300,000 SUV has not sold well, how can Lantu sell 600,000 MPV？

Original, Wang Shuaiguo, Economic Observer

Landmap Dreamers are facing a much narrower MPV market, and there are a large number of luxury and joint venture competitors competing for the market cake. In this context, can Landmap Dreamers really "realize their dreams"?

Author: Wang Shuaiguo

Seal picture: official website picture

Lantu cars are "desperate" on the road to high-end. When the first car, Lantu FREE, was far from opening the market, a second car, Lantu Dreamer, was launched.

The Landscape Dreamer is an MPV, and its pre-sale price is beyond many expectations. The pre-sale price of the seven-seat version is 380,000 yuan – 480,000 yuan, and the pre-sale price of the four-seat version is 600,000 yuan. The new car is expected to be officially launched in the second quarter, and deliveries will start as soon as July.

380,000 start, up to more than 600,000 yuan, has never before had any independent brand models can be sold to such a high price range.

It is well known that Landu’s first car, Landu FREE, is targeted at medium and large SUVs, which is a relatively popular market, but even so, Landu FREE did not sell well.

In contrast, Lantu Dreamers faced a much narrower MPV market, and there were a large number of luxury and joint venture competitors competing for the market cake. Under such a background, could Lantu Dreamers really "realize their dreams"?

The product route is questionable

Before the Dreamer, Lantu Auto launched its first model, Lantu FREE, in June last year. The car is positioned as a performance-level intelligent electric SUV, focusing on high-end configurations such as extended-range power and air suspension. It is the first self-owned brand passenger car model of Dongfeng Motor Group priced more than 300,000.

Landmap officials are full of confidence in the first car. However, the market performance of Landmap FREE did not meet expectations, and sales continued to decline shortly after its launch. From December 2021 to February 2022, the delivery of Landmap cars fell from more than 3,000 to more than 700. In March, the delivery of Landmap cars rebounded to 1,400. After half a year on the market, the cumulative delivery volume was barely over 10,000. In addition, Landmap has not yet released the delivery data for April.

The reason is that Dongfeng Motor Group has always lacked the genes to build a high-end brand, and Lantu’s own brand positioning is vague, which has made Lantu FREE cold in the popular SUV market. As a comparison, the same as the extended-range electric SUV, the ideal monthly delivery volume of ONE reached the highest 10,000 units, and even the sales volume of Cyrus, which was not optimistic before, exceeded 3,000 units in March and April. Lantu FREE became a de facto "loser".

Just as the first model, Lantu FREE, had not yet established itself, Lantu cars rushed into the MPV field, which made the industry question its product route. There are even opinions that Lantu’s move is to "change the track".

In this regard, Lantu Automobile CEO and CTO Lu responded on Weibo on the second day of the Dreamer’s pre-sale in early April, proposing that there are many pain points and needs in the domestic MPV market, including consumers’ high requirements for low-carbon travel and intelligence; consumption upgrades, the demand for multi-person travel brought about by changes in China’s family structure; most MPVs in the market have safety hazards, and the driver’s seat and second row comfort are not enough.

"We are both enterprises and users, we understand these pain points and needs, and we want to provide solutions," Mr. Lu said.

"Landmap believes that the market needs a travel product that can reflect the corporate image, but also comfortable and safe enough to meet the needs of reception, commuting and business trips, and provide a full-scene comfortable experience. However, in the current market, there is no MPV that is truly comfortable and safe, and even most MPVs cannot reach the passing line." At the same time, with the emergence of more and more families with two and three children, the requirements for vehicles for family travel are also getting higher and higher. However, when cars and SUVs have fully entered the era of intelligence and electrification, MPVs are still stuck on the traditional fuel platform of the last century.

Based on this judgment, Landmap Dreamer targets its audience at "high-end business people who pursue low-carbon travel and new backbone who pursue technology and comfortable family travel experiences".

According to Lantu officials, Lantu Dreamer started pre-sale on April 7, and as of April 9, orders have exceeded 3,000 units. Compared with Lantu FREE, which received 3,689 orders in 43 days, the development prospects of Dreamer seem to be better.

Some of the orders received so far have made Lantu Auto have positive market expectations for Dreamers. "We are full of confidence in sales, and at the same time, we also pay more attention to the user experience than sales. The advantage experience of smart electric vehicles compared with traditional fuel vehicles is completely out of date. We look forward to exploring and leading this consumption trend with consumers who embrace smart electric technology," said the above-mentioned Lantu insider.

Crowded MPV market

Whether the MPV market is a new blue ocean that is about to break out, or whether the market is still a small marginal field, there has been controversy in this industry.

The development of the domestic MPV market has experienced a trough in recent years. Public data show that since 2017, domestic MPV sales have continued to decline. By 2020, the annual sales volume has only 1.054 million, only 40% of 2016.

This is not unrelated to the decline in the overall domestic auto market. However, the continuous decline in the willingness of young people to marry and have children has also become an important driving force for the decline in sales of MPV models with large space and high fuel consumption. However, based on the rise of the domestic middle class and the emergence of consumption upgrades, as well as the introduction of the national "three-child policy", some industry experts believe that the MPV market, especially the mid-to-high-end MPV market, is about to explode.

Zhou Lijun, president and chief analyst of the Easy Car Research Institute, said that in 2020, the increase in demand for the domestic car market has accounted for 60% of the total consumption, and this trend will accelerate in the future. Because the main group of people buying cars in the Chinese market is not young people, but middle-aged people with old and young people, especially those with two children at home, they will be more suitable for buying MPVs.

In 2021, there have indeed been several waves of MPV models coming together in China. For example, at the Chengdu Auto Show held at the end of August of that year, GAC Toyota, Dongfeng Yueda Kia (now renamed Kia Automobile) and Beijing Hyundai launched three joint venture brands, Saina, Ka Hua, and Kusitu. Three fuel MPVs were launched at the Guangzhou Auto Show in November. At the same time, Lantu Dreamer, SAIC MAXUS MIFA 9, and Hechuang Automobile’s electric MPV concept car Concept-M.

Driven by these new models, domestic MPV model sales in 2021 stopped falling and rebounded. According to data released by the China Association of Automobile Manufacturers, China’s MPV sales reached 1.055 million in 2021, an increase of 0.09% year-on-year. However, the results of 1 million cars only accounted for 4.02% of the country’s total automobile sales, and MPVs were still on the edge of the automobile market.

From January to March this year, the cumulative sales of domestic MPV models 204,000, down 7.8% year-on-year. During the same period, the sales of cars and SUVs rose by 8.4% and 10.4% year-on-year respectively, and the MPV market does not seem to be showing signs of breaking out. Some market participants said that in the case of the epidemic affecting the income of ordinary people, compact cars and SUVs are once again sought after by consumers, and the sales prospects of high-end cars and large cars are not ideal.

In the narrow MPV track, Lantu dreamers want to cut their way through the cracks of strong opponents such as Buick GL8 and Toyota Saina. Whether it is "courageous" or "reckless" is also full of controversy.

600,000 yuan worth of "Mystery Confidence"

For many years, the mainstream price range of independent brand models is concentrated below 300,000 yuan. More strictly speaking, below 200,000 yuan is the mainstream price range of independent brands. But in the past two years, with the rise of independent brands and the emergence of new energy high-end brands, prices have gradually developed upward.

For example, the high-end brands represented by Geely Lynk & Co and Great Wall Wei brand broke into the price range of more than 200,000 yuan. And the new energy brands represented by NIO and Ideal have further broken through the high-end market above 300,000. Some models have exceeded 500,000 yuan, such as NIO ES8 to 600,000 yuan, Lynk & Co 09 also reached 400,000 yuan.

Lantu brand is also one of the new brands that follow the trend of independent brands to develop new energy high-end, and it also has the impulse of brand upward and price upward. But from the pre-sale price of Lantu Dreamers, 380,000 yuan starts to 600,000 yuan, not only does it have a large price span, but compared with the price of Lantu FREE 313,600-373,600 yuan, it is almost "leap-up", and there is a huge price gap between the two. Therefore, what does Lantu Dreamers use to support their worth of 600,000 yuan?

There is a view that the pre-sale of Lantu Dreamer for 600,000 yuan is just a symbolic meaning, highlighting the brand height, and the real volume is the model in the 400,000 yuan range. But even so, Lantu Dreamer still has many difficulties in convincing consumers to pay. Its first task is how to convince consumers not to choose Buick GL8, Toyota Saina, or Mercedes-Benz V, Lexus LM, but to choose an independent electric MPV.

From the perspective of product hard power, the length, width and height of the Landscape Dreamer are 5315mm, 1980mm, 1810mm, and the wheelbase is 3200mm. As a comparison, the above four parameters of the Buick GL8 ES Lu Zun are all smaller than those of the Landscape Dreamer. Therefore, in terms of interior space, the Landscape Dreamer is slightly better. However, the larger size also increases the difficulty of turning and parking for the Landscape Dreamer.

In terms of power, the Lantu Dreamer, like the Lantu FREE, adopts an extended range and pure electric dual-power layout. The extended range version adopts the 1.5T four-cylinder extended range internal combustion engine developed by Dongfeng, with a maximum power of 185 horsepower and a total power of 395 horsepower for the front and rear axle motors. The dual-motor pure electric version has a total power of 435 horsepower and a 100-kilometer acceleration of 5.9 seconds. The Buick GL8 ES Lu Zun uses a 2.0-liter inline four-cylinder turbocharged engine with a maximum power of 237 horsepower. In comparison, the power parameters of the Lantu Dreamer comprehensively surpass the Buick GL8.

In terms of chassis performance, the Lantu Dreamer is equipped with an aluminum alloy front double wisharm, rear five-bar linkage, and adaptive air suspension chassis. The 2022 Buick GL8 ES Luzun uses a front-enhanced McPherson suspension and a rear four-bar independent suspension chassis system. In contrast, it is clear that the front and rear suspension configurations of the Lantu Dreamer are better, and due to the presence of air suspension, the Lantu Dreamer has better vehicle passage and convenience of getting on and off the vehicle (the vehicle chassis can be adjusted from the ground).

In terms of technology selling points, Lantu Dreamer focuses on air suspension, CDC (continuous shock absorption control system) and "magic carpet function". The "magic carpet function" refers to the vehicle’s ability to use intelligent technology to monitor and analyze road conditions in advance, give real-time feedback and adaptively buffer shock absorption. Officials claim that this function is "superior to luxury brand MPV models such as Lexus LM and Mercedes-Benz V-Class".

In addition, Lantu Dreamer also has zero-gravity wide-fit seats, three-zone smart air conditioners, baby-grade skin-friendly fabrics, Danah sound system and other configurations, 26 intelligent driving auxiliary features, ECALL collision intelligent rescue system and OTA upgrade functions for the whole vehicle. In this regard, the 2022 Buick GL8 ES Lu Zun is also rich in configuration, and the two seem to be on par.

The above-mentioned Lantu automotive insider told the Economic Observer Network that compared with the existing luxury MPVs on the market, Lantu Dreamer has built its core competitiveness of "electrification" and "intelligence".

In terms of electrification, Landmap Dreamer is the world’s first dual-power new energy MPV. Among them, the pure electric version solves the licensing problem in first-tier cities, and the super-extended range version completely eliminates mileage anxiety while bringing pure electric quiet experience and low fuel consumption. In terms of intelligence, Landmap Dreamer is built on ESSA’s native intelligent electric architecture, the world’s first Gigabit 5G vehicle network, and has L2 + level intelligent driving assistance capabilities.

Overall, with multiple advantages such as size, power, and chassis configuration, Lantu Dreamer has abandoned the low-price strategy used by its own brands in the MPV market, and adopted a breakthrough strategy of competing with luxury and joint venture models with the strength of the whole vehicle. In other words, Lantu wants to "redefine the high-end luxury MPV".

But the problem is that the good reputation and inherent image accumulated by Buick GL8, Mercedes-Benz V-Class and other models in the market for a long time are like an insurmountable wall. It is not easy for Lantu dreamers to bypass or break this wall.

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Original title: "300,000 SUV has not sold well, how to sell 600,000 MPV?"

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