Guangzhou Azalea is keen on "excessive marketing", but its sales performance has been poor.

Recently, a marketing poster about battery safety in new-energy vehicles sparked controversy.

On Oct. 21, Liao Bing, founder and CEO of Guangzhou Automobile Azalea, publicly promised through social media that the brand's vehicles will be fully compensated for the entire vehicle if it catches fire due to the Ningde Times 811 battery; and advocated that "all automobile manufacturers in the industry that use Ningde Times batteries **** the same commitment to protect the rights and interests of users."

This "unauthorized" bundling of other manufacturers for marketing practices immediately attracted questions. In order to calm public opinion pressure, the next day, Guangzhou Automobile Wei Lai commitment to the content of the adjustment of the "Ningde Times 811 battery" and industry initiatives to remove the relevant words, commitment to the battery due to fire vehicles whole car full compensation.

October 23, Guangzhou Automobile Wei Lai issued an apology for this marketing event, saying that it should not have been rashly initiated without thorough consideration of all the new energy batteries used in the industry with the automotive industry *** with the same commitment to full compensation for the entire vehicle. Previously, the whole car full compensation commitment is only for the Guangzhou Automobile Azure to their own users of the commitment, does not involve any friends, suppliers.

From the other side, the frequent occurrence of fire accidents in new energy vehicles may indeed become a major shackle on the development of the industry.

Compensation "commitment" controversy

New energy vehicle sales are growing rapidly at the same time, fire accidents occur repeatedly.

During the 2020 New Energy Vehicle Conference, Cao Qi, deputy director of the Fire and Rescue Bureau of the Ministry of Emergency Management, introduced that in recent years, the upward momentum of the number of fires in new energy vehicles is relatively obvious. According to incomplete statistics, more than 560 new energy vehicle fires occurred in the country in 2019, and the first three quarters of 2020 have reached 700, involving vehicles of almost all new energy vehicle brands.

Based on consumers' general concern about the potential risk of fire in new energy vehicles, GAC Azure has put forward the promise of "full compensation for the entire vehicle" in the hope of creating a brand image that protects the rights and interests of users, and reaping the public's goodwill.

However, the fact that GAC has launched this initiative without the consent of other automakers and suppliers is a sign that it's trying to "belittle its friends and create its own hype," which is a form of over-marketing.

In the industry's view, the content of the commitment of the Guangzhou Automobile Welcoming also has a lot of loopholes: new energy vehicle fire causes a variety of reasons, the accident investigation process is complex. The new energy vehicle national regulatory platform big data safety monitoring results report shows that since May 2019, in the vehicles that have been identified as the cause of the fire, 58% of the new energy vehicle fire originated from the battery problem, 19% of the vehicle fire originated from the collision problem, there are also part of the vehicle fire originated from the immersion of the water, parts and components failure and other issues.

Industry insiders believe that the power battery is the main cause of new energy vehicle fires, but also need to distinguish between the supplier to provide the electric core failure, or vehicle manufacturers to lead the design of the battery module, battery pack problems. Therefore, in the marketing poster of Guangzhou Automobile Weilai, the responsibility for the vehicle fire is directly assigned to the supplier and the 811 battery, without mentioning the other causes of the fire and the solution to the practice, a little bit "hasty".

It is worth mentioning that, on October 16, the fifth power battery application of the International Summit, Ningde Times Technology Co., Ltd. chairman of the board of directors ZengYuQun said, through technological research, the company independently developed 811 ternary battery system can be "easy" through the heat diffusion test, do "never fire".

Marketing 'out of the box' for eyeballs

It's not the first time GAC Azure has relied on marketing gimmicks to boost brand awareness.

In August 2020, GAC Azalea released the bill of materials (BOM) for its model ?HYCAN?007, including the names of suppliers and purchase prices for interior and exterior trims, chassis, bodywork, three electrics, the intelligent network, as well as research and testing, manufacturing, logistics, and other aspects of vehicle manufacturing. Statistics show that the total cost of its hardware is $3,000,024, while the price of the model is $303,000, with a profit margin of less than 1 percent.

Liao Bing said the company's products will not have a combined hardware profit margin higher than 1 percent. If it exceeds that, the entire excess will be returned to the user.

In the automotive industry, there is no lack of third-party organizations to research the way to publish the vehicle BOM list, but the host factory took the initiative to publish the BOM list is extremely rare.

In addition, the Guangzhou Automobile Wei Lai control hardware profits, perhaps to a certain extent reference to the Internet model. 2017, Xiaomi has promised that the hardware of its products will not exceed 5% of the integrated net profit margin, if more than the part will be returned to the user.

In this regard, Liao Bing's explanation is that under the trend of intelligent network connection, the automotive value chain has been reconstructed, and the value of hardware will rapidly decline, while the value brought by software and services will be greatly improved. Therefore, the Guangzhou Automobile Azure to be the "first software and hardware integration of intelligent travel ecological services company".

GAC's series of marketing tactics have gained widespread attention, but some industry insiders believe that releasing the BOM list is equivalent to showing its cards, exposing GAC's bargaining power, and putting other suppliers and OEMs in a passive position, which is not in line with business norms.

There are also practitioners who, by analyzing the BOM information and prices, believe that their authenticity is doubtful and can hardly stand up to scrutiny. In addition, focusing publicity on material costs is also likely to mislead consumers about the overall cost and value of a car.

Sales "pulling up" has not been realized

Tianyecha information shows that Guangzhou Automobile Azure New Energy Vehicle Technology Company Limited was established in April 2018, with a registered capital of 500 million yuan, by the Guangzhou Automobile, Azure and the company's team of three **** the same shareholding.

In addition to capital, GAC and Azure also provide manufacturing, vehicle design and software technical support respectively, but do not participate in the actual operation of the joint venture company, which is independently operated by the GAC Azure team.

This "asset-light" mode of operation can help GAC reduce financial pressure, but it also means that its products lack core technology and design features, and its market positioning is awkward.

In May 2019, GAC Azalea unveiled its "HYCAN HYCAN" brand, and its first production product was unveiled at the same time.

In April 2020, GAC Azalea's first pure-electric SUV model HYCAN?007 was officially launched, and the first delivery was completed in May. Official information shows that the HYCAN?007's post-subsidy retail price starts at 259,800 yuan, with a range of 523 kilometers to 643 kilometers.

Previously, Liao Bing set a sales target of 15,000 units for the HYCAN?007 in 2020. After the launch, the model failed to gain recognition from consumers, and its performance was very low. Data show that by the end of September, the cumulative sales of GAC Azure were only 562 units, with an average of more than 100 units sold per month, which is on the edge of the market.

Additionally, there has been no progress in financing for GAC Azure since its inception, and there is no indication that shareholders are willing to continue to invest more. At present, monthly sales of GAC New Energy and Azure have reached thousands of units, and the business situation is looking up. Under these circumstances, it's hard for the two companies to be motivated to lend a helping hand to Guangzhou Auto and Azalea.

Industry insiders believe that the new energy automobile market resources to accelerate the concentration of the initial economies of scale, want to rely on marketing to win the market model has long been ineffective. Compared with the Internet mode of manufacturing concepts, manufacturing gimmicks, Guangzhou Automobile Azure should be more focused on the polishing of the product.

Automotive industry analyst Zhang Xiang believes that the sales promotion model of Guangzhou Automotive Azure is still a traditional car company's routine, and there is no competitiveness in terms of price, brand awareness, and service. In addition, the current consumers are more concerned about the product experience and service, Guangzhou Automobile Weilai marketing techniques have long been obsolete, although in a short period of time to attract some attention, but in the long term on its sales can not play an essential role in promoting.

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