Back to life - this IAA will be the most exciting in years
The International Automotive Venue IAA has had a hard time in the past. After being the world's leading meet & greet spot for the Automotive enthusiasts, more fancy venues such as the CES at Las Vegas or SxSW at Austin seemed to take over. A re-invention of the IAA was overdue, combined with a move from Frankfurt to München. But in 2021, Covid prevented an undisturbed fair, and even more OEMs withdrew. (A hard time for the organizer too, German's national Automotive advocacy VDA, as the IAA is their major revenue stream.)
2023 will be different - five reasons why
Starting on 5th of September, I'm pretty sure: the IAA conference/ happening/ concert/ show/ forum/... will keep the promise: There is so much to discover and discuss. My top five:
China gets at eye level.
Chinese brands are increasingly expanding their offerings in Germany, as the German magazine Automobilwoche points out (which I'm following in this China analysis). Manufacturers like MG are already well-established in the German market, while others like the Chery brand Omoda are on the rise. At the IAA Mobility in Munich, the country will be as present as no other alongside domestic manufacturers such as Volkswagen, Audi, BMW, and Mercedes. The range of vehicles is growing almost daily, and brands like MG, Polestar, or BYD are no longer considered exotic in the streets of Germany.
As the list of supposedly new Chinese OEMs is impressive - many of them have been founded a decade ago, or are just new brands of older companies. Let's have a look on the most important ones (and many are still missing in this list).
However, not all brands will establish a long-term presence in Europe and Germany. In addition to an appealing model range, a sales strategy adapted to the market is crucial. Added to this is a ruinous price war in the home country's electric vehicle market, which is causing some manufacturers to incur significant losses and complicating expensive expansion plans.
BYD
The BYD Atto 3 ist one of the models that the manufacturer plans to use to convince customers in Europe. BYD Seal and Seal U are the next hopefuls coming to Europe. They are directly targeting Tesla's Model 3 - BYD already sells more electric cars worldwide than Tesla. By early 2024, six models will be available in almost all segments. Brian Yang, BYD's Vice President of Europe, is ambitious: "I want to be in the top five in Europe".
BYD has a strong technology capability, especially with its in-house cell manufacturing and the resulting Blade Battery based on LFP technology, which makes BYD a serious competitor in the European market as well. For example, the E-Crossover Atto 3 could pose a threat to VW's ID.4, even though its charging power is a lame duck, and the registration numbers in Germany were still quite modest at 574 by the end of July.
However, unlike the German automakers, BYD typically offers more equipment at the same price. In addition, BYD opted for cooperation with established dealers from the beginning. The Hedin Group has been tasked with establishing a distribution network in Germany and Sweden, with sales locations in larger cities also planned. This secures the Chinese company's market access.
In addition, there are partnerships such as with the rental company Sixt, which has ordered 100,000 electric cars from BYD alone. So BYD is likely to have good chances of establishing a permanent presence in Europe.
MG
Founded 1923 at Oxford, MG is since 2005 part of the SAIC imperium. So no longer British tradition, but full focus on the EV future as a Chinese Brand. MG has made an impressive start in Europe. The first cars came to England in 2019, and then to the European mainland. Thanks to a dense network with over 100 dealers in Germany alone and a portfolio that apparently appeals to customers, the numbers speak for themselves. In the first half of the year, MG was able to increase its sales in Germany to 9,399 units, more than doubling compared to the previous year. According to its own information, MG Motor is the fastest-growing brand in Germany. The best-selling model is the MG 4, which competes primarily with VW's ID.3. The brand competes in the segment that the German manufacturers are increasingly neglecting as they move upmarket. With the backing of the SAIC Group, MG is likely to have a longer breath than some competitors.
Geely, Polestar, Lynk & Co, Smart, Zeekr
The Polestar 2 has sold over 4,000 units in Germany by the end of July. In addition to the Swedish brand Volvo, the Chinese manufacturer Geely is entering Europe with other group subsidiaries. The brand is now established, and the cars are particularly attractive in leasing. Whether this is enough to establish a permanent presence will be seen in the coming years when new Polestar models enter the market.
Lynk & Co. vehicles are widely seen on German roads as they are among the first to push "Auto Abo" models, a subscription model making it a bit easier to rent a car for shorter periods of time than in traditional leasing,. There is only one model available in a few colors and equipment variants. CEO Alain Visser from Sweden emphasizes on every occasion that owning a car is no longer in line with the times. However, the majority of customers see it differently. Only 1,878 vehicles were registered by the end of July. Thus, Lynk & Co. remains a niche brand. And since the brand has been on the market for several years, this is unlikely to change.
Geely also plays a significant role in the restart of the Mercedes subsidiary Smart. As a joint venture partner, the Chinese are responsible for development and production, providing the complete E-platform, for example. Mercedes only contributed to the design. The brand is sold through Mercedes dealers, which increases its chances. However, the Smart #1, starting at €42,490, is far from cheap. While the car offers a lot for the price, whether the brand will be accepted in its new configuration remains to be seen.
With its luxury brand Zeekr, Geely is sending another horse into the race for the favor of European customers. The first models are the brand's flagship, the ZEEKR 001, reminiscent of a Porsche Panamera, with a range of about 600 kilometers, and the ZEEKR X, an urban SUV. These vehicles will make their debut in Sweden and the Netherlands at the end of 2023, with more countries and models to follow soon. The ZEEKR X is based on the same electric platform as the Smart. Geely is, in a way, competing with itself.
NIO
Wasn't NIO the new Tesla? They undisputed build beautiful and sophisticated cars, however, much of the initial enthusiasm has evaporated.
Foto: Nio Nio ET5: The Chinese lowered prices for the market launch in Germany. It is undisputed that Nio builds beautiful cars that are technologically sophisticated. Therefore, the Chinese, led by the energetic founder and CEO William Li, appeared confidently when they arrived in Europe. However, much of the initial enthusiasm has evaporated. Only 394 units of the brand were registered in Germany by the end of July, with 148 ET 7s and ET 5s each, and 91 EL 7s. Because the start was so sluggish, Nio had to lower prices in Germany. The ET 5, for example, was launched in Germany for €47,500, about five percent less than planned. Nio has also had to repeatedly lower prices in its home market in China in the tough competition with Tesla. In addition, there are high costs for the battery swapping stations that Nio wants to set itself apart from other manufacturers and alleviate range anxiety. However, Nio has to bear very high costs for the infrastructure - and the fast improvements on battery capacity and charging speed will make battery swapping even more questionable.
Moreover, as Nio sees itself as a premium provider, competition in Europe from established manufacturers such as Audi, BMW, or Mercedes is particularly tough, while in the mid and low end, the Chinese OEMs are playing with each other.
HiPhi
Vehicle names are always a challenge, so why not starting with something familiar? So X and Z are the first models with which the manufacturer aims to win over premium customers in Europe. The HiPhi X and HiPhi Z can already be ordered in Germany and Norway. The first vehicles are already registered for road use after homologation. HiPhi has opened its first showroom at Munich Airport. More European markets will be announced over the course of the year, it is said. However, little is known about the brand otherwise, such as distribution channels in Europe. Prices for the HiPhi X start at impressive €109,000, while the HiPhi Z starts at €105,000. HiPhi is directly competing with German premium manufacturers such as Audi, BMW, and Mercedes. Whether the brand can establish itself is doubtful. HiPhi is cautious as well. The company aims to sell 600 cars this year and double that number next year.
XPENG
Guangzhou Xiaopeng Motors Technology, which is commonly known as Xpeng Motors, was founded in 2014 and launched its first model in 2018. The company currently sells 100,000 cars per year in China. Now, they aim to make their mark in Europe. Xpeng is already present in Norway, Sweden, Denmark, and the Netherlands. In Germany, the manufacturer plans a major launch as part of the IAA Mobility event in Munich. Xpeng currently offers two sedans and two SUVs, all with electric powertrains. The vehicles are technologically advanced and up-to-date in terms of design. However, Xpeng is competing in the highly competitive premium segment, where even established luxury brands like Lexus (Toyota) and Genesis (Hyundai) have struggled to gain a foothold for years. And, of course, there is also Audi, BMW, or Mercedes.
No surprises, what a surprise!
I've read through most of the webpages of the Chinese, German, French, Swedish, American, Vietnamese, South-Korean, Indian, ... manufacturers. And tried to find the differences in the product line and narratives.
The narratives of new kids mostly start with two clear statements:
Does this translate into something unique, special, differentiating for the customer?
The car configurators tell the truth.
But find out by yourself. Can you spot the differences in the following interiors? And identify the brands at once?
Obviously, the interior designers came to very similar conclusions. They do not always agree on the size, orientation and number of displays. But on the rest, they do.
The same is true if you compare the core feature list of the vehicle lines.
The output of the radical new architectures is still not a radical new experience.
I draw two conclusions from that observation. First, we - the industry, the OEMs, but also the customers and buyers - are more comfortable with a step-by-step approach. Second, the power and possibilities of the new vehicle architectures (compute power, sensors, data pipelines, connectivity, ...) are still to be understood and embraced. New collaboration models are to be established, new profit pools and revenue shares to be set up.
Same same, but different
So, each OEM is adding something on top, giving each vehicle (line) something to love, or at least to remember.
HiPhi Bot: The robot display
When everyone has a display attached to the console - let's invent a robotic arm that can move the display in 3D - and really fast. It's impossible to understand the concept without seeing this in motion (see here on Youtube), and after seeing the video, it's even more difficult to understand. Perhaps you play ping-pong with the display while charging the car. Let's see how customers will adopt this exclusive feature.
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BYD: Your car is a disco
Staging the interior is a core topic for all OEMs: What can we do to make entering the car, starting the car, driving the car, or waiting in the car while charging, a meaningful experience?
Most OEMs understood that the power of all components is not each component by itself, but understanding the vehicle as a system of systems, all connected and thought as connected.
BYD shows a small detail (not exclusive at all to BYD): The ambient lighting is responding to the music.
There is still much to expect in connected vehicle functions. Think of sound systems in combination with the electric drive train, or with video streaming and your adaptive bumpers...
Tesla is joining the IAA.
To be honest, I'm a bit tired of writing about Tesla, again. The mix of revolutionary ideas, a charismatic and ingenuous lead person, toxic at the same time, with over-promising timelines, but extremely well-engineered products, and re-invention of so many core processes, and yet some surprises to come, and the scalability, oh my god. And still, the incumbent OEMs are struggling to compete in many areas, but have also jumped forward.
No, I',m not writing anything on Tesla today. But perhaps you can see a Cybertruck at the IAA, or the Tesla 3 "Highland" update.
BMW is hacking the mainstream.
Remember the BMW #DEE prototype shown at this year's CES at Las Vegas?
On the verge of IAA, BMW surprisingly announced the i3 prototype, showing a first glimpse of the "Neue Klasse" EV architecture (NCAR) which will launch in two years.
Displays are great (and everyone makes them even greater) - BMW's CEO Oliver Zipse announces that the time of the multi-display all-over-the-car era is over. Smart, almost invisible head-up displays in a completely new way are the future.
SUVs are the new standard? Let's start with a classic sedan. With a retro design, a reminiscence to a car that was presented at the 1961 IAA, and saved BMW's future, by the way. (To be fully transparent - the first vehicle launch will be a SUV in X3 size, followed by the Sedan.)
It's great to see so many new ideas, and I'm sure this will have massiv impact. Kudos to Juliane Welter , Dr. Christoph Grote and many more at Munich!
Beyond Autmotive: New centers of Gravity.
If you visit an Automotive event, you want to see new cars, ok. But perhaps you should also visit the booths of the big tech players - they are building the fabric for all the shiny features shown in and around the vehicles.
The influence of companies such as 英伟达 , Amazon Web Services (AWS) , 微软 , 谷歌 , 高通 or development partners such as 埃森哲 can't be underestimated.
No OEM could run neither their products, nor their product development without those partners - and they are key drivers for the innovation speed. So, they are playing and will play a significant role, even if perhaps not standing in the first row on stage.
One of the hot topics will be #GenerativeAI, such as #GPT from OpenAI . Ola K?llenius and Magnus ?stberg announced the integration of #ChatGPT in all Mercedes vehicles - others will follow. A beautiful example on how learning and co-creation between the Automotive OEMs (where everything is always so different) and the "hyperscaler techplayer" world (where everyhing is just a scalable piece of software) can create significant new customer experiences.
Meet us at the IAA!
My colleague Juergen Reers will host a panel discussion this week at Munich, it's a great opportunity to connect with us. Reach out to discuss on your thoughts and challenges.
Juergen Reers?Dennis R?hr?Gabriel Seiberth?Altan Yamak?Marcel Friebel?Wolfgang K?cher?Stephen (Yizhou) Xu?Amarnath Bharadwaj?Raul Kraus?Maxim Rasovsky?Bettina Blum?Christian Levels?Christian Kleikamp?Marcello Tamietti?Anurag Jain?Raghavendra Kulkarni?Fran?ois BARTHET?Hans Loes?Marc Poppner?Markus Frey?Gerd Schaefer?Benno Stützel?Hendrik Dettmering
Owner, Funk Auto Consulting Ltd
10 个月https://www.dhirubhai.net/advice/1/heres-how-you-can-enhance-automotive-sales-through-cakac?trackingId=Z%2FfqTL2fpDorA1HPi8RxgQ%3D%3D&lipi=urn%3Ali%3Apage%3Ad_flagship3_showcase%3B1wnnRBPPQn2HDEWZ3pZ9NA%3D%3D
Strategischer Partner für erfolgreiche Transformation und nachhaltiges Wachstum mit Wertsteigerung durch Digital Business Development und innovative Gesch?ftsmodelle
1 年Great overview Christof Horn which helps to understand the actual developments of the european and chinese oem. It makes you want to visit the IAA to see for yourself! Hope to meet you there.
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1 年Great snapshot of your observations. Appreciate and look forward to meet themnext week.
Great overview. It is easy to loose oversight of the developments w/o experiencing individual products first hand. I tested the ID.Buzz and the ET7/ET5 a few days ago and was surprised good and bad in rather unexpected dimensions. So fully agree, having a physical meeting point for this new portfolio of industry representatives and their approaches is highly overdue. I do however believe, that the vectors of the producers (what else could we do with all the SW capabilities?) and the demand (where can I find a premium midrange bev that is actually available?) still need to be better aligned. The winners of the current fragmentation will be the ones to offer true value add to consumers in a clearly positioned BEV brand - which aparently is so much harder than in ICE times.