Xiaomi/Smart World/Jike’s All-Out Effort, the Glory of Joint Venture B-Class Cars may never return

Xiaomi, Smart World, and Jike Join Forces in a Valiant Effort to Revive the Glory of B-Class Joint Venture Cars

【PhoneAuto】As the last major car show in China this year, the ongoing 2023 Guangzhou Auto Show can be said to have attracted a lot of attention. Many blockbuster models are exhibited at this car show. Among them, new energy vehicles have become the hot trend in recent years and have become the battleground for various manufacturers. Unlike previous domestic brands that focused solely on SUV models, the highlight of this car show is in the MPV and sedan categories. The former features the Ideal MEGA and Xiaopeng X9, two major new forces that are attracting a lot of attention. The latter has also seen the introduction of numerous new cars, which is particularly evident in the B-segment car market that is still dominated by joint venture vehicles.

Geely Galaxy E8

At this Guangzhou Auto Show, domestic brands seem to be launching an offensive against joint venture brands in the B-segment car market, especially in the pure electric field. Whether it’s the debut of the Jiike 007 and the Geely Galaxy E8 at the auto show, or the previously released Zhiji S7, or the Xiaomi’s first car model, the Xiaomi SU7, which has been reported and will be released next year, all of them are aimed at the B-segment car market in terms of price and size. So why are domestic brands starting to focus on the B-segment cars now?

• Shark frenzy! BYD tops the sales charts for new energy vehicles in Brazil for 4 consecutive months.
• Brand new Mercedes-Benz E-Class car’s benchmark test score exposed, equipped with Snapdragon 8295 processor, achieved a score of 930,000.
• Li Bin Market changes too fast, NIO’s five-year strategic plan becomes a two-year operational plan.

The B-segment car market is a very important market. It not only relates to the image and reputation of a brand, but also to the brand’s profits and development. B-segment cars are often a brand’s flagship model, representing the brand’s technological level and design concepts, as well as a major source of profits. B-segment car consumers are typically people with a certain level of economic strength and taste. Their requirements for vehicles go beyond functionality and performance, including quality and style. Therefore, the competition in the B-segment car market is extremely fierce, with major brands constantly launching new products to attract consumers’ attention and wallets.

Classic B-segment car Camry

In the B-segment car market in China, joint venture brands have always held a dominant position. They have won consumers’ trust and love with their international brand influence and technological advantages. Domestic brands, on the other hand, have always been at a disadvantage. In the eyes of consumers, they are often synonymous with low price and low-end, lacking brand image and competitiveness. However, in recent years, with the improvement of domestic brands’ technological progress and innovation capabilities, some domestic brands have begun to shine in the B-segment car market, bringing significant challenges to joint venture brands. BYD is a typical example of this.

BYD was once famous for producing low-priced A-segment cars, and the BYD F3 was also a leader in the Chinese A-segment car market. However, this positioning also brought some troubles to BYD. In the eyes of consumers, BYD has always been associated with low price and low-end, and even some unmentionable puns. Such an image has made it difficult for BYD to break through in terms of sales volume and kept its profits at a low level. BYD realized this problem and started seeking transformation and breakthroughs. BYD decided to enter the B-segment car market to improve its brand image and profit potential.

BYD Han

The Han is a B-class car launched by BYD in 2020. It adopts BYD’s new design language and features a stylish and dynamic appearance, as well as a luxurious and comfortable interior. The Han is also equipped with BYD’s self-developed plug-in hybrid technology, providing powerful performance and low fuel consumption. The Han offers excellent value for money, with a price range between 200,000 and 300,000 yuan, significantly lower than similar joint venture cars. The launch of the Han has not only greatly improved BYD’s brand image but also increased its profits. In fact, BYD has even introduced more new models, such as the Dolphin, Qin, and Song, leveraging the success of the Han. This is the charm of the Han and B-class cars.

The B-class car market is a highly valuable market. It not only satisfies consumers’ demands for high-quality, high-performance, and well-equipped vehicles but also brings substantial profits and stable development to automotive companies. In the Chinese B-class car market, joint venture brands have always dominated. Although joint venture brands have lost some market share to domestic brands in the current compact SUV and A-class car markets, they still reign supreme in the B-class car market.

Geely Cool ONE at the Guangzhou Auto Show

The B-class car market is the foundation of joint venture car companies. The reason why joint venture car companies have a competitive advantage in the A-class car market is largely due to the profits generated from their B-class cars. Joint venture car companies can use the profits from B-class cars to subsidize the prices of A-class cars, allowing them to engage in price wars with domestic brands in the A-class car market.

Furthermore, under the competition from domestic brands, the prices of B-class cars from many joint venture brands have also seen significant reductions. For example, previously popular models like the Accord, Camry, and Passat now offer considerable discounts. In the past, 150,000 yuan could only get you a Honda Civic, but now you can get an Accord for the same price. This also indirectly shows how high the profits were in the B-class car market.

Honda Accord

For domestic manufacturers, without the profits of foreign investors to share, they may have a greater cost advantage. This is why companies like Geely, GAC, and Changan all have their eyes on this market. For them, even if the prices are lower compared to similarly classed joint venture models, they can still achieve greater profits than with A-class cars.

New energy vehicles are the future trend of the automobile industry. They not only reduce environmental pollution but also improve energy efficiency. With the technological advancements and policy support for new energy vehicles, consumer demand and expectations for them are increasing. Consumers not only expect new energy vehicles to have sufficient range and performance, but also high-end quality and design. This gives domestic brands an opportunity to leverage the technological advantages of new energy vehicles to create B-segment cars that meet consumer needs.

Jike007

The B-segment car market is a very valuable market. It not only fulfills consumers’ demand for high-quality, high-performance, and high-configured vehicles, but also brings substantial profits and stable development to automobile companies. B-segment car consumers are usually financially capable individuals with taste. Their requirements for vehicles go beyond functionality and performance and also include quality and style. Therefore, the competition in the B-segment car market is fierce, with major brands constantly launching new products to attract consumers’ attention and wallets.

Furthermore, for new energy vehicles, an increase in vehicle size is not a disadvantage but an advantage. Larger vehicle models can accommodate larger batteries, provide more interior space, and offer better intelligent experiences. In the current context of platform-based car production, manufacturing B-segment cars is not very difficult. The addition of electric motors ensures that today’s vehicles still have surplus power, so there is no need to worry about a lack of horsepower when the vehicle becomes larger.

Xiaomi’s first model SU7

From a market layout perspective, domestic car manufacturers are introducing B-segment cars to fill the gaps in their product lines and achieve more comprehensive market coverage. Currently, domestic car manufacturers have strong competitiveness in the low-end market, such as A-segment and A0-segment cars. However, there is still a significant gap in the mid-to-high-end market, such as B-segment and C-segment cars. Therefore, the introduction of B-segment cars by domestic car manufacturers aims to expand market share, enhance market position, and meet the needs of consumers at different levels.

From the above, we can conclude that domestic brands are starting to pay attention to the B-segment car market because it plays a crucial role in brand image, profitability, and competitiveness. Moreover, the B-segment car market also has vast development potential in the field of new energy. The entry of domestic brands into the B-segment car market is undoubtedly a challenge to joint venture car manufacturers and a breakthrough for themselves. We look forward to seeing domestic brands achieve more success in the B-segment car market and consumers having more choices.

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