Entering Joint Venture from Low-end Markets Can Really Promote Autonomous Brand Vehicles

This week the automobile industry is blowing. In Beijing, as the largest automobile joint venture company in China, Dongfeng Limited has issued an ambitious new medium-term plan; in Hangzhou, Dongfeng Yulon’s first model, Nazhi Jieda’s 7SUV officially went offline, and announced Dongfeng’s second-largest autonomous passenger vehicle strategy. At the same level, Guangzhou Dongfeng Nissan laid the groundbreaking ceremony for its engine capacity expansion project and released its mid-term business plan for the period 2011-2015.

The significance of this shareholder's wind to the auto industry is that it is not only another wave of rapid expansion, but also a deeper level to the ultimate pursuit of establishing a new brand and promoting autonomy.

In addition to the successful completion of two medium-term plans for the third power of the second 3 and the second power of the third, the Dongfeng Limited new medium-term plan aims to increase the annual sales by 1 million units and complete the expansion of a series of production bases. However, Dongfeng chairman Xu Ping seems that this is not the only goal. He believes that another principle of Dongfeng’s limited new medium-term plan is to pay more attention to the improvement of research and development capabilities. The international strategy of the joint venture company also includes the need to establish its own brand and new energy vehicles. “It shows that while strengthening the joint venture business, Emphasis on self-development."

"Independent development" was when the East Wind almost took out the entire family and the Nissan joint venture. It could not yet say that the internal demands of exports were also the ultimate goal of the entire automotive industry. After the big market, this ultimate goal has now surfaced. Nissan's Ghosn seems to have an understanding of this, he stressed that we must strengthen the localization of the joint venture company, and build a new brand Kai Chen.

The joint venture's own brand, Qi Chen, has become the focus of Dongfeng and Nissan's new development plan. Judging from Ghosn's formulation, he has already deeply felt the Chinese government's new policy appeal, namely to strengthen the R&D capability of the joint venture company and launch the joint venture's own brand. The most obvious is the transformation of Nissan’s electric vehicle strategy in China. Ghosn believes that the introduction of the Nissan LEFT electric vehicle alone will not be successful because it may not receive the policy consumer incentives, but relying on the new brand Qichen of the joint venture company to develop electric vehicles can get the support of the government.

Judging from this reaction, the currently adopted joint venture brand strategy seems to have achieved the effect of policy design, that is, forcing joint venture foreign companies not only to launch products in China, but also to strengthen localized R&D and build new brands. This is also in line with The demand for a new round of expansion of international car companies in China. However, the price it pays is that the joint venture's self-owned brands entering the low-end market will have an impact on the existing local brands. This is also the focus of the opponents attacking the joint venture's own brands.

Ghosn stated that Nissan still wants to be humble, and he believes that the launch of Kai Chen has no intention of hitting the market of local brands. In fact, the joint venture's own brand is a repair to the original "market for technology" policy design. In the early days when international brands quickly entered the Chinese market, some local brands survived in the jungle. Now that the self-owned brand of the joint venture will impact the self-owned brand, it can be seen as a kind of worry. Its mistake is that the impact will always be thought to come from a strong external. In fact, without competition, it is impossible to nurture truly competitive local brands. This is a prerequisite for meeting the principles of market economy. However, in terms of policy design, the government should really consider how to promote the development of local brands in adapting to competition rather than simply supporting them.

The key lies in whether local companies are up for the game. For example, Dongfeng clearly categorizes the joint venture's own brand as a strategy, not a strategy, and regards it as one of the three major levels of developing its own brand. It clearly requires that the joint venture's own brand should be built separately, not only in the low-end market but also in the high-end market. . Only after such a strategic arrangement is it truly possible to promote autonomy. Only by practicing under a good strategic arrangement can we really learn to be autonomous. This is the new tone of "East Wind Breaks".