Geely will launch the ＂Galaxy＂ brand？ Seeing another multi-brand strategy, I don’t understand.
Written by: Listening to the Wind
Reviewer: Kan Second Sister
Editor: Xiao Xiao
It is difficult to say whether it is a curse or the times. In the past 20 years, among the many car companies in China, the success rate of those who want to engage in multi-brand strategies is not very high. But what is interesting is that even if there are so many lessons from the past, there are always car companies who want to test the waters of multi-brand strategies.
Previously, the official Weibo of Geely Automobile Group announced a set of information. On February 23, Geely will officially release the "Geely Brand New Energy Strategy" at the main venue of the Hangzhou Asian Games, and launch Geely’s mid-to-high-end new energy series models. It is reported that the new brand may be named "Galaxy", while the official Weibo of Geometry Automobile seems to reveal that the brand will be named "Galaxy" when forwarding the news.
It is worth noting that Geely Automobile’s current sub-brands are quite rich. In addition to the main brand Geely, it includes many brands such as Extreme Krypton, Lynk, Ruilan, Radar, Geometry, etc. If the acquired brands are included, it will be even richer. Now, with the news of the debut of the "Galaxy" brand, it means that Geely’s huge brand matrix will add another one.
On the surface, the huge brand matrix seems to demonstrate the strength of Geely Automobile, but it is still difficult to determine whether too many sub-brands are good or bad for Geely. As for whether it can break the curse of Chinese car companies’ difficulty in promoting multi-brand strategies, it is even more difficult to judge.
There are many lessons from the past, how did Geely break the game?
Judging from past experience, there are few successful cases of Chinese car companies implementing multi-brand strategies. Among them, Chery, as a pioneer, once formed a multi-brand operation structure including Chery, Kerry, Ruiqi, Wellin, Kaiyi and Qoros. But a cruel reality is that almost all of the above-mentioned brands except Chery have failed, and Chery has also begun to divest sub-brands in the long process of development, and finally only brought Jietu and Xingtu two brands with a certain amount of volume.
A more recent example is Great Wall Motors. Although it formed five brands with Haval, Wei brand, Euler, tank, and Great Wall pickup truck, it was once brilliant. Wei Jianjun, the founder of Great Wall Motors, also once used "our Great Wall Motors and other car companies are different in the path of branding, because we build brands by category" to demonstrate the success at that time.
But a reality that can be seen is that in the organizational restructuring at the end of last year, Great Wall Motors began an all-round resource integration, with only one core, "ONE GWM", that is, a Great Wall. Several of its major brands no longer fight each other, but began to gather resources. And this, to some extent, has subverted the previous business philosophy of Great Wall Motors "one car, one brand, one company".
As for the reasons, it is also easy to understand. Having more children is easy to fight, but it is also more troublesome to divide the family property. Lin Shi, secretary general of the China-Europe Association of Intelligent Networked Vehicles, told the editor of "Dogo Talk Car" that the advantage of the multi-brand strategy is that it can launch more models to meet market demand, and it is also conducive to the sharing of internal resources of car companies. However, at the same time, models are easy to overlap in terms of positioning and price, which forms internal friction. In addition, sub-brands need to add teams in production and service, which requires higher management and marketing requirements for car companies.
What’s more, from the launch of Geely brand and Lynk & Co brand plug-in hybrid models, Geely’s overall electrification is almost inevitable. Whether the emergence of a new brand will plunder the market of Geely’s original new energy brand and fuel vehicle brand, and form internal friction with them, who can predict?
History is strikingly similar, but not today.
Yang Xueliang, senior vice-president of Geely, previously said in an interview: "The mid-to-high-end new energy series has three power forms: pure electric, plug-in hybrid, and extended range hybrid. The new series will adopt a new design language and intelligent configuration, and emphasize user direct connection in operation." According to market news, the positioning of "Galaxy" may be between geometric and polar krypton, focusing on 20-300,000 yuan market.
That is to say, intuitively, Geely’s new brand can be distinguished from Geely’s existing new energy sub-brands, but this may not be the reason why Geely can successfully implement a multi-brand strategy. After all, every Chinese car company that implements a multi-brand strategy has more or less different sub-brands, and even Great Wall Motor’s "category distinction" is more obvious, but Great Wall Motor still chooses resource integration.
As the saying goes, "history is always strikingly similar", Geely’s multi-brand strategy may not necessarily succeed. But as the saying goes, "today is different". A significant difference from previous years is that China’s new energy vehicles have developed very rapidly in recent years, and the new energy vehicle market is also growing rapidly. Data show that the penetration rate of new energy vehicles will increase to 25.6% year-on-year in 2022. There is no doubt that this is a terrible data and an opportunity for Chinese car companies.
In addition, when Chinese automakers pursued multi-brand strategies before, the technology of Chinese automakers was generally average, and the brand perception was relatively low-end. But today is different. Take Geely as an example, its vast architecture has become the cradle of luxury car brands such as smart and Jidu, and its Raytheon Hi-P/F hybrid system has also become a popular choice in the current market. The industry change initiated by new energy vehicles is reshaping the ranking of automakers. Participants believe that they can benefit from it, and Geely is obviously one of them.
However, it may be important to note that even if a multi-brand strategy is implemented, it is still necessary to ensure the strength of the main brand. No matter whether it is Ford, BMW, or Toyota, Tesla, Volvo, Mercedes-Benz, Volkswagen and other international well-known car companies, there are many sub-brands, but they still have a main brand that can stand alone and even resist fierce competition and changes in the economic cycle. Of course, whether "Galaxy" is a product series or a "brand" is still uncertain, and the meaning of the two is still different.
