DS stages a comeback and presses the "Restart" button

The position of French cars in China has been embarrassing in recent years, especially DS, which is positioned as a high-end brand, with its confident product design and declining sales volume. At the end of 2019, it was finally "abandoned" by the two major Chinese and foreign shareholders. Fortunately, Baoneng Group takes over the market to allow DS to return to the market and leave a glimmer of life.

After a one-year adjustment period, DS returned to sail again. The brand plans to launch its first new car DS 9 on March 23 this year. In addition, according to Baoneng Automobile's plan, DS's first pure electric SUV DS 3 may be introduced to the domestic market this year. The DS 3 pure electric version is based on the overseas fuel version and is positioned as a small SUV. It is DS's first pure electric model.

When DS made up his mind to enter the Chinese market, it must have not expected that French aesthetics would repeatedly hit a wall here. After all, the birthplace of DS, Paris, France, is a famous fashion capital of the world.

Are Chinese consumers no longer insensitive to luxury brands? Obviously not. According to consulting firm McKinsey & Company, by 2025, the global luxury goods market value will increase by 1 trillion yuan to 2.7 trillion yuan, and Chinese consumers will digest up to 40% of the luxury goods in the global market. .

High-end brands still have huge room for development in China, and DS's failure in China still has to find its own reasons.

DS's poor performance in the Chinese market is mainly due to the unclear brand positioning, and Chinese consumers cannot understand its brand positioning and connotation. An industry insider said: “Compared with the energy invested by other brands in marketing, DS is very confident in its brand influence and seldom pays much attention to publicity.”

The problem broke out in 2016. In the same year, the cumulative sales of DS for the whole year were 16,100, a year-on-year decline of 34%, so it fell out of the top ten sales in the domestic luxury car market. The performance of over 10,000 did not last long. In 2019, it hit a record low. DS sold only 2,058 vehicles in China throughout the year, a year-on-year decrease of 38.66%.

After years of struggling to make ends meet, Changan Automobile and PSA Group had to shed their heavy burdens. On the last day of 2019, Changan Automobile announced that the company and Shenzhen Qianhai Ruizhi Investment Co., Ltd. signed an "Equity Transfer Agreement" to transfer all the 50% equity of Changan Peugeot Citroen Automobile Co., Ltd. (PSA) held by Changan Automobile To Qianhai Ruizhi, the transfer amount is 1.63 billion yuan. It is worth mentioning that Qianhai Ruizhi is a 100% controlled subsidiary of Baoneng Automobile Co., Ltd., which means that all the shares of Changan PSA will fall into the hands of Baoneng Automobile.

The cooperation between PSA Group and Changan Automobile ended in failure, but the DS brand does not seem to be ready to withdraw from the Chinese market. In November 2020, the DS brand officially issued a statement stating that PSA Group appointed Li Xinyang as the new general manager of DS Brand China to replace Nicolas Monnot, who is about to take up a new position within PSA Group. At the same time, Li Xinyang will continue to be responsible for the group's sales and marketing in China and continue to serve as a member of the executive committee of PSA Group China.

Soon after Li Xinyang took office, DS's new model DS 9 was launched on the 23rd of this month. After experiencing a failure in the Chinese market, why does DS still have to return to the Chinese market?

China is the world’s second largest auto market. Despite the impact of the epidemic last year, the Chinese auto market fell by more than 6% and passenger car sales fell below 20 million. However, in such a difficult situation, the domestic luxury car market is still Growth against the trend. The data shows that from January to December 2020, the cumulative sales of the domestic luxury car market is about 2.5291 million units, a year-on-year increase of 14.7%. It is the only market showing positive growth among the three major market segments.

In recent years, the auto market has entered a stage of slow growth, but it has also been accompanied by consumption upgrades. Previously, some agencies predicted that luxury brands would rise steadily, and it is expected that they can achieve a growth of about 10% in 2021. Today, luxury cars have formed a luxury car brand with Mercedes-Benz, BMW and Audi as the first echelon and Volvo, Lincoln and Cadillac as the second echelon. Not only that, domestic independent brands are also making continuous efforts to launch their own high-end brands.

DS must have done a lot of preparation in the early stage of returning again. Although the competition of luxury car brands is fierce, this happens to illustrate the unlimited potential of this market.

A thriving environment is only a prerequisite for a successful resurrection, not a necessary condition. Whether it can counterattack in the end depends on the various links of the brand, from research and development to production to sales. Any missing link in the middle will bring unpredictable consequences.

Different from the previous lofty ideals, this time DS is committed to becoming a small and beautiful brand. Li Xinyang, general manager of DS China, said at the event: "We have reached a consensus internally to create a unique "small and beautiful" high-end French brand."

Li Xinyang has been in the automotive field for more than 20 years and has extensive industry experience. Soon after taking office, he proposed that 2021 will be the "starting year of a new departure" for DS, reshaping the brand, releasing a new brand strategy, a new product portfolio, a new marketing idea and an experience platform.

The first car after the return, the DS 9, opened for pre-sale in early March. The new car is divided into a fuel version and a hybrid version, equipped with a 1.6T engine, and the starting price is 299.99 million yuan. When the information was released, some people in the industry were not optimistic about the 1.6T engine and the starting price of 300,000 yuan, and believed that the price was too high. In the same class, there are Mercedes-Benz C-Class, BMW 3 Series and Audi A4L models for consumers to choose from.

The brand effect is indeed favored by many users, but for some young people, they are no longer just pursuing big logos and top-tier big names. High-end, individuality, and uniqueness have prompted them to shift their attention to niche brands with distinctive personalities. DS's concept of "small and beautiful" this time is very consistent with the current consumer outlook of some young people. Clear user positioning has become a key factor for DS to regain a new life.

Summary: Although DS has a mediocre performance in my country, it has never thought of exiting the Chinese market. In this return, Li Xinyang, who plays the role of the firefighting captain, needs to reverse the brand's stereotype left by people, and the pressure on him is indeed not small. However, as long as you are willing to spend time and energy to think, DS counterattack can be staged again.