Shi Dengke: China's luxury car market is changing its overall response to local competition

On February 22, when the first 15 car owners from Beijing got the key to the MINI E, a BMW brand, BMW i, was set up for the electric car. Unlike its rival Daimler-Benz, BYD's plan to build an electric vehicle is different from that of BMW. From the very beginning, BMW chose to go it alone for R&D and actual measurement of its electric vehicles.

As the exclusive brand of BMW Group's new energy vehicles, the user group targeted by BMW i is not the same as in the past. It is more concerned with the novelty and creativity of the design, while emphasizing the driving function. This is a new highlight of BMW's brand strategy this year. When it is gradually landing on the Chinese market, it will undoubtedly continue the localization brand change that “BMW Hyatt” set off in the Chinese luxury car market.

In fact, in preparation for the mass production of electric vehicles, parts suppliers from China have already entered BMW's line of sight. For example, the batteries carried by the MINI E, which is currently conducting road tests in China, have some procurement from Chinese Taiwanese suppliers. BMW Brilliance is also developing electric vehicles for the Chinese market, and related parts and components are expected to be purchased locally.

In the eyes of Steinenko, president and CEO of BMW Greater China, localization will be the "magic weapon" for BMW to compete in this year's more competitive luxury car market. "This is a very critical step." Stango told reporters that BMW's localization process is not only reflected in the research and development of production, brands, and new energy vehicles. It also covers supply, management, and other aspects.

China's auto market competition will be more complicated

"21st Century": Have you ever said that in the future China's luxury car market will undergo great changes, this year's node of this change has not come?

Shi Dengke: Predicting the movement of the Chinese market may be the most difficult thing in the world. We can look at the general direction of development. In the past five years, the Chinese market has seen explosive growth. No one can foresee the rapid development of this market and the scale is so large. Therefore, it is very difficult to accurately predict the market.

Everyone agrees that the Chinese market will continue to develop rapidly, but when it reaches a certain stage, figures are no longer the only thing. Within a certain period of time, an increase of 20% and 25% is a very attractive figure. However, when the base increases and the rate of growth slows down, it is not significant to discuss the figures only.

An important manifestation of corporate change is to focus more on content. The background of this transformation is that the world’s focus has shifted from Europe, the United States, and Japan to China. This change is not only reflected in sales, manufacturing or supply systems, but more importantly, it includes the impact of the Chinese market on global brand R&D. The appeal of the Chinese market has been growing in the global R&D system. This is a profound change, a shift towards greater emphasis on quality and more emphasis on content orientation.

"21st Century": Recently, Volvo has released China's strategy for the next five years and proposed to reach 200,000 new car sales and 20% luxury car market share in the Chinese market by 2015. How do you see this new entrant?

Stangike: This is a change. For the first time in 2010, China's mass-produced car brands began to acquire international brands, such as Geely's acquisition of Volvo.

In recent years, the trend we have seen is that Chinese companies have begun to enter the world stage. They have begun to seek upward development. Most of China's mass production car brands are working in this direction, or they are constantly upgrading their brand positioning, or through acquisitions. To achieve this purpose. These are all new trends and will continue in the future. For me, these are all positive signals, indicating that the Chinese market is gradually maturing.

China is a very young automobile market. The scale is huge. Each brand will focus on this market. With more investment, the competition will become more and more fierce. This competition is multi-level and comprehensive.

In the past, the competition in the Chinese auto market was reflected in the new car; now the competition in auto finance, used cars, etc. has increased again, so a development trend is that the Chinese auto market competition will be more complex, more intense, multi-dimensional, and all aspects. This is why we have been working hard to strengthen the BMW brand, because building a brand is a full-scale job. Companies need a strong brand to maintain and enhance the appeal of customers' emotions, so that customers have very strong emotional appeal. This is very important.

"21st Century": Does this mean that in the new stage of China's luxury car market competition, comprehensive, in-depth localization is a very important competitive weight?

Denko: Yes. This full-scale localization includes both the localization of production and local manufacturing, as well as the localization of supply, the continuous development and expansion of local suppliers, and the localization of products. The more important point is the localization of the management team because you need to ensure that the brand is presented to the local market audience in the right form and in the right perspective. It is difficult to achieve this without a localized team.

Of course, dealer networks also need to be localized. Nowadays, most of our distributor partners are local companies. If you want to have strong competition, you need to have a strong team. In the long run, you need to have a strong brand. Plus the other elements mentioned above, the results will be completely different and you will be able to compete. Winning in the middle.

"21st Century": From the perspective of strategic advancement, is BMW's localization strategy currently achieving the desired effect?

Zeng Dengke: On the whole, we are moving in the right direction, and we are constantly pursuing a fundamental market. This is like a tree. Some trees are younger, and some trees are already deeply rooted. I think we are definitely still a young tree. There are a lot of things we can do, and we can do it with hard work. Now the whole Chinese auto market is very young, although the scale is already the largest in the world.

However, I would like to add that one of the most important tasks in the localization strategy is brand positioning. How do we make the world's consumers with different cultural backgrounds produce basically the same understanding and the same emotional resonance in product design and content? For a management team, it is not an easy task.

Just like what we call BMW's core brand is JOY, which is Yue. The brand's implication here is that when you think of BMW, you can think of a happy feeling. The things that make people feel happy are different in different countries and different cultures. So it is important to be able to understand different cultures in different markets and understand what kind of factors can produce such emotions.

MINI will become an important support for BMW

"21st Century": From the current point of view, the Chinese market, several major luxury car manufacturers have shifted their focus from the product to the brand. Do you think the "BMW Hyatt" brand slogan, the biggest core competitiveness is what?

Zeng Dengke: The slogan of “Yue” is its real power to convey a true emotion, which can truly reflect the quality we represent. Whether it is the concert of the National Stadium or the New Year's blessings of the China Pavilion at the Shanghai World Expo, “Wyatt” expresses the same spirit in different venues.

Consistent, it is a promise we have always adhered to. Therefore, when “Wyatt” plays a role in branding, supplemented by correct localization strategies, the brand's power can be better exerted and presented to the local market and local users in the best way, thus helping the brand to be better anchored in This market.

"21st Century": Will this year give more words to Yue?

Stangike: We do have constant discussions in this area. I think no matter what we do, it is very important to get people involved and to involve as many people as possible. On the one hand, everyone will feel very happy in this process. On the other hand, we also hope that these activities will inspire everyone's thinking about the future. It should not be a moment of happiness, but more to think about the impact on society. What happens will allow everyone to participate in discussions on forward-looking topics at the event. As for the specific form of this activity, we must divide it according to the vehicle system. We are still considering the specific forms of the 3 Series, 5 Series and 7 Series.

"21st Century": This year, BMW's first model launched in China is the MINI family's COUNTRYMAN crossover. Is this a response to Mercedes's previous launch of several A-Class models?

Shi Dengke: High-end brands entering the A-class car market is a development trend. With the continuous expansion of the middle class in the Chinese market, more and more consumers can afford and hope to purchase high-end brands of small cars. And as China enters the automobile society, problems such as traffic jams and parking difficulties have caused consumers to have greater demand for small cars, so the launch of high-end small cars will further expand the customer base of luxury car brands.

Last year, MINI’s sales in China exceeded 10,000, compared with 453 in 2004. This is an important leap forward. This year, we will not stop the MINI brand and will continue to develop, making it an important pillar of BMW's overall business.

The COUNTRYMAN model is a powerful new force in MINI's existing product line, and I think this is just a start and there will be more robust growth in the future, so we have many development plans for the MINI.