Market share is concentrated at the top.

The Chinese automobile market has continued to recover in the past few years, and the country's economy is still in the midst of a major economic downturn. The main reason for this is the fact that the company's sales figures for September have been released one after another, and most of the major car companies have achieved growth.

The independent three strong Geely, Changan and Great Wall performance is more prominent. Geely's September sales of 126,400 vehicles were up 11 percent year-on-year; Great Wall's sales of 117,800 vehicles were up 18 percent year-on-year; and Chang'an's Chinese-branded vehicles sold 153,000 vehicles in September, up 31.9 percent year-on-year.

The think-tank learned from the China Association of Passenger Vehicle Dealers (CAPD) that the nation's passenger car sales rose about 9 percent in September. In other words, the top three independent brands all outperformed the broader market. Overall, however, China's independent brand cars still face considerable challenges.

"It's still a difficult year for independent brands. In terms of price range, the low-end car market below 80,000 yuan has been hit hard this year, and many independent brands have suffered as a result." On October 12, Cui Dongshu, secretary-general of the National Association of Passenger Cars, said in an interview with Think Tank.

But, from another perspective, the pattern adjustment is also happening within Chinese brands. The pace of market recovery for the head enterprises is significantly faster than that of the second- and third-tier enterprises, and the differentiation between car companies is gradually intensifying. Although the independent three strong maintain a better growth momentum, but also face a number of development problems.

Autonomous share to the head of the concentration

In China's auto market downturn and the epidemic and other factors, China's auto market is experiencing structural adjustment. One of the most obvious features is the upgrading of consumption, with the share of the luxury car market rising, while the share of independent brand cars, which focus on the middle and low-end markets, is being squeezed.

On the whole, China's auto market has started to pick up since April, and mainstream independent brands have also begun to recover gradually. However, within China's independent brands, the market performance of the headliners is significantly better than that of the second- and third-tier companies.

From September's data, the market growth rates of the top three independent brands all exceeded 10 percent. Although the second echelon of car companies basically also realized year-on-year growth, but the growth rate is significantly lower than the head of the three strong. According to the data, SAIC passenger cars sold 60,400 units, up 5.8 percent year-on-year; BYD sold 42,200 units, up 3.6 percent year-on-year; and GAC passenger cars sold 38,000 units, up 12.82 percent year-on-year.

As for companies in the third tier, sales have not made much headway in the overall rebound of the auto market, with most still struggling on the edge of life and death.

In this case, the gap between the top three and the second tier is also widening. "There is a clear difference between the consumer population of joint venture and independent, independent brands are still internal competition, and the direct competition between the head enterprises is very fierce. The growth in sales of the head enterprises is more or less the market share taken from other autonomous car enterprises." Cui Dongshu told Think Tank.

A dealer of independent brands told Wikujun that the internal conflict between independent brands is very intense, in fact, the quality and positioning of each company's car is similar, and the price is also very similar, so we are all grabbing the same group of consumers.

"Previously, when the market was growing rapidly, independent brands could sell as long as the price was cheap. However, with the quality and reputation and other factors gradually revealed, this part of the consumer, but also began to be more willing to buy the head of those brands of cars, some 'cottage brand' quality is really not good, the car has not progressed, and can not be sold." The above dealer told Think Tank.

It is worth mentioning that among the three strongest independent brands, Changan Automobile's performance is the most outstanding this year. Chang'an Automobile from the second half of 2017 began a significant decline in sales, after two years of hibernation in the trough, Chang'an Automobile in September this year, sales countered the Great Wall and Geely, back to the independent monthly sales champion.

Changan Automobile's strong rebound, thanks to several main models together. Specifically, sales bear CS75 series sales of 26,000 units in September, has been several consecutive months to break the 20,000 mark; ? The sales of the Yidong series reached 18,000 units, and the sales of the CS55 and the newly-launched UNI-T also exceeded 10,000 units.

During the Beijing Auto Show, Zhu Huarong, chairman of Chang'an Automobile, said in an interview with Think Tank that the reason why Chang'an Automobile has achieved such results this year is closely related to the implementation of the strategy of long-term adherence to technological investment and the initiative to transform into an intelligent mobility technology company.

Beginning in 2017, Chang'an Automobile began to open its own third venture, and during the three years, although Chang'an Automobile was in the doldrums, but from this year onwards some of the results after the transformation began to appear.

From the styling point of view, Changan Automobile got rid of the previous external "cottage" label, to create its own family design language; in terms of the power system, self-developed Blue Whale engine is an important support for the best-selling models such as CS75?PLUS; in addition, Changan Automobile for many years in the field of intelligent network connection of high amounts of R&D investment, also reflected in the models.

"It turns out that long-term adherence to technological investment, intelligentization, networking, and transformation to a technology company, a set of strategies that have been gradually strengthened in the process of implementation, and from technological innovation is quickly realized to product innovation." Zhu Huarong said.

The independent three strong *** with the challenge

Despite China's independent brand three currently maintains a better growth momentum, but the three companies have shown a strong sense of worry.

"Can Great Wall Motor survive next year? Life hangs in the balance." In July, Great Wall Motor Chairman Wei Jianjun used such a self-question-and-answer question with a sense of anxiety in a microfilm promoting Great Wall Motor's 30th anniversary.

Zhu Huarong also told Think Tank that only a handful of independent brands will survive in the future. The first world would not have needed to use so many brands, according to the principle of two or eight, 80% of enterprises will be sacrificed on the way forward; at the same time, the epidemic accelerated the economic downturn, the economic situation and the competitive landscape accelerated the speed of market elimination.

An Conghui, president of Geely Automobile, also said bluntly to Think Tank during the Beijing Auto Show: "This round of adjustment of the global automobile industry must be a big reshuffle, and there may not be me if there is you, because the market is so big. Some enterprises have a heavy historical burden of transformation, and without the capital and ability to invest in transformation, they may gradually go downhill."

The elimination game of the market will let some players out, but at the same time will also provide opportunities for some enterprises, the key lies in the ability to consolidate market position and seize new opportunities. At present, the three headline companies are transforming at a significantly faster pace than other independent brands, while the independent three are also shouldering the burden of representing China's automotive industry to compete head-to-head with joint ventures.

The strategies of the three companies are basically similar, focusing mainly on seizing the opportunities brought by the development of automotive intelligence, and realizing brand renewal and brand upward mobility.

At the 2020 Beijing Auto Show, Changan, Geely and Great Wall all tried to present a completely different brand image to the outside world, and placed great emphasis on the layout of automotive "software". For example, Geely unveiled its new "Vast" architecture, which emphasizes software development capabilities; Great Wall Motor is also focusing on the development of three major technology platforms: lemon, tank and coffee intelligence.

"Our past history of defining the automobile in terms of hardware functions has been difficult to surpass. However, in the new round of industrial change, technological progress, chip technology, cloud computing, big data, Internet technology and other mature and rapid development, will reorganize the pattern of the entire automotive industry. Inside the new reorganization pattern, perhaps it will happen that the backward become advanced, and the advanced may become backward." Zhu Huarong said.

But the shortcomings of the head autonomous three are also very obvious. In the field of new energy vehicles, Geely, Changan and the Great Wall are currently developing less smoothly, very different from its position in the fuel car market.

Despite the fact that Geely and Great Wall have set up two pure electric brands, Geometry and Ola, respectively, sales haven't gotten much better. Changan New Energy, despite its early start, has become less and less vocal in the market over the past two years.

Zhu Huarong admitted that Changan Automobile has encountered some difficulties in the process of electrification transition. Changan Automobile is facing the pressure of listed company indicators, and needs to coordinate the relationship between current economic pressure, finance, earnings and long-term development investment.

"With the downturn in China's auto market over the past two years, the three companies themselves are facing big operational challenges, and may have put more effort into fighting for fuel-vehicle market share, and the pace of the electrification transition has been affected to some extent as a result." An automotive industry source told Think Tank.

For China's traditional automakers, the process of transitioning to new energy vehicles generally carries a heavy burden. As a result, the pace is slower than that of Tesla and new car-making forces such as Azure and Xiaopeng, both in the creation of new-generation platforms, the shaping of electric brands and the creation of business models. In addition, with the entry of Volkswagen and other joint ventures, the market share of local new energy vehicle enterprises may be further eroded, and the independent three want to grab the market cake, full of challenges.

This article was written by the author of AutoZone, and does not represent the viewpoint of AutoZone.