Another luxury car brand will start pure electrification! And it comes from Toyota, one of the leaders in the automotive industry.
Recently, news has spread that Toyota's luxury brand Lexus may start full electrification. According to the latest news about the all-new Lexus ES model, the new car is expected to debut within this year or 2025 at the earliest, and is expected to be available for sale in the first half of 2025. And this time, it's not just a minor upgrade, but a complete discontinuation of the gasoline version, officially entering the era of pure electrification.
In fact, with the rise of new energy vehicles, Toyota's position in markets such as China has begun to shake. Therefore, Toyota began to try electrification transformation to avoid falling behind in the new energy trend. Among them, Lexus became the vanguard. According to the plan, in the process of Lexus electrification, it is not only necessary to share the sales pressure for Toyota as a whole, but more importantly, to connect the entire process of electrification supply chain, production, and research and development.
Lexus is beginning to move towards full electrification, which is considered an important move for Toyota to test electrification. Behind this, Toyota's multi brand strategy is actually playing a role.
Multi brand strategy, the "winning weapon" of industry leaders
As early as 1983, Toyota established the Lexus brand to expand into the North American market, targeting the luxury car market. Later, with the popularity of the Lexus brand in the United States, Toyota also smoothly entered North America and became a global brand.
In 2002, Toyota reorganized a team in North America to cater to the needs of young people, specializing in producing fashionable and popular car models. Subsequently, Toyota named this team the Sean. Sain has gradually evolved into a new brand under Toyota.
In addition, Toyota has acquired brands such as Daihatsu and Hino through acquisitions, further enriching its brand matrix. At this point, Toyota has acquired brands such as Toyota, Lexus, Sean, Daihatsu, Hino, etc.
With its multi brand strategy, Toyota once became the world's largest car company. Today, facing the trend of electrification, although the large Toyota company is unable to complete a giant turn around in a short period of time, Lexus can play a "vanguard" role and promote transformation in a relatively stable way.
Analysts have pointed out that compared to Toyota, Lexus has a lighter historical burden, which has instead become its advantage in letting go of its transformation. For Toyota, fortunately, it was only through its early multi brand strategic layout that it was able to flexibly transform in the current changes.
Multi branding strategy refers to a strategic plan in which an enterprise, after reaching a certain level of development, uses a well-known brand it has created to extend and develop multiple well-known brands, which are independent of each other and have certain connections. Strict market segmentation and collaborative external efforts are implemented among various brands, known as "brothers not fighting". The ultimate goal is to use different brands to occupy different segmented markets and work together to seize market share from competitors.
In the automotive industry, another company that has successfully adopted a multi brand strategy is General Motors of the United States. After a century of development, General Motors has multiple well-known brands worldwide, including Chevrolet, Buick, Cadillac, etc., and meets the needs of different user groups through differentiated brand positioning. For example, Chevrolet emphasizes cost-effectiveness and family use, while Cadillac emphasizes luxury and high performance.
In order to better enhance the synergy between multiple brands, General Motors has also constructed a global layout of the entire industry chain, from design, production to sales and after-sales service, forming a complete industry chain. This allows various brands of General Motors to flexibly respond to changes in market demand.
An automotive industry analyst pointed out that a multi brand strategy is currently the choice of most mature car companies, especially brands that focus on globalization and scale, because multi brands are based on different concepts, products, and service positioning, and can meet different user needs in different price ranges and segmented markets.
After all, in the process of globalization, the R&D, manufacturing, and supply chain fronts of automotive companies have been extended, and it is necessary to maintain a certain degree of flexibility in order to effectively respond to various risks. Multiple brands can share the R&D, production, marketing and other resources of automotive companies, significantly reducing costs and improving efficiency. In addition, car companies can allocate resources such as research and development, production, and marketing reasonably based on the strategic position of each brand and the market goals of different regions, ensuring that each brand can receive sufficient support and development.
Under the trend of electrification, NIO's brand advantages have emerged
In the era of intelligent electric vehicles, consumers have a higher tolerance for new brands, which is actually more conducive to car companies building multiple brands. In addition, the automotive industry has undergone significant changes, especially in the development of vehicle models. Regardless of the price range of the vehicle, the code cost is basically the same. This brings more feasibility to the implementation of multi brand strategy.
Intelligent electric brands, including NIO, have begun to effectively reduce research and development costs and supply chain costs through a multi brand strategy, helping the company significantly improve profitability. Of course, a multi brand strategy places higher demands on the comprehensive capabilities of automotive companies in terms of organization, technology, and more, especially in supply chain management and intelligent manufacturing.
Based on the laws of the automotive industry, especially the forward-looking judgment of the development of the intelligent electric vehicle industry market, NIO has been brewing a multi brand strategy since its establishment in 2014. On May 15th, NIO's new brand "ONVO Le Dao" was officially released, and its multi brand strategy was officially implemented. Thanks to its accumulation in technology, products, services, and community over the past 10 years, NIO has also become the fastest company among new forces to complete a multi brand strategic layout.
The Ledao brand and NIO brand models are produced together in two world-class full chain digital intelligent factories located in Hefei. The company has established advanced intelligent manufacturing technology and quality management system, with the goal of becoming a "global quality benchmark". At the same time, it has also created an evaluation system for "excellent quality partners", leading the innovation of industrial chain cooperation models, promoting supply chain co creation and reshaping, and more than 300 excellent industry supply chain partners have effectively supported the Ledo brand. A mature manufacturing, quality, and supply chain management system has laid a solid foundation for Ledao's large-scale and high-quality production.
Regarding the rumored third brand, Li Bin, founder, chairman, and CEO of NIO, revealed for the first time the positioning of the three brands during a recent financial report conference call: "Currently, the positioning of the three brands is very clear. NIO is positioned in the high-end market, targeting both business and family groups;"; ONVO Ledao targets mainstream home market users; Firefly Firefly is positioned as a boutique small car in China, serving the needs of a second car for families. In terms of price range, the main sales of the three brands are in the price range of over 300000, over 200000, and over 100000. The distinction is very clear, and the common feature is that they can all exchange batteries. In addition, Firefly's research and development progress has been very smooth, and it is designed and developed according to very high safety and quality standards, aiming to start delivery in the first half of next year
According to Li Bin, achieving monthly sales of 20000 to 30000 units for the Ledo brand can achieve a breakeven point. In addition, the Ledo brand will release its second product next year, a mid to large SUV.
At present, the global trend of intelligent electric development is still ongoing, and the market space is huge, which provides relatively mature conditions for the refined operation of brands. In theory, a rich brand matrix can generate different values and emotional communication, thereby entering more segmented markets and meeting the needs of more users.
NIO has publicly released the planning paths of three brands, which has attracted high attention in the industry. As a pioneer, it is bound to attract more car companies to follow up. And the multi brand strategy is also expected to help NIO win greater development opportunities.
Expanding the business landscape: NIO's global "wild vision"
In addition to its multi brand strategy, NIO's recent global development layout has once again received media attention, which is considered an important step for NIO to continue expanding its business landscape in the future.
According to media reports, NIO has recently made the latest round of organizational adjustments and personnel appointments to its global business, in order to continue improving its organizational structure for global business expansion. It is reported that NIO has established a first level department called "Global Business Development", responsible for expanding global business across multiple brands and regions. In addition, NIO has established multiple secondary departments, including the Business Development Department covering six major regions including the Middle East and North Africa, Asia, Latin America and Oceania, Western Europe, Southern Europe, Central Europe, Eastern Europe, and Northern Europe, as well as the Strategy and Planning Department and the Operations Support Center Department.
Compared to the previous adjustment of its global business in 2022, NIO has shifted its focus from Europe to a global focus in its overseas market, expanding into more regions. At the same time, the management of the European market is becoming more refined.
At present, NIO has a clear leading advantage in the high-end pure electric market in China. From January to April this year, NIO ranked at the top of the electric vehicle market in China, with an average transaction price of over 300000 yuan.
In terms of going abroad, NIO has chosen to work together on channels, products, and infrastructure, shifting the entire system's capabilities overseas. Domestic users can experience NIO House, battery swapping stations, user operations, APP user communities, etc., while overseas users can also experience the same services.
In 2021, NIO entered the Norwegian market as its first stop in Europe. In October 2022, NIO will fully enter the markets of four European countries including Sweden, Germany, the Netherlands, and Denmark. At present, six mass-produced models, including NIO ES8, ET7, EL7 (ES7 in the Chinese market), ET5, ET5T, and EL6 (ES6 in the Chinese market), have entered the European market, with over 40 battery swapping stations, over 40 charging stations, and access to over 500000 third-party charging stations. The "Power Journeys | Rhine Valley Line" electrification scenic line is connected between Rotterdam and Munich. Last month, NIO "NIO Center | Amsterdam" opened.
Ultimately, the fundamental reason why Chinese car companies can achieve "lane changing overtaking" in the global wave of electrification is due to their technological advantages, as global new generation car related technologies are often mastered by Chinese car companies. At the same time, the latest models of the new generation of electric vehicles are basically the first to be launched in China, which was particularly evident at the 2024 Beijing International Auto Show. In addition, car companies with industry-leading advantages in service and energy supplementation can gradually expand overseas by building and replicating their system capabilities, ensuring a more stable foundation.
Building a brand is not a one-time effort. It requires both external opportunities and a long-term approach to development. With the support of system capabilities, car companies must always maintain their reverence for the market. In this regard, NIO may continue to be the "leader" among car companies through its multi brand strategy.