Hiromitsu MINI, which became a big boom as an EV that can be purchased from the 500,000 yen range, came to a sudden stop this year.
SAIC-GM-Wuling Automobile’s “Hongguang MINI,” which has become a hot topic in Japan as a 500,000-yen EV, is rapidly declining. Monthly sales, which peaked at over 50,000 units, fell to 18,000 units in April this year. The EV shift began early in the world, and the market itself continues to grow. The increase has already ended the boom.
One loser in the growing Chinese market for new energy vehicles
The Hiromitsu MIN, which was released at the end of July 2020, sparked an ultra-compact EV boom with a cute body reminiscent of a Japanese minicar and a low price of 28,800 yuan (about 570,000 yen, 1 yuan = 19.87 yen). , was called “God guruma”.
One month after its release, it surpassed Tesla’s “Model 3” in sales and became the top EV in Japan. According to Wuling Automobile, which sells the model, and the National Passenger Car Market Information Association (CPCA), sales in 2022 will exceed 554,000 units, making it the world’s top-selling compact EV in the same year. With a maximum monthly sales volume of 50,600 units, it has been ranked No. 1 in NEV (new energy vehicle) sales volume rankings for 28 consecutive months.
BYD launched the entry-level EV “Seagull” at the end of April this year, and competition in the middle-end market is intensifying.
Hiromitsu MINI, which can be purchased from 500,000 yen, became a big topic in Japan. In fact, the same model does not meet the safety standards that can be sold outside of China, and the cheapest grade does not have air conditioners or airbags, so it is completely different from Japanese kei cars, but EV In Japan, where the shift is not progressing, the sense of crisis in the industrial world has been heightened.
However, at the end of last year, Hiromitsu MINI’s rapid progress came to a sudden halt. Sales in November 2022 will be 32,000 units, down 13.8% year-on-year. Although it picked up somewhat in December, it fell 26.5% year-on-year to a total of 87,928 units in the period from January to April 2023. Among the top 10 sales of new energy sedans, this is the only model whose sales volume has decreased. Became.
In order to bolster sales, Wuling Automobile has made a limited-time discount on the Hongguang MINI from May 22nd. Chinese media and the automobile industry are analyzing the decline of the “Godshaw”, which has surpassed Tesla and has become the favorite of the EV world, as follows.
1. Consumers turn away from price hikes
The Hiromitsu MINI is a super-cheap EV and targets the most price-sensitive segment. It is said that many of the consumers who consider purchasing are not comparing EVs, but gasoline cars, small trucks, and electric tricycles, and consumers are leaving every time the price of Hiromitsu MINI rises.
In March 2022, the price of this model was raised by an average of over 10% due to high raw material prices. With the lowest price of 32,800 yuan (approximately 650,000 yen), the sense of bargaining faded, and sales in the following April fell 6% year-on-year to approximately 25,000 units. rice field.
The sharp drop in sales since January this year is believed to be largely due to the end of the EV purchase subsidy that the Chinese government has continued for more than 10 years in 2022. The impact of the end of subsidies has spread to all EVs, and Japanese manufacturers have also been hit, but the decline in low-priced EVs has been greater and prolonged.
2. Increased competition creates a red ocean
Hiromitsu MINI created a market of “low-priced ultra-compact EV” by price destruction, but inevitably, major companies entered one after another, and competition became fierce.
Chery Automobile (Cherry), a long-established manufacturer, will release “QQ ice cream” at the end of 2021. While keeping the appearance and performance quite similar to the Hiromitsu MINI, the price at the time of release was set slightly lower than the Hiromitsu MINI to steal the market share of the same model.
State-owned major Changan Automobile will launch the ultra-compact EV “Lumin” in June 2022. This model was about 1.5 times the price of the Hiromitsu MINI, but it was differentiated by enhancing safety and driving experience. The Hongguang MINI is not equipped with an air conditioner in the cheapest version in the 30,000 yuan range and airbags in versions up to 40,000 yuan, but the Lumin is equipped with airbags as standard, and you can enjoy smart lock functions and video content. Attention was also paid to improving the driving experience, such as installing an in-vehicle display. Changan Automobile seems to have upgraded the equipment even if the prices were raised, arguing that the cheapest versions of the Hongguang MINI and QQ Yingqilin are “strategic prices to attract attention” and that they are not actually selling well.
Earlier this year, Geely Automobile, a major privately-owned vehicle, launched the “Panda Mini” and sales are growing.
Several other major manufacturers have released cheap EVs, and with the increase in consumer options, the Hiromitsu MINI’s era of winning alone is over.
3. Shrinking market for “cheap ultra-compact” vehicles due to diversification of EVs
Due to the high name recognition of the Hiromitsu MINI, the recent slump has attracted a lot of attention, but rather than the problem of the same model alone, the boom in ultra-compact EVs has come to a halt and the market is saturated. .
According to the China Automobile Manufacturers Association, the number of A00-class (wheelbase 2-2.2m, displacement 1000cc or less) ultra-compact EVs to which the Hongguang MINI belongs will fall by 55.1% year-on-year in January-March 202313. It dropped to 10,000 units. New energy vehicles as a whole increased by 25.9%, and only ultra-compact EVs are sluggish.
In 2020, when the Hiromitsu MINI appeared, the price of EVs was high, and even the Tesla Model 3, which is positioned for the masses, cost more than 6 million yen in Japanese yen, and the lower grade also cost more than 3 million yen. However, recently, the lineup of EVs has increased, and the price range has also diversified. It seems that the market for low-cost ultra-compact cars with minimal equipment is shrinking as a result of an increase in consumer choices that emphasize safety and comfort, although they cannot afford to spend more.
Advance to the middle end or continue to the low end?
The Air EV is a global brand announced by Wuling Automobile last year. Safety has been improved so that it can be sold overseas.
The global brand “Air EV” and the domestic 5-door compact electric vehicle “Bingo” were launched. The selling price of the former is from 67,800 yuan (about 1.3 million yen), and the latter is from 59,800 yuan (about 1.2 million yen). We are improving our equipment.
However, the same price range is a segment where major manufacturers with strong brand power are likely to fall. ~ 89,800 yuan[about 1.45 million to 1.8 million yen]), and the rival is stronger than the Hiromitsu MINI segment.
Many people say that the future potential of Hongguang MINI and low-cost ultra-compact EVs is tapering off. There are also opinions that it is better to develop a cheap market that major companies do not touch, rather than fighting formidable rivals at the end.
Sanae Urakami: Economic journalist, Hosei University MBA practitioner lecturer, English/Chinese translator. He graduated from the School of Political Science and Economics at Waseda University. After working for Nishinippon Shimbun for 12 and a half years, he stayed in Dalian, China for a government-sponsored doctoral program (business administration) and as a lecturer at a university for ethnic minorities for 6 years. Latest issue “New Corona VS China 1.4 billion peopleUnmarried mother for 13 years, 42 years old and married for the first time with a child.
Source: BusinessInsider
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