Summary of Key Points
The domestic new energy vehicle market is highly competitive, and a phenomenon known as the "new car effect death valley" has emerged. New cars generate significant initial interest upon release, but orders and sales quickly decline, making it difficult for individual models to maintain sustained popularity. To address this issue, Volkswagen Anhui has adjusted its product launch schedule (introducing new models every 2-3 months). The company has reflected on the failures of its previous model, the "Zhongyu 08," and adopted a more focused marketing approach. It has also worked to overcome capacity constraints while acknowledging areas for improvement in its distribution network and talent management.
1. The "New Car Effect Death Valley": Why Can't New Energy Cars Stay Popular for Long?
In short, new cars attract attention at first, with many orders, but interest fades within a few months, leading to a sharp drop in sales. The reasons include:
- Intense Competition: Numerous new energy vehicle manufacturers are releasing products simultaneously, leaving consumers overwhelmed with choices and causing older models to be quickly forgotten.
- Rational Consumer Behavior: Consumers today consider more than just the novelty of a car; they value practical benefits, which a "new" feature alone cannot sustain long-term interest.
- Similar Sales Patterns: While the launch of a new smartphone can account for 60%-80% of sales, the trend is similar for cars. Sales peak at release and then drop rapidly, shortening the product's lifecycle.
2. Volkswagen Anhui's Strategy: Maintaining Momentum with Frequent New Model Releases
Since individual models cannot sustain success on their own, Volkswagen Anhui relies on frequent new releases to maintain brand momentum. The company plans to launch or refresh models every 2-3 months:
- It launched the all-new coupe "Zhongyu 09" in October and updated the "Zhongyu 06" and "Zhongyu 07" in November.
- The goal is to create a steady stream of sales momentum, ensuring that as old models sell slower, new ones take their place, avoiding a sharp decline in overall sales.
3. Three Lessons from the Failure of the Zhongyu 08
Volkswagen Anhui has identified three key mistakes from the unsuccessful launch of the Zhongyu 08:
- Overwhelming Number of Features: The model featured too many claims (such as intelligence, range, and design), making it difficult for consumers to remember the main selling points and leaving a mixed impression.
- Lack of a Strong Marketing Focus: Marketing efforts were spread thinly, without a focal event that could generate significant buzz (like a memorable launch or user stories).
- Complicated Benefits: The benefits offered to customers were too complex, making them hard to understand and utilize (e.g., requiring multiple conditions for point redemption), which was less effective than a straightforward price discount.
4. New Marketing Approach: Focusing on Core Features and Simplifying the Buying Process
Learning from these mistakes, Volkswagen Anhui has changed its marketing strategy:
- Focus on Key Selling Points: Instead of trying to cover everything, the company focuses on a few key advantages in high-selling cities (e.g., the "value for money" of the Zhongyu 06 or the "intelligent cockpit" of the Zhongyu 07).
- Transparent Pricing: Prices are set based on the actual transaction prices at dealerships, eliminating the need for misleading "guideline prices" and discounts.
- Simplified Benefits: The company has simplified benefit offerings, providing direct cash discounts or simple gifts to make them more understandable to customers.
5. Capacity and Infrastructure Challenges
Despite the new strategy, Volkswagen Anhui still faces two major issues:
- Capacity Constraints: There is a shortage of components such as chips and PCB boards, slowing down the production of the Zhongyu 07. The company has implemented measures like point compensation (more points for longer waiting times) and trade-in options to help customers.
- Limited Distribution Network: Its store network is only one-third the size of leading new energy brands, with a penetration rate of 55% in first- and second-tier cities. The company is urgently expanding its presence.
- Talent and Process Improvements: There is room for improvement in team training and customer service processes.
In summary, Volkswagen Anhui's approach focuses on rapid product releases and targeted marketing. However, to truly establish a strong position in the market, it must also overcome challenges related to supply chain capacity and distribution channels. These issues are common among new energy vehicle manufacturers, highlighting the need for a comprehensive approach that includes not only quality products but also effective marketing, reliable supply, and a well-established distribution network.