also promotes sales of low-end brands with high-end brands.
Dual-brand strategy can only survive in the cracks
However, it is clear that not every joint venture can take the dual-brand route. After the establishment of Dongfeng Nissan, the East Pinnacle, which was originally hung on the Aeolus, was replaced by the Nissan Crankshaft. The negotiation of the cooperation project between FAW and Mercedes-Benz trucks was also caused by the Mercedes-Benz insisting that FAW abandon the “liberation†brand and cause the negotiations to break down. ...
Experts believe that the Southeast can take the dual-brand route and is inseparable from Mitsubishi’s current status in the joint venture and its status at home and abroad. From the viewpoint of equity, Mitsubishi’s 30% stake in the equity and the 50% absolute control of Fuqi Group guarantee that the southeast can retain the southeast, unlike 50% of the cooperative shares of multinationals and domestic companies such as Volkswagen, GM, and Toyota. The brand's right to speak. From the brand point of view, Mitsubishi is not a particularly strong brand, and Mitsubishi also lacks sales channels and market resources in China.
Although in addition to the Southeast, Mitsubishi and Changfeng also have cooperation, but Changfeng also has an absolute right to speak in the joint venture due to a larger proportion of shares. Whether it can expand the stock ratio in Changfeng is still unknown to Mitsubishi. Even if the negotiations are successful, Changfeng is also a company known for SUVs, and does not have the resource advantage of passenger cars in the southeast.
On the contrary, after years of development, Southeast Motor has already had a complete layout including sales and after-sales services. As some experts have said, using distributor resources and network resources in the southeast can speed up Mitsubishi's implementation of its China strategy.
For Mitsubishi, Fuqi is indeed a very good joint venture partner.
It can be asserted that if these factors are not present, Mitsubishi is more likely to adopt the Mitsubishi brand in joint ventures.
However, not every expert agrees with the southeast dual-brand strategy. Some experts believe that: “Hitting the Mitsubishi brand on high-end passenger cars is a renunciation of Southeast Asia’s own commercial resources. Although Mitsubishi’s brand influence in China is not strong, it uses the Mitsubishi brand in the southeast and once it is done, it allows consumers to After knowing Mitsubishi, Mitsubishi's influence will greatly overshadow the southeast. In the high-end market, the Southeast brand will no longer exist."
The expert also pointed out that the Southeast should not expect to rely on foreign brands to save its own destiny. The market predicament is caused by many reasons. It cannot be attributed only to the brand, and companies that rely on others' brands to survive will always have weaknesses. The dual-brand strategy is no different from an anaesthetic. So he insisted that in this dual-brand battle, it was Mitsubishi's victory. "After hanging the Mitsubishi logo, Mitsubishi can share the Southeast's network and vendor resources and conduct brand promotion in addition to equity income."
For the development of self-owned brands, Zhang Yu and Sun Muzi also agreed that it is unrealistic to expect joint ventures to develop their own brands because joint ventures are a whole and they need to share risks and share revenues. Well, we can survive and develop. Therefore, some experts suggested: "Individual brands need time and patience to accumulate, the southeast to take the road of independent innovation, can be set up by the Fujian Automobile Industry Group's own brand project team, justified to develop their own brands.".
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