Fan Xin: There is a trend of "winner take all" in the new energy market

From July 5th to 7th, the 2023 China Automotive Forum, hosted by the China Association of Automobile Manufacturers, was held in Jiading, Shanghai. Fan Xin, VP of New Energy Business at Autohome, delivered a wonderful speech. He stated that Autohome has three key words for the entire new energy consumer group: younger, more diverse, and more open. From the perspective of market insight, in the era of gasoline vehicles, the automotive industry has shown a state of "blooming flowers", but in the new energy market, there is a trend of "winner take all". According to channel side observations, in 2022, the number of independent new energy networks counted by the China Automobile Distribution Association was 8569. However, based on business performance, 90% of brand stores have annual sales of less than 500 units.

In response to this situation, Autohome believes that innovative models should be able to provide consumers with a worry free, time saving, and money saving car purchasing experience, while also providing manufacturers with cost reduction, efficiency improvement, and incremental solutions. Based on this, Autohome has launched a new ABC car purchase model, which is the Autohome Energy Space Station. Simply put, we use one-stop service experience, exclusive service+exclusive time and space, and immersive experience technology as our solution for the industry.

The theme of the 2023 China Automotive Forum is "New Era, New Mission, New Energy to Assist in Building a Modern Industrial System". Focusing on multiple themes such as dual carbon, intelligent connected vehicles, software defined vehicles, chips, market consumption, data ecology, digitization, global development, high-level openness, and sustainable development, we comprehensively and deeply explore key development issues that are widely concerned within and outside the industry, from macro policies to industry trends, and then to implementation measures. Autohome, as an official partner, participated in the entire event.

Fan Xin, VP of New Energy Business at Autohome

The following is a factual record of the content:

Good morning everyone, it has only been 18 years since the establishment of Autohome. During this period, the automotive industry has also experienced rapid growth and has now entered a stage of stock market. In response to the major topic of today's forum, Autohome also has its own solution for growth. Below, we will share it with you.

Here, we share with you the three core insights of Autohome. Firstly, based on user side observation. At present, Autohome has three keywords for the entire new energy consumer group: younger, more diverse, and more open. 'Younger' has become a common topic among people, and the proportion of car buyers under the age of 30 has significantly increased. After more than five years of development from 2017 to now, the proportion of our population has increased from 16% to 28%.

In terms of "more yuan", it can be seen that the proportion of female users is significantly increasing, and from the portrait of the entire car purchasing population, the proportion of female users has reached 34%. Through our communication with many automotive brands, it can be seen that the proportion of female users in new energy brands has exceeded 40%.

The "more open" concept is mainly reflected in the new energy track in China, where energy substitution is mainly used abroad. However, in China, we are an intelligent new energy source, and our consumers in the entire domestic market are well educated in the intelligent market. Chinese consumers have a significantly higher preference and acceptance for autonomous driving than consumers in other markets around the world.

In the field of new energy, we have also discovered that the entire new energy product has brought new industries and knowledge, so we are facing a state of knowledge system reconstruction from users to media, with a large number of technology media entering the automotive field. By sorting out the keywords that users discuss about vehicles, such as Ideal and NIO users, they will use a lot of past vehicle professional vocabulary when discussing and communicating. The reconstruction of the knowledge system is a test for our communication, market education, and media.

　　Secondly, insight into the market. When we study the sales of new energy, we will find that there is a trend that we do not want to see. In the era of fuel powered vehicles, the automotive industry has shown a state of "a hundred flowers blooming", but in the new energy market, there is a trend of "winner take all". Top companies occupy a large market share, with 80% of car series selling less than 1000 units per month, and this trend will continue to intensify. At the recently concluded Shanghai International Auto Show, there were 102 new energy vehicle models released, including 43 gasoline powered vehicles. It can be seen that a large number of new energy vehicle models are rushing into the market, and this year we will add far more than 80 new energy vehicle series. We are forming a winner take all situation, which is a huge test and challenge for all new energy enterprises, including traditional enterprises, to transition to new energy.

　　Thirdly, observe on the channel side. According to the 2022 data released by the Circulation Association, the number of independent new energy networks is 8569, which is already very large and growing rapidly. There are over 5000 exhibition halls and experience centers among them. But what is the operating status of our independent channel? 90% of the brand's single store annual sales are less than 500 units, and Autohome has been serving dealers for many years. In the past, a healthy dealer's single store condition that can maintain profitability and continuous operation must achieve a sales level of at least 600 units or more. Basically, good dealerships sell between 800 and 1200 units per store. 500 units are a level equivalent to the boom and bust line calculated by ourselves based on past experience, and it is difficult to maintain profitability and healthy survival below 500 units. So just now these two insights presented a very serious trend in our current new energy sector.

Autohome has conducted a lot of thinking in response to such a situation. On the one hand, it is aimed at the consumer side, that is, the user side. Our core idea when facing consumers is to save worry, time, and money. We hope to improve the efficiency of consumers' decision-making, viewing, and selection, while also improving their purchasing and trading experience.

On the other hand, for manufacturers, Autohome hopes to help them better reduce costs, improve efficiency, and increase growth. At present, the sales status, single store profitability, and operating status of some manufacturers are still weak. Automotive Home has proposed a "new retail" strategy, namely the ABC model, based on the ideas of both the manufacturer and user sides. Simply put, we use one-stop service experience, exclusive service+exclusive time and space, and immersive experience technology as our solution for the industry.

　　Next, I will quickly give you a brief explanation of our three major advantages - the ABC model.

　　Firstly, the one-stop service experience is All in One. A friend from Xiaohongshu mentioned the reverse funnel. In the past, we have been using a marketing funnel to help manufacturers increase efficiency when purchasing cars at Autohome. Now our energy space station solution is actually a full journey service. We pull users from online journeys to the entire offline purchase, decision-making, and experience scenario, all the way to delivery. At the same time, Autohome not only targets the traffic scenarios within the Autohome station, but also includes Ping An, which has over 120 million cumulative users of car insurance. At the same time, the energy space station itself has a good source of offline traffic, and Autohome is a shareholder of Tiantian Car, with over 2 million offline testing scenarios every year. So we are aggregating online and offline traffic together. Autohome has opened the first energy space station experience store in China at the Shanghai Xinhui Center. You can go and have a look at it on-site when you have time. The efficient experience is mainly based on the coverage of our model.

　　We have integrated the entire service of exclusive service and exclusive space, from the selection of online users to the follow-up of dedicated personnel, to the exclusive driving space offline, providing users with multiple vehicle models to choose from.

　　Speaking of exclusive viewing space, let's focus on the holographic model of Autohome. Autohome has established a 1:1 holographic naked eye 3D model at the energy space station, which can accommodate enough exhibition vehicles in limited space to present comprehensive information. Based on 18 years of media experience and accumulation at Autohome, we have developed a series of product evaluation systems. Based on the C-end, the information and evaluation of left and right vehicles are evaluated and described based on third-party authoritative viewpoints. At the same time, we can see the disassembly models of all vehicles, including the battery, chassis, and structural status of the vehicle body, which we cannot see and feel in 4S stores. We can also do some virtual interactive experiences.

　　In our overall layout, that is the fourth insight. Through the above layout, we aim to achieve new energy consumption in thousands of towns and counties. According to channel statistics for mainstream new brands, cities below the fourth tier account for nearly 40% of passenger car sales, specifically 36%. But there is huge room for growth in the penetration rate of new energy, only 20%. Cities below the fourth tier actually have great growth and imagination space, but our channel coverage is only 12%. The permanent population of the county is 740 million, accounting for half of the country's population. It is indeed very difficult to achieve coverage. Therefore, the layout of energy space stations prioritizes filling the gap in low-level cities. By the end of this year, it will cover 20 cities. The energy space station in Haikou has already opened, and the energy space station in Chengdu will enter trial operation in July. Next year, it will cover over 101 cities.

　　When it comes to the issue of new energy going to the countryside, Autohome also has a solution called "mobile holographic display cabin", which can better enter the county-level market at a low cost. The display cabin has three advantages: flexible mobility, rapid deployment, and a solution that can accommodate a large number of product introductions.

Overall, the solution for Autohome Energy Space Station provides low-cost and rapidly deployable sales service solutions for manufacturers. Firstly, there is no investment in building a store, and there is no need to attract investment. The channel network is quickly deployed, and the system is operated by Autohome. Secondly, with zero operational risk and no fixed operating costs, significant sales growth can be achieved.

Finally, let me summarize my sharing today. Firstly, the four insights I shared. From users to current sales and channel operations. Secondly, to share with everyone the solutions of Autohome Energy Space Station and low-cost mobile space station, which are worry free, time saving, and money saving for consumers. The core advantage is a one-stop, exclusive, and immersive experience, which is a cost reduction, efficiency improvement, and incremental solution for manufacturers. That's all for today's sharing. Thank you all.

(Note: This article is organized based on on-site shorthand and has not been reviewed by the speaker)

Source: Automotive Horizontals