Lantu Auto’s 2022： Everything is ready, just short of sales？

2022 has come to an end, and the automakers’ annual rhetoric has also reached the moment of verification. As the saying goes, saying goodbye to the old and welcoming the new, only by saying goodbye to the old can we live up to the new.

Tan Qing said that the AI team specially planned the annual inventory topic, and looked back at the car companies that had not completed the annual sales target KPI, hoping to be able to face shame and then move forward bravely in the new year.

In today’s issue, let’s talk about Lantu Automobile. In early 2022, Lantu Automobile CEO Lu Fang put forward the annual work goal at the company’s annual work meeting: annual sales of 46,000 vehicles and annual production of 48,000 vehicles. But on July 8, the company adjusted the annual sales target to: annual sales must reach 31,000 vehicles, challenging 37,000 vehicles.

Now that 2022 is coming to an end, Landmap only completed 17,700 sales in the first 11 months, with a completion rate of 56.94%. According to this trend, it is almost impossible to complete KPIs.

At the beginning of the Lantu project,Zhu Yanfeng, chairperson of the group, once said: "You have to run at the beginning, and you have to sprint at the beginning." Standing today from the perspective of Lantu’s sales, Lantu’s sales did not run, even if it started the sprint mode.

In the first half of 2022, Lantu’s monthly sales have been hovering around 1,000 units. In order to boost sales, Lantu Automobile held a cadre meeting in July 2022 and announced the largest senior personnel adjustment since its establishment.

It is reported that this job change involves a number of executives, including the top manager, Lu Fang, who will no longer serve as the chief technology officer (CTO) of Lantu Automotive and will be replaced by Wang Junjun, but Lu Fang will still serve as the CEO of Lantu.

At the personnel adjustment meeting of Lantu, Zhu Yanfeng, chairperson and party secretary of Dongfeng Company, and You Zheng, a member of the Standing Committee of the Party Committee of Dongfeng Company, deputy general manager and chairperson of Lantu Automobile, both made speeches and stated that they would go all out to achieve the annual business goals and achieve a rapid increase in sales.

It is not difficult to see that the long-term sluggish sales of Lantu have aroused the concern of Dongfeng executives. In fact, at the beginning of this year, Lantu set a sales target of 46,000 vehicles for the whole year, and only less than 15% were completed in the first half of the year.

In May, Lantu once again held a "100 million vehicles" mobilization meeting, clearly requiring that in the next 100 days, the sales target of 10,000 vehicles should be fought. But before the 100 days, at the mid-year work meeting in early July, Lantu lowered the annual sales target to 31,000 vehicles.

Even so, for Lantu, which only completed 17,700 vehicles in the first 11 months, only 56.94% of the target of 31,000 vehicles was completed. According to this tepid market performance, if Lantu wants to complete the target after the target adjustment, it is almost impossible to sell 13,300 vehicles in the last month.

After some personnel adjustments in July, from the month-on-month sales data, Lantu’s sales seem to have improved slightly. From July to October, monthly sales were 1793, 2429, 2519 and 2553 respectively.

Unfortunately, by November, the stamina for personnel adjustments seemed to have run out, and monthly sales fell again to 1,508 units, even lower than the 1,553 units in January.

It should be noted that during the period from July to October, there were still some "moisture" factors in the sales of Lantu. On July 16, Lantu Dreamer officially launched the delivery of the first batch of car owners. On the day of delivery, 97 central enterprises, state-owned enterprises, and major customers purchased and signed 6,000 Lantu Dreamers.

If the priority delivery is these large customers, during the July-November period, the 6,000 orders signed at that time are almost complete. In other words, B-end orders have contributed significantly to the increase in monthly sales in recent months.

However, automakers cannot survive in the long term by relying on the B-end market. Once this part of the market is saturated, it will have a huge impact on enterprises. BAIC New Energy is a precedent.

November’s sales have been falling at a rate visible to the naked eye. In the days to come, can Lantu still find the next batch of revered B-end customers?

The loneliness of the first two cars may be hopeless, but it cannot stop the new car released by Lantu. On the evening of December 15, Lantu Chasing Light officially debuted, priced between 30-400,000 yuan, intending to impact the high-end car market.

The release of the car chasing light means that starting from the launch of the first model, Lantu FREE, in June 2021, Lantu Auto has deployed three models in a year and a half, spanning the fields of SUVs, MPVs, and sedans.

Optimistically speaking, the product layout of Lantu is relatively complete. But compared with Li Auto, the latter has only sold the ideal ONE car for so long. So from another perspective, it may be helpless for Lantu to frequently layout new models in a short period of time.

Overall, looking at the performance in 2022, Lantu’s big moves can be described as one after another, but the sales volume has never been improved.

Poor sales directly affect Lantu’s profits. In 2021, Lantu Auto’s operating income was 1.77 billion yuan, and the annual net loss was 700 million yuan. In the first half of this year, Lantu Auto’s net loss reached 740 million yuan, and the cumulative loss in the past year and a half exceeded 1.40 billion yuan.

According to the sales volume and net loss in the first half of this year, the average net loss of each sold car is 130,000 yuan. It can be seen that Landscape urgently needs to rely on large sales to amortize the huge investment costs in the previous period, but this does not seem to be easy.

Although Lantu has a dream to benchmark BBA, in reality, Lantu is actually a fledgling waist brand. According to Tianyancha, Lantu Automobile was established in 2018. Even though it is backed by Dongfeng Motor Group, compared with the century-old BBA, there is still a big gap in cultural heritage and market foundation.

For consumers, if they want to persuade them to buy a luxury car, it is not enough to have product strength alone, but also the core selling points that can support the brand’s high-end image.

In terms of creating a sense of luxury, Lantu FREE is equipped with the world’s first one-piece liftable triple screen, as well as welcome modes VOYAH Moment, VOYAH Attention, and VOYAH Care to create a sense of exclusive atmosphere. This direction is indeed correct.

However, in terms of hardware configuration, Landscape used the backward NXP i. MX8 chip, which caused the fluency of the car and the software optimization ability to keep up in time, which attracted many car owners to complain. To remedy this, Landscape released a service package to upgrade the 8155 cockpit chip in May this year, which cost the owner 12,999 yuan to upgrade.

In contrast, Extreme Krypton, which is also a luxury new power brand, happily announced that it would upgrade the cockpit chip to Qualcomm 8155 for free after a similar car card appeared. This quickly reversed Extreme Krypton’s reputation and gradually increased its sales.

Therefore, Landscape has spent a lot of effort to create a sense of respect, but due to improper handling of the car and machine card problem, it has left a bad reputation.

On the surface, it seemed innocuous, but a glimpse of the whole leopard showed that the team of Lantu did not pay enough attention to the sense of technology, and seemed to follow the crowd to make some eye-catching flower work.

Little do they know that in the context of the intelligent era, creating a sense of technology is a shortcut for new power brands to improve high-end brand perception, and it is also a product highlight that is easier to shine. If there is a mistake in this part, how can we compete with BBA, which has a deep foundation in the brand, for the market?

In addition to the sense of technology, in terms of battery safety, Lantu also wants to come up with convincing self-developed technology. But under the test of ruthless high temperature, it is too difficult to make battery safety a product highlight.

In June this year, there was a video on the Internet showing that a Landmap FREE caught fire near the charging pile. In the hot summer weather, it is the season when the battery spontaneous combustion is high, and it is not a big deal.

But bad is bad. Before that, Lantu had always emphasized "battery safety" in its brand promotion. There have been many car review articles that have hyped Lantu’s battery safety, and many headlines have shown full confidence in battery safety technology.

For example, "Why did Xiaopeng, Tesla and other trams spontaneously ignite, but Lantu FREE did’no smoke or fire ‘", "New energy vehicles spontaneously ignited one after another, and Lantu finally cracked the battery security password and refreshed the industry record". These articles seem to tell users that other battery safety is almost meaningless, and only Lantu’s technology in battery safety is impeccable.

After the spontaneous combustion accident, the Lantu official said, "There was no loss of personnel or surrounding property, and we are actively investigating the cause of the accident together with the supplier." However, the specific cause of the spontaneous combustion has not been searched online for the official explanation of the Lantu official.

In fact, as early as when the Lantu brand released its proud mica and amber batteries, not catching fire was the advantage advertised by the manufacturer. But interestingly, after this spontaneous combustion accident, Lantu’s "non-burning golden body" has been broken. According to incomplete statistics, in terms of publicity, Lantu’s dissemination of battery safety technology does not seem to be as high as before.

Perhaps Lantu’s battery safety technology still needs to be strengthened, and before it is truly safe, battery safety is not enough to be a plus for Lantu’s product strength.

In general, for new luxury car brands, if they want to compete with first-tier brands in the market, they need to come up with their own core selling points and have their own differentiated competitiveness that is enough to impress users. Lantu is indeed working in this direction, but from the perspective of making up for the car’s machine card and battery safety, the degree of effort is not enough.

LANTU FREE has been benchmarking Ideal ONE since its inception. Both players on the extended range track have very different fates. Ideal relies on Ideal ONE to carry the banner of a brand, but LANTU FREE gradually disappears from everyone.

In fact, the range extension technology was not complicated. Lantu was backed by Dongfeng, a big tree, and never lacked the funds and resources needed to build a car. But why couldn’t Lantu learn the ideal ONE?

In the opinion of AI, compared with the ideal ONE, the biggest problem of Lantu is that the product positioning is not clear enough.

The positioning of Ideal ONE is quite accurate. In terms of market segmentation, Li Auto divides consumers in the Chinese auto market into family users and non-family users. With internal discussions and iterations, the final consensus is that for Li Auto, the concept of "family user" refers to family users with (one or more) children aged 0-14 at home.

Looking at Landmap again, when talking about the difference between the user population and Li Auto, Lei Xin, the former chief brand officer of Landmap, once said, "The target audience of Landmap FREE is a new backbone who is steady and enterprising, exploring and trying new things. Steady and enterprising, steady progress, not radical, not conservative." In the opinion of Zhu Yanfeng, chairperson of Dongfeng Company, Landmap’s target audience is a "new backbone" force with a good educational background. They respect dignity and friendship, pursue freedom and freedom, and hope to have a tasteful car life.

Therefore, from the perspective of product positioning, Ideal ONE has accurately considered the user’s family members compared to Landscape FREE, while the latter only knows that its users are "new backbone" groups without clear portraits.

If a model cannot establish a clear and perceptible product image in the minds of consumers, the decision-making cycle of consumers will be lengthened, and after a period of hesitation, other competing products may be selected. Therefore, Lantu’s claim to build a "user-oriented technology enterprise" is only a "self-moving" speech, not a closed loop.

One consequence of inaccurate positioning is not knowing where to spend the cost.

Ideal ONE can be recognized by the market because it captures the real demand of home users for cars: six-seat large space. At this time, there can be trade-offs in the resources invested in car building, such as ideal engines, motors, car systems, chips, etc. from suppliers.

When the policy determines that the pure electric battery life can enjoy subsidies above 50km, the pure electric battery life is 51km of the pressure line. By subtraction, the ideal not only meets the user request, but also reduces the cost.

In terms of displacement and structure, the Landscape FREE is equipped with a 1.5T four-cylinder engine (the ideal ONE is 1.2T three-cylinder). In terms of rated power generation, the Landscape FREE 60Kw is also higher than the ideal ONE of 45Kw; even in terms of ride comfort and NVH, the Landscape FREE is also better than the ideal ONE. On the contrary, on chips that should not save money, Landscape is slightly stingy when upgrading chips.

But unfortunately, users are not looking at parameters. In terms of parameters that are difficult for users to perceive, Lantu FREE seems to have given a lot of sincerity. In fact, it is doing useless work in places that users don’t care about at all, and it also eats part of the profit.

The root cause of entering such a misunderstanding is that the market positioning of the product is not clear enough, and the actual needs of the so-called "new backbone" group cannot be discerned.

Perhaps it was because Lan Tu was unable to differentiate its competitive advantage, so when it was disseminated to the outside world, Lan Tu had to emphasize its "national team" attribute.

"Lantu is positioned as a high-end new energy vehicle brand in the national team," said Liu Zhanshu, deputy general manager of Lantu Automotive Sales and Service Co., Ltd. "Our direct competitor is the BBA after full electrification."

At this year’s Chengdu auto show, Lantu launched the "official revision" of Lantu’s FREE DNA. According to Liu Zhanshu, "Tai Chi Black and Tai Chi White are two colors derived from the traditional Chinese Tai Chi culture, which can show the layered sense of Chinese ink and wash, creating a unique Chinese color."

In fact, for a waist brand, if the car has not sold much, but often endorses the product in the name of China and the country, I am afraid it will only give people a sense of "A Dou who can’t be helped".