Even though Dongfeng Group’s top resources are integrated, the facts show that it is difficult for Lantu Automobile to support Dongfeng’s high-end automobile brand dream.
Image Source: Car Story/Photo
Text | Car Fiction, Fig
On August 12, Lantu Auto announced on its official account that "from now on, the purchase of Lantu FREE in Hubei Province can enjoy a comprehensive cash subsidy of 30,000 yuan from the local government".
Going back one month, on July 16, according to Hubei local media "Hubei Daily", at the "Lantu Dreamer Central Enterprise Bulk Purchase Signing Ceremony and High-end New Energy Electric Vehicle Development Forum" held that day, Lantu Automobile signed a purchase order for a total of 6,000 Lantu Dreamers with central enterprises and provincial state-owned enterprises in Hubei.
In just two months, it was the collective procurement of local state-owned enterprises and the support of local car purchase subsidies. These "off-the-shelf moves" showed that Lantu Automobile was "anxious" about the status quo that it could not open up the situation at the end point of the market. At the same time, it also showed that Lantu Automobile could not support Dongfeng’s high-end dream.
Image Source: Car Story/Photo
The business strategy is not clear, and the market performance is sluggish
On the official website of Lantu Automobile, there is an introduction to the Dongfeng Group, which it belongs to: "53 years of car manufacturing and precipitation, ranking 85th in the world’s top 500, with 20 years of accumulation of new energy technologies, and infinite strong partners. In 2020 alone, the total number of invention patents reached 2,391, ranking first in China’s vehicle group."
This was in the early days of Lantu Automobile’s establishment, and such a hard-core introduction was undoubtedly a plus for the new brand. At least it was helpful in winning consumers’ trust in this new brand. However, this introduction today has undoubtedly become the "magic mirror" of Lantu Automobile.
Even though Dongfeng Group’s top resources are integrated, from the perspective of the operation performance of Lantu Automobile, not only has it failed to convert the huge energy given by Dongfeng Group into its own market competitive advantage, but today, it still relies on its background resources to support its face.
Perhaps, from the perspective of its establishment time, Lantu Automobile, which has just been established for two years, is still a "newcomer", and it is too early to characterize it now. But it must be known that today’s automobile market is no longer in the era of traditional oil vehicles, as long as it can withstand it, it will have a day to come. Under the background of the current industry’s accelerated transformation to "electrification", as "new players" continue to join, for the consumer market, not only are the models available for users to choose rapidly increasing, but "new concepts and new ways to play" that are different from the past are also emerging one after another. The market is huge, but the opportunities have not changed.
Li Xiang, chairperson of Li Auto, has said in public on several occasions that "[Li Auto] has only one chance to play", noting that if one fails, there will be no chance to play again. "Even if you raise money, it’s useless because the suppliers won’t play with you anymore – that’s the one thing we fear the most."
In fact, this sentence also applies to all "newcomers" in the car industry, including Lantu Automobile.
According to the latest sales data, in the past July, Lantu Automobile sold 1793 vehicles. This sales performance is only 17.2% of Li Auto, which also uses the extended range route, and 22.97% of AITO.
From January to July, the cumulative sales volume of Lantu Automobile was 8671 vehicles. Only 28% of the annual sales target (31,000 vehicles) after the reduction was completed. Such a market performance is obviously not optimistic.
At least from the point of view of the cards, it is difficult to say that Lantu Automobile’s first license is successful. Of course, backed by the big Dongfeng Group, Lantu Automobile will naturally not encounter the supply chain problems that Li Xiang worried about earlier. But from the fact that Lantu Automobile has resorted to "off-the-shelf tricks" such as large local subsidies and centralized procurement by state-owned enterprises, it can be seen that the management of Lantu Automobile has entered a technical poverty in dealing with the current predicament.
When the monthly sales volume is expanded, it is not difficult to see the dismal state of Lantu Automobile’s business.
Data show that in the first six months of this year, Lantu sold 1,553 vehicles, 604 vehicles, 1,400 vehicles, 1,049 vehicles, 906 vehicles, and 1,202 vehicles respectively.
In an interview with Shell Finance, auto analyst Zhong Shi pointed out that "high-end electric vehicles are for a small number of specific groups of people to experience new technologies. The full set of brand hype and market operation are completely different from traditional cars. It is very difficult for managers who are used to the operation of traditional car companies to make sharp turns to adapt. It is impossible for traditional car companies to change their genes casually."
In contrast, whether it is "Wei Xiaoli", the head camp of the new car-making forces, or "Ask the World AITO", the various ways that Lantu Auto has operated for two years are more like an "old-fashioned" traditional car brand, and it does not see the attributes of being a "high-end smart electric brand".
So much so that since the launch of the brand in July 2020, Lantu Auto has still not had a clear imprint in terms of brand tone building.
In the end point market visit, the car story learned that there is still a considerable proportion of consumers who do not know "Lantu Automobile", and many consumers are unfamiliar with the Lantu Automobile LOGO. Even if there are consumers who know this brand, most of them will use "a brand new to Dongfeng" and "an extended range car imitated by Dongfeng Ideal Lane" to express their awareness of Lantu Automobile.
In sharp contrast, most consumers can clearly express the brand imprint of "Li Auto – focusing on home use, NIO – focusing on services, XPeng Motors – focusing on intelligent driving, and asking the world AITO – Huawei car" at the first time.
This also shows that the team of Lantu Automobile has lacked a strategy at the brand level in the two years since its establishment, or the related work has been basically ineffective.
At the Yabuli China Entrepreneur Forum 2021 in June last year, Wang Chuanfu, chairperson and president of BYD, told "new players" that the cost of time was important. "Maybe losing five billion is not much, but you lost three years, how much is that three years worth? You can’t buy it with money."
At the moment, I don’t know how Lantu Motors will interpret the past two years.
In addition, only 28% of the annual target was achieved in the first seven months, and it was also a revised sales target, which also shows that the Lantu Automotive management team has a cognitive bias towards the competitiveness of its products and the market conditions in which it operates.
At present, for Lantu Automobile, the core key to turning around the decline is the lack of a helm like "Li Xiang, He Xiaopeng, Li Bin" with a clear strategic thinking of development. At the worst, it is necessary to have at least one hard-working "salesperson" like Yu Chengdong.
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The product force is mediocre, and the spontaneous combustion accident needs to be explained
Although in terms of brand positioning, Lantu Automobile is positioned as Dongfeng Group’s "high-end smart electric" brand. But in terms of product strength, the current models are obviously not very close to "high-end".
After flipping through the official website of Lantu Automobile, it was noticed that Lantu Automobile’s more dissemination still stayed in traditional fields such as vehicle testing and body safety. However, there is little mention of "smart electric vehicles", such as "smart cockpit" and "intelligent assisted driving".
The only battery technology that was singled out for amplification ended up being overturned.
On March 1, at a media event, Lantu Automobile highlighted the battery technology used in Lantu’s first mass-produced model, the Lantu FREE. According to its introduction, the Lantu FREE battery can achieve the "three no principles" including "no smoke, no fire, and no explosion" after passing the safety inspection.
Image source: Landmap Automotive
In addition, Lantu Automobile also publicly claimed: "Lantu Automobile’s self-developed high-safety battery PACK solution, the industry’s first three-dimensional thermal insulation technology, and the original battery safety detection and early warning model", "Lantu FREE uses five battery safety structure designs to create full-scene safety of battery packs", "Lantu FREE battery safety zero anxiety", "Lantu Automobile shows the leading level of the new energy model battery pack thermal diffusion management industry".
What was rather embarrassing was that the bragging voice on the front foot had just fallen, and the video of an open flame spontaneously igniting in the position of the battery pack of the Lantu FREE chassis on the back foot spread all over the Internet.
Image source: Video screenshot
On June 27, according to a video circulating on the Internet, a Lantu FREE had a burning accident that day. Through the video taken at the scene, it can be clearly seen that the fire of the Lantu FREE is located at the bottom of the vehicle, which is where the battery pack is located.
After the accident, Lantu Automobile only said that "the accident did not cause damage to people or surrounding property, and has provided users with a solution to travel by car. The task force has rushed to the scene to investigate and deal with it, and the results of the accident investigation will be announced in detail as soon as possible."
Since then, Lantu Automobile has never updated the results or progress of the investigation into the incident. As if the accident had never happened. In response, the car novel called Lantu Automobile 400 to inquire about the progress of the investigation into the open fire accident. The answering staff responded in a panic that it was "still under investigation."
Although the domestic performance is mediocre, the cause of the fire involving vehicle safety has not yet been identified, but these do not seem to affect the "flying" mood of the management team of Lantu Automobile.
According to the official website of Landmap Automobile, on July 8, Landmap Automobile officially announced its entry into the overseas market.
Lu Fang, chief executive of Lantu Automobile, said: "Created in China is becoming the core competitiveness of China, giving Chinese cars the strength and confidence to look at the world. While Lantu Automobile continues to explore the domestic market, it is also fully committed to the vast international new energy market, and is committed to becoming a leader in high-end electric vehicles."
Image Source: Car Story/Photo
As Lu Fang said, "Created in China is becoming China’s core competitiveness, giving Chinese cars the strength and confidence to look at the world head-on." I just hope that Lantu Automobile can think thrice before acting. Before making the basic skills solid, it may as well take a small step first, and not drag down the good reputation that China’s new energy vehicles have just established in overseas markets.
On July 19, according to a report by "Dongfeng Toutiao", a subsidiary of Hubei Dongfeng Newspaper Media, entitled "Adjustment of Leadership Team Members of the Two Units", on the afternoon of July 18, the Dongfeng Party Committee announced at the cadre meeting held by Lantu Automobile that Lu Fang would no longer serve as the Chief Technology Officer (CTO), a position held by Wang Junjun, deputy director of the DONGFENG MOTOR CORPORATION Technology Center.
In addition, Qin Jie served as a temporary party committee member and party secretary of Lantu Automobile; Liu Mingjiao served as a temporary party committee member, disciplinary committee member, and secretary of the disciplinary committee of Lantu Automobile; Gong Xuesong and Shao Mingfeng served as assistant general manager of Lantu Automobile.
Whether Dongfeng can save the crumbling Lantu car through this personnel change is still unknown, but in the car novel, whether a ship can drive out of the storm zone, the "helmsman" who controls the direction is very crucial.
