Reported by Pulsestacks on May 9, 2024, the term "becoming a minority by buying fuel cars" trended on hot searches before the 2024 Beijing Auto Show.
This is a historic moment.
Data from the China Association of Automobile Manufacturers shows that in the first half of April, the wholesale and retail penetration rates of new energy passenger vehicles in China both exceeded 50%. In 2020, this number struggled to reach 5%.
From 5%, to 14% in 2021, 25% in 2022, 31% in 2023, and now over 50% in the first half of the month. In just a few years, China's new energy vehicles have grown by leaps and bounds, with all of China's automotive industry witnessing and making history.
Unprecedented changes in the times have prompted Dongfeng Group to actively prepare for the future by transitioning to new energy. The Lantu, Dongfeng Nano, and Dongfeng Yipai models have followed suit.
For a car enterprise group with a history of over 50 years, such changes are evident. Chen Hao, member of the Party Committee and Deputy General Manager of Dongfeng Motor Corporation, admitted that these changes are challenging, but Dongfeng's determination to go all in on new energy is even stronger.
"Dongfeng Motors will definitely make a big move, whether it's the first half or the second half, we will always be on the field," said Chen Hao.
In the "sky-high traffic" of Xiaomi's entry into the automotive industry and Lei Jun, along with other industry leaders, engaging in lively live streams, China's automotive sector is getting caught up in marketing by 2024.
In the era of information explosion, influential heads of car companies and more entertaining marketing methods seem to easily attract the "blessing" of traffic.
Chen Hao openly stated that he would also consider doing live streams. "The reason they are so popular, the reason they do live streams, there must be some rationale behind it, which is worth our study."
However, he also understands that traffic equals retention, and ultimately converting into sales is what every car company ultimately pursues.
"Traffic is a social phenomenon that we must value, but we cannot let traffic reign supreme. In this process, we must adhere to what, change what, inherit what – everyone must think it through. If you don't understand, some things will just be like fireworks, leaving a mess behind."
In November last year, Dongfeng Group selected 36 marketing elites from its subsidiaries to join the Marketing Academy's "Alpha Wolf Training Camp" to enhance marketing capabilities.
In the face of the new era, the group is making maximum efforts to build Dongfeng's marketing system, including the talent system behind marketing. "What we lack most now are marketing talents."
Chen Hao emphasized that Dongfeng's Marketing Academy is not solely for cultivating internet celebrities. Key marketing talents must come from within, understand the company's culture, and be passionate. "In a central enterprise, one must have genuine patriotic feelings, a sense of responsibility, and a mission to truly excel in marketing." "We also hope that Dongfeng's internet celebrities are experts in a certain aspect, with independent thinking."
Dongfeng's transformation is not starting from scratch.
In 1969, the predecessor of Dongfeng Group, the Second Automobile Manufacturing Factory of China, was established in Shiyan, Hubei. It is one of the three major centrally-administered automotive groups and a significant player in China's automotive industry.
Dongfeng Group, aiming for a smooth transition, announced the implementation of the Passenger Vehicle New Energy "Leap Action" in August last year, involving management adjustments for Dongfeng Fengshen, Dongfeng Yipai, and Dongfeng Nano.
In summary, the group directly manages the product planning, marketing, and manufacturing of three brands. Each of the three brands with distinct labels complements each other.
At the same time, in terms of organization, the group has shifted to implementing a project-based approach, strengthening management, with each project team being responsible for a specific vehicle model.
Chen Hao explained that around this vehicle model, each group is like a sphere, "doing well will be rewarded, but failing to do so will result in being replaced; this is the internal incentive mechanism."
It can be seen that another important change at Dongfeng is a greater emphasis on the market and on operations.
Prior to this, Dongfeng Group independently incubated the Lantu brand, establishing a project team in 2018 known as the H Business Unit. Presently, Dongfeng has essentially completed the layout of the new energy "three-electric" industrialization, autonomously controlling a series of key core technologies such as the SOA centralized electronic electrical architecture, ten-in-one efficient electric drive, solid-state batteries, 800V+4C fast charging, and Mach electric hybrid PHREV.
Furthermore, Dongfeng has consolidated its research and development efforts by establishing a Research and Development Institute, forming a "1+N" R&D system. "The Institute not only includes passenger vehicles, but also brings together commercial vehicles, facilitating comprehensive modular management."
This year, Dongfeng will launch 13 new energy passenger vehicles and 7 new energy commercial vehicles, with a total annual sales target of 3.2 million units, including a new energy sales target of 1 million units. Over the next three years, Dongfeng Group is also expected to invest 60 billion yuan in new energy initiatives.
Despite the penetration rate of new energy vehicles reaching a new historical milestone, there is still a window of opportunity before the annual retail penetration rate exceeds 50%.
In order to stay in the game, automotive companies are engaging in price wars, intensifying competition.
According to Chen Hao's assessment, after the penetration rate of new energy vehicles exceeds 50%, industry concentration will further increase.
However, in this elimination game, perhaps having the necessary funds is the fundamental key to sustainability, rather than just having excellent skills.
"For Dongfeng Motor, we will make every effort to implement refined internal management mechanisms to enhance competitiveness in costs without compromising quality and customer commitments. In the increasingly fierce competition, we aim to secure our own time and space, and win our own market.
It is worth mentioning that in March this year, the State-owned Assets Supervision and Administration Commission revealed that it will conduct separate assessments of the new energy vehicle businesses of the three major central enterprises, not just focusing on profits. Chen Hao interpreted this as, 'In March, the State-owned Assets Supervision and Administration Commission decoupled the assessment of new energy businesses, hoping that everyone will not bear too much burden. This direction is correct.'
She also mentioned, 'In the end, it still relies on technology and skills to prove one's presence. Other things may just be smoke and mirrors, possibly fleeting.'"
