Volvo Li Jingye: Smart cars and new energy vehicles are naturally suitable for direct sales

At the 19th Shanghai Auto Show, Volvo Cars made its debut with the new XC60. The brand also signed a cooperation agreement with Didi Chuxing, and Volvo will provide Didi Chuxing with its technical support and vehicles at the autonomous driving level.

The global auto industry is facing major changes unseen in a century. “Software-defined vehicles” has become a general consensus in the industry. 5G, big data, cloud computing and other technical means are accelerating the restructuring of the industry. This is bound to promote the evolution of automobiles from a “hardware-based” industrial product to a personalized intelligent terminal. However, the road ahead is still full of thorns.

According to Yuan Xiaolin, senior vice president of Volvo Car Group, president and CEO of Asia-Pacific region, in the context of the times, everyone will use different interpretations to try to influence the future. This is a process of seeking new consensus, and this process will be long and complicated. .

“No one can accurately predict the future, but you can control yourself. For Volvo Cars, it is to be yourself in this context, that is to embrace change with a very open attitude, it is ‘harmony without difference’, and in addition , Volvo also needs some more attractive changes, so that consumers feel that this is what I need, want, and desire.” Yuan Xiaolin said in an interview with Caijing Automobile.

If the “needs, wants, and desires” that Yuan Xiaolin said are embodied, then it is the core concept of the Volvo car brand – health, safety and sustainability.

“The development of science and technology and the creation of social value are all people-centered values.” Yuan Xiaolin said: “When health, safety, and sustainability are presented in detail, they will pass through the product design, manufacturing, distribution, and services we touch. Value in every field.”

“Smart driving is not a revolution

but innovation”

It is understood that the new XC60 unveiled at this auto show is equipped with the second-generation Pilot Assist intelligent navigation assistance system and achieves full-speed coverage. At the same time, the City Safety urban intelligent safety system has also evolved again. Among them, the upgrade of ADAS functions such as rearward automatic braking and emergency parking assistance can effectively eliminate safety blind spots around the body.

In terms of software, the new XC60 is equipped with the iFLYTEK voice system, and a large number of operations can be done in just one sentence.

Volvo Li Jingye: Smart cars and new energy vehicles are naturally suitable for direct sales

▲ Photo courtesy of the company

In addition, as a mid-term facelift model, the biggest change in the new XC60 is at the power system level. The new car has added a 48V mild hybrid system in the power system, and is also equipped with a new generation of 2.0T turbocharged engine, which is still matched with an 8AT gearbox in terms of transmission.

“The pursuit of a brand is not ‘have’ and ‘no’, ‘can’ and ‘can’t’, but when you can do ‘can’, you have to choose ‘do’ or ‘don’t’.” Yuan Xiaolin Said: “The new XC60, in the range of 0-130Km/h, can realize automatic following and steering, the convenience and real value it can provide far exceed some eye-catching titles. What is tangible is the actual presentation for all consumers, not telling a story, or something far from consumers.”

It is worth mentioning that at the auto show, Volvo Cars and Didi Chuxing formally signed a strategic cooperation agreement, promising to provide vehicles for Didi Chuxing’s autonomous driving technology research and development. This is also a brand new step after the two parties jointly launched the XC60 self-driving taxi service in Shanghai last year, marking a new stage in Volvo Cars’ exploration in the field of autonomous driving.

Yuan Xiaolin believes that enterprises should find a balance between their own value pursuit and business sustainability. And the hardest part is coming up with a solution. “The solution is not to set a goal, or a number, but a comprehensive set of KPIs and a healthy balance that presents a valuable example to clients.”

“Intelligent driving is not a process of revolution, but a process of rapid innovation.” Yuan Xiaolin said: “The car is still running on the road, and all the imagination and ideals about the future are a process of gradual exploration and development.”

It is reported that before signing the contract with Didi Chuxing, Volvo Cars has reached cooperation with UBER, Waymo and other companies around the world.

Enterprise innovation is not a concept of “throwing money”

According to official Volvo data, the Chinese market will contribute 166,300 vehicles in 2020, a year-on-year increase of 7.6%, accounting for 25% of global sales. Specifically, since April last year, Volvo Cars has achieved double-digit growth in the Chinese market for 12 consecutive months. The cumulative sales volume in the first quarter of this year was 45,200 units, a year-on-year increase of 118%, setting a record in the history of the Chinese mainland market. Best first quarter sales record.

The performance of a company will fluctuate up and down, some factors are controllable and some are uncontrollable, but the company can still survive and survive very well. One of the important points is to have a clear corporate image.

In Yuan Xiaolin’s view, Volvo Cars has always been committed to providing consumers with safe, healthy, sustainable and personalized solutions. This is not because of absolute technology and absolute product capabilities, but because of Volvo Cars’ value pursuit and customer needs.

“The company’s business is never limited to technology, nor is it about some absolute values. It is always based on the pursuit of value, and then continuously strengthens the process of product experience and service.” Yuan Xiaolin said.

Today, the electrification transition is an important part of Volvo Cars’ sustainable strategy, which seeks to continuously reduce the carbon emissions level of each car over its life cycle. Based on the growing consumer demand for pure electric models and the continuous popularization of charging infrastructure, Volvo Cars has put forward the goal of becoming a pure electric luxury car company by 2030. In the future, Volvo Cars’ pure electric models will gradually replace all models with internal combustion engines, including hybrids.

However, all of this covers the entire value chain of vehicle manufacturing, supply chain management, and operations.

“Enterprise innovation is not a concept of spending money. Only when the value chain is in an optimized state can the entire industry develop healthily.” Yuan Xiaolin believes that the value chain of the automotive industry is unchanged, and the changes brought about by trends are only reflected in various aspects of the value chain. The role and proportion of the link in it.

“As the core of the entire value chain, OEMs must make good use of new technologies, make good products, establish an efficient, unified, and timely feedback system, and maximize the value of all participants, so as to generate strong productivity. The main role of merchants is to reflect value in network layout, customer reception, customer service, and the provision of derivative products.” Yuan Xiaolin said.

Today, the development of digital technology and changes in people’s consumption habits have provided the possibility of direct sales, which gives people more opportunities to learn about products online rather than going to 4S stores.

“We must gradually optimize how to let consumers know a lot of information about products, brands, and services without visiting on the spot. Therefore, the direct selling model is to apply technology well in the value chain and play a role in Distribute well and give full play to their respective advantages.” Yuan Xiaolin emphasized.

XC40 pure electric version opens “official direct sales mode”

But still need offline service

Starting from the launch of the brand’s first pure electric model, the XC40 pure electric version, Volvo Cars has officially launched the official direct sales of pure electric vehicles. Car selection and payment are completed on Volvo Cars’ official website and WeChat applet.

According to Li Jingye, vice president of new business development of Volvo Cars Greater China Sales Company, smart electric vehicles are naturally suitable for the official direct sales model, and it is also the best choice for traditional car companies to test the waters in the exploration of sales models.

On the one hand, new energy models have fewer optional configuration categories than traditional fuel vehicles; on the other hand, smart cars have also made significant progress in the field of OTA upgrades. After the continuous promotion of new power car companies, the OTA of vehicles, especially the OTA upgrade of the whole vehicle, is becoming an important part of the after-sales service of automobiles.

“Simpler things are more suitable to be sold online. Originally, if you want to upgrade the hardware and software of traditional fuel vehicles, you must go to 4S stores to solve the problem, but in the era of smart cars, you only need to charge and connect to the Internet, just like updating the system of a mobile phone. Smart cars and new energy vehicles are naturally suitable for direct sales.” Li Jingye told Caijing Auto in an exclusive interview at the auto show.

▲ Li Jingye, Vice President of New Business Development of Volvo Cars Greater China Sales Company

Different from the new forces that need to build sales channels from scratch, Volvo Cars already has a large-scale dealer network, and 4S stores can directly serve as offline showrooms, delivery centers and after-sales centers in the direct sales model. Test drive experience of the intended model, and the after-sales service network is also very mature.

To put it simply, under the “direct sales model”, the roles and proportions of OEMs and dealers in the value chain of the automotive industry have changed. As the core of the entire value chain, OEMs need to establish a transparent price system and unified service standards in addition to making good products; while dealers need to provide value in network layout, customer reception, and derivative products. Not “price wars” with other dealers to attract customers.

Under the “official direct sales model”, Volvo’s dealers no longer have inventory pressure, and the main profit method is to sell each car to get a corresponding commission; but compared with the traditional 4S store model, Volvo’s attitude towards dealers’ service The assessment standard is more stringent, and the service ability will be directly linked to the commission.

In fact, at this auto show, many traditional car companies chose to test the sales model of “direct sales” or “official direct sales + offline partners” in their new energy models, such as the pure electric smart car released by Geely The brand Krypton announced that it will build a new direct sales system, and SAIC Audi will introduce an “agent system” model. The initial plan is to build about 200 urban exhibition halls in about 80 cities.

From the perspective of car companies, they have the need to connect with consumers at zero distance. The “direct sales model” breaks the barriers of traditional 4S store dealers, reduces channel costs, and has transparent pricing. In the post-maintenance service, the direct sales model is also more transparent; the model based on sales and production can also reduce the cost of parts suppliers. Inventory, reducing the “cycle attribute” of the overall industry.

Dealers are also seeking opportunities to partner with OEMs, a need that has expanded during the pandemic. Accenture’s latest report on auto sales in China shows that the average time it takes for dealers to sell a car in stock during the pandemic has increased from 52 days to 81 days. About a third (25-36%) of dealers said new car sales were not profitable for them.

This trend is closely related to the unique consumer ecology when smart cars were born. As the age of users is getting lower and lower, consumption scenarios are also changing, and the proportion of online shopping is getting higher and higher; with the digitization of the mainland market, the mode and cost of customer acquisition are changing, and many online customer acquisition tools Already very mature; dealers are also clearly realizing that consumers entering 4S stores are now more informed than ever.

“The OEMs need to control customers through online channels, which can be said to be expensive or very low, because this is not a channel that relies on manpower. But direct sales does not mean that 100% of sales are online. The online and sales stores have disappeared. Generally speaking, consumers still need an offline consumption experience, or they still need to go to 4S stores or experience stores and contact the brand to see what the products are like.” Accenture Greater China Cai Shenjun, managing director of the automotive industry, told Caijing Auto.

Although the direct sales model has become the direction explored by major traditional car companies, at present, the official direct sales and offline dealers will coexist for a long time. In Volvo’s direct sales model, dealers no longer have sales and inventory pressure, and will focus on serving customers better, which is a very beneficial exploration for dealers, users and OEMs themselves.

“Our model still relies heavily on offline services. They have to help complete sales, especially for fuel vehicles. In addition to delivery, after-sales and trade-in are still offline.” Li Jingye said.

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