“if they don’t make money, we’ll turn them off.
We can’t afford brands that don’t make money.
” This is what Tang Weishi CEO of global auto giant Stellantis Group said in an interview in July this year.
As soon as the news came out, many people speculated that Maserati, which did not perform well this year, would be sold because the brand’s sales performance completely fell short of overall expectations.
In the first half of this year, Maserati sold only 6500 new cars, down more than 50 per cent from the same period last year.
Affected by the decline in sales of its luxury brands Stellantis Group’s overall revenue and net profit also declined in the same period this year.
Of this total, adjusted operating income was 8.
463 billion euros, down 40% from the same period last year, while net profit was 5.
65 billion euros, down 48% from the same period last year.
Despite its poor performance Stellantis said it would not sell Maserati and the group would support Maserati unconditionally to ensure a bright future.
To make a comeback, Santo Ficili replaced Davide Grasso as the new CEO of the Maserati brand.
In the context of a significant decline in sales, the pressure on Santo Ficili can be imagined.
However McLaren the same ultra-luxury brand is not so lucky compared with Maserati the British sports car maker has changed hands twice this year.
Last month, it emerged that CYVN Holdings, from Abu Dhabi, had signed a non-binding agreement to buy McLaren’s car division with 100 per cent ownership.
Behind these events are in fact closely related to the financial pressure brought about by the significant deterioration in market performance.
From a global perspective, the general decline in brand sales is inextricably linked to the slowdown in the Chinese market.
More importantly, such difficulties are not limited to the two mentioned brands.
A number of well-known luxury brands, including Aston Martin, Rolls-Royce, Bentley and even Porsche, face similar challenges.
In China none of them were spared this year’s Guangzhou Auto Show Rolls-Royce was also absent from this year’s Guangzhou Auto Show in addition to Ferrari’s previous practice that it would not participate.
The year is approaching, whether to participate in the auto show to expand publicity or simply reduce the relevant marketing expenses, brands to make such a choice is obviously based on their own pressure considerations.
According to data from the Federation of passengers, total sales of imported ultra-luxury brands in September were 471, down 47% from a year earlier.
The cumulative sales from January to September were 4762, and the decline was as high as 60% from a year earlier.
How to make the annual sales data look better has become a common problem.
From the perspective of the overall market the overall sales of imported cars are also declining significantly.
Car imports in September were 55000, down 20% from a year earlier and 27% from a month earlier.
Considering the market stimulating effect of the “Golden Nine and Silver Ten”, Cui Dongshu, secretary general of the Federation of passengers, wrote that this was a “huge decline in September rarely seen in recent years.
” From January to September, domestic car import sales totaled 530000 vehicles, a slight drop of 4% over the same period last year, showing a negative growth trend for three years.
In terms of brands McLaren’s performance was the toughest with sales falling 88 per cent in the first three quarters of this year.
By contrast, although the declines of Bentley and Ferrari were relatively small, they both reached 44%.
Due to the absence of the 750s McLaren encountered unprecedented challenges in the Chinese market this year with only 26 new cars sold in the first nine months.
Looking back at 2022 and 2023, its annual sales were 310 and 219, respectively.
It is surprising that such a significant decline.
However, McLaren’s status quo no longer seems to be an exception, given that sales have fallen sharply even among better-known competitors such as Ferrari and Lamborghini.
In order to increase sales we have to reduce the price if we want to close the deal.
It is hard to imagine that the price war has also spread to the ultra-luxury car market.
And, unlike those popular brands that make profits of thousands or tens of thousands of yuan, ultra-luxury cars often cut prices by hundreds of thousands or even millions because of their high price base, and many ultra-luxury brand dealers are even selling at a loss.
Recently, a Rolls-Royce store in Guangzhou revealed a cash discount of 1.
11 million yuan for the five-seat Rolls-Royce Curinan in 2024.
When a product with millions of dollars was sold, the seller did not make any money, which was impossible in the past.
Not long ago, a letter to all employees of Harmony Automobile spread on the Internet, and even dealers of luxury and ultra-luxury car brands in China are facing the dilemma of pay cuts for all their employees, and the pressure on other dealers can be imagined.
When the pressure cannot be relieved, what is more, protest directly to the brand.
In May, dealers in Porsche’s Chinese market collectively sent a letter to its headquarters in Germany demanding compensation for recent losses on new cars sold.
Due to the continued pressure on the warehouse caused by falling sales, dealers are facing tremendous financial pressure, and about 65% of dealer investors have decided not to pick up cars.
Although there was no direct statement, the new president and CEO of Porsche in China, Mr.
Alexander Pollich, officially took office on September 1st, which fully demonstrates Porsche’s anxiety and sense of urgency about the current situation in the Chinese market.
In 2023, China will no longer be Porsche’s largest single market in the world.
In the first three quarters of this year, sales fell by nearly 30% again compared with the same period last year.
In the face of such market challenges Porsche is clearly in urgent need of a leader who can turn the tide.
Otherwise, the defeat in China will affect the overall situation.
After all, Porsche’s total sales in the global market increased only slightly last year, and the Chinese market has fallen again this year, and the decline in global sales is a foregone conclusion.
Everyone knows how important China is.
In this regard, when there are problems in the Chinese market, changing the coach has become a common tactic for car companies.
In addition to Porsche, Maserati has also replaced senior executives in China this year.
At the end of September, Yu Hanbang was appointed general manager of Maserati China, and how to revive brand sales has become the first problem in front of him.
In the twinkling of an eye electrification is like a stormy wave that has caught traditional luxury brands by surprise which is also one of the reasons for the decline in sales.
Although they have launched their own electrified products and related plans, at present, they always feel like “dealing with errands” and do not show full sincerity.
The electrification of luxury cars is not equal to the luxury of trams, but it is difficult for elephants to turn around.
For these traditional giants, thanks to the accumulation of technology and brand precipitation in the fuel era, they have already made a lot of money, unless there is something else.
Due to the added factors, it is really difficult for them to actively participate in the transformation of electrification.
Ferrari and Lamborghini, which are both declining in the Chinese market, for example, remain strong globally, especially in terms of revenue and profits.
According to the relevant financial information, Ferrari delivered 3383 new cars in the global market in the third quarter, down 2.
2% from the same period last year, but revenue increased 6.5%, 1.64 billion euros.
adjusted profit before interest, tax, depreciation and amortization was 638 million euros, an increase of 7.
1% over the same period last year.
In the first three quarters, total sales were basically flat, with only 9 more vehicles, but revenue growth was as high as 11%.
On the other side the situation of Lamborghini is similar.
From January to September 2024, the brand delivered a total of 8411 cars worldwide, an 8.
6 per cent year-on-year increase.
Revenue rose 20.
1% year-on-year to 2.
434 billion euros.
Although operating profit margin fell slightly, from 30.
5% in the previous year to 27.
9% this year, operating profit increased 9.
8% year-on-year to 678 million euros.
In the face of profound changes in the new energy vehicle market, although the two supercar giants have launched new energy products and Lamborghini has been transformed into a full hybrid brand with the launch of Temerario, it will take time for their all-electric models to be available.
According to the plan Ferrari is expected to launch its first all-electric model in 2026 while Lamborghini’s all-electric products will not be mass-produced until 2028.
In China, of course, no independent brand can threaten the status of ultra-luxury brands like Ferrari and Lamborghini, as well as Bentley and Rolls-Royce.
But whether it is a supercar or a luxury car, when new products are gradually overshadowed by new technology in the transition of the times, sales will inevitably fall.
For example, the fanatical performance of those who are prone to 800 horses has achieved power parity with the blessing of electric motors, and 200,000 to 300,000 new cars can also achieve the acceleration ability of those supercars.
On the other hand, with the concept of intelligence, trams have a more intelligent luxury, electric doors that can be opened and closed, and a quieter carriage atmosphere, which is not worth mentioning in the new energy era.
While these ultra-luxury brands, which are still resting on their laurels, when existing consumers do not see the highlights of the new products, they are naturally no longer willing to spend a lot of money to update their cars.
In this way, a luxury car is like an experience coupon, as long as you have it, you no longer want to buy a return ticket, because there seems to be no difference between going back and forth.
If the products haven’t been upgraded for more than ten years, even if they are updated, it always feels like a trifle.
The product replacement is like a mid-term change, and the medium-term change is like an annual upgrade.
in contrast, China’s new energy vehicles have been greatly changed every year, and the upgrading speed is beyond imagination.
After eating up the development dividend, there is not much room for the growth of the brand.
I dare not say that the ideal L9 or the M9 can be comparable to Rolls-Royce Curinan but for the Spectre Flash it is hard to say what advantage it has over China’s pure electric sedan.
Perhaps the biggest advantage is the logo, but it seems to be limited to that.
Most people still have serious misgivings about the electrification process of these traditional ultra-luxury brands.
Indeed these skeptical people are not the target customers of Rolls-Royce.
Rolls-Royce owners do not need any voice control, they have long been used to the convenience of not having to operate in person, and they only need to ask the driver for anything.
people who buy Ferrari will never care about autopilot assistance.
because for them, nothing is more important than pure driving fun.
There is no doubt that Chinese cars are making progress.
But there is no doubt that there is no threat to the status of ultra-luxury brands.
However, in the process of building the automobile pyramid, the order is constantly broken from the bottom up.
While the Ferraris at the top remain solid, the luxury brands in the middle, such as Porsche, are on pins and needles.
Porsche’s sales in China have fallen sharply this year, which is closely related to its slow electrification transformation.
In 2019, Porsche launched its first all-electric model, the Taycan, which was stunned as soon as it was unveiled.
However, when Porsche introduced its second all-electric model, the Macan EV, this year, the general reaction was disappointment.
Five years later we haven’t seen much technological progress in Porsche and these two electric cars.
In contrast, self-branded new energy vehicles have undergone earth-shaking changes.
From 400V to 800V platforms, from voice interaction to intelligent cockpits, and from diagramless navigation (NOA) to end-to-end large model applications, every technology is the industry’s leading level.
As a result, we have seen brands such as look up, momentum, Weilai and QQ continue to push towards the luxury market, which makes not only Porsche but also traditional luxury brands such as BBA feel very nervous.
After all, the truth that “those who win China will win the world” has long been realized in the course of their deep cultivation of China for decades.
Indeed it is difficult for independent brands to shake the status of ultra-luxury brands at present.
But companies have to make a profit after all, whether for economic reasons or market changes, a fact that can not be ignored is that the market share of these ultra-luxury brands in China is rapidly shrinking.
How to deal with it is the fundamental way.
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