Geely Automobile Strategic Management New Thinking

If it had not been for official business, Li Shufu would not have been absent from the dealer conference held in Chengdu in February 16th.

However, Li Shufu sent a video to the conference: "success or failure is in the middle of a thought, the overall situation determines the pattern, the pattern determines the layout, and the layout determines the ending."

This year's Congress came to more than 1500 people, more than any previous one.

More specifically, there are also "big players" in the western and secondary markets such as Hunan Everbright and Chengdu Ping Tong.

The next day, Li Shufu arrived in Chengdu.

At the meeting, Li Shufu once again drew the attention of dealers that the Chinese car market is undergoing unprecedented changes.

The change took place on the second day.

In February 18th, Geely's main rival in the two or three tier market, BYD, fired the first shot in the annual price war.

BYD announces that its cars will all depreciate except for new models such as F3DM and M6 and L3, and some cars will even depreciate by 15 thousand yuan.

At the same time, most of the joint venture car brands are under the influence of Beijing's blocking up, and they are launching the national layout strategy densely. Such as Shanghai Volkswagen, Guangzhou Automobile TOYOTA, Beijing modern and so on have announced plans to increase 4S stores this year.

Among them, especially the modern ambition of Beijing, the company reclassified the sales area from the 3 level management of the original 7 large areas to 4 level management of 9 large areas, thereby increasing the number of its own outlets to 720.

The purpose of a joint venture brand is only to narrow the radius of the two or three tier market and strive for deeper channels.

Li Shufu and his team need to come up with a better solution when the price war of the local brand and the joint venture brand channel change.

No price war.

Since the release of the "Ningbo declaration" by Li Shufu at the dealer conference in Ningbo in 2007, Geely has been trying to bid farewell to the strategy of winning the low price, and has pformed into four major goals, namely, technology leadership, quality leadership, customer satisfaction and overall leading.

Geely, director of public relations, Yang Xueliang presented a Geely.

This year's abrupt market situation made Geely unanticipated.

The first battle that Geely faced was price war.

"We will not respond to price wars," said Liu Jinliang, vice president of Geely and sales company. "On the contrary, Geely will also raise prices."

About 60% of the sales of Geely will come from the two or three tier market. Will the Geely replay the declining trend in the 2007 when prices are raised? In those days, Geely, after the "Ningbo declaration", raised the price of vehicles to 20% to 30%, and the monthly sales volume dropped from more than 30 thousand to 6 thousand, and let BYD and Chery take advantage of the situation to achieve the opposite trend.

"The situation is quite different now. Our advantage now is quality win."

Yang Xueliang said.

Geely does not have a price war.

After the "Ningbo declaration", Li Shufu spent 3 years adjusting the Geely product line: first, it was to stop the old cars, and switch to the "new three" vision, Jin Gang and liberty ship. The second is the implementation of the "multi brand strategy" to rebrand and locate Geely's brands and models. The three major brands, such as the global hawk, the imperial and the British, were born, and the new terminal VI system was introduced. Once again, Geely built 5 major technology platforms and 15 major product platforms, thus producing 42 products.

At the dealer conference, Li Shufu once again made clear: "Geely's rivals are TOYOTA, Honda, general motors, Volkswagen, Ford and Hyundai."

The implication is that local brands are not in the competition.

The technology matching of some Geely products has even exceeded the joint venture brand.

In our two or three line market, the past strategy of winning at a low price is no longer our competitive weapon. "

According to Liu Jinliang, Geely's next stage is to fight hard with the joint venture brand.

However, under the influence of "blocking Beijing" and other factors, the joint venture car market was sent to Geely in advance.

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Thousand shops thousand county plan

Channel battle is another battle between cars and enterprises. The competition is the breadth and depth of channels.

Yang Xueliang acknowledged that, in competition with the joint venture brand, Geely's soft rib is the lack of brand strength, but in the channel competition, Geely will not stick to it.

Geely has its own plan for the battle channel. Geely has formulated the "thousand shops thousand county plan" and the dealer subsidy system.

In the office of Liu Jinliang in Hangzhou headquarters, a huge marketing strategy master plan is hung on the wall.

According to the three major brands, each brand division is an independent sales company. The general manager of the Department is concurrently appointed by the deputy general manager of Jili Sales Co., Ltd., with its exclusive planning department, activity department, channel management department and other functional departments.

In addition, Geely's existing models and future models are separately divided into corresponding business units and will be sold by brand.

"The three brands will conduct investment according to different brand positioning and image, and comb out the original dealers. The three brand departments should carry the capacity of 200 thousand to 400 thousand cars per year, and create a new marketing pattern of annual sales of millions of cars."

Liu Jinliang pointed out: "for example, the imperial brand, we require the establishment of a new 4S store. There are very high specifications in store location, construction standards, capital staffing and service providers, all of which should be matched to foreign and joint venture brand 4S stores."

At present, Geely has completed the basic defense in the two or three line market with the total number of distributors over 800 and the advantages of nearly 1000 service networks.

In addition, Geely this year stretched the channel line, and developed the market to the county and township level.

Liu Jinliang called the "thousand store thousand county plan" as "three to the countryside", that is, the channel goes to the countryside, the product goes to the countryside and the service goes to the countryside.

He said: "1000 outlets in the country are encouraged to encourage the existing 4S stores to establish more than two direct stores in the county level administrative area, thus forming a" mini 4S store "across the country's county-level market.

Geely will focus on the rural market, choose the comfort of its interior space, fuel consumption, car body size, economic price and safety protection coefficient, and durability of products, which is more suitable for the actual situation of farmers and rural areas. It also implements the mobile service station, and forms technical services such as claims, maintenance technicians, electrical technicians, etc.

Unified image service vehicles, uniform clothing, unified materials, to the relatively centralized users of counties, townships and towns to carry out on-site inspection and maintenance services.

The rural subsidy is a convoy for Geely's "thousand shops and thousand county plan".

Geely is subsidizing distributors who have opened more than 2 Direct stores, such as opening 3 Direct stores, subsidizing 100 yuan for each car, opening 4 stores, and subsidizing 200 yuan for each car.

And so on.

How did the strategy fall to the field? The name of Shangqiu auto trade in Henan, Li Shufu was identified as a case worthy of promotion.

As a Geely 4 level market in Shangqiu, Henan, Geely has entered in 1999, but in the next 10 years, Geely has a very low market share in the region.

Taking free ship, vision and panda three models as an example, the market share in 2009 was only 9.7%, 4.6% and 0.5% respectively.

Under the auspicious "thousand store thousand county plan" and the dealer subsidy system strategy promotion, the local name reaches the automobile trade to start the strength, these three models in last year's local market share soared to 24.5%, 13.8%, 4.6% respectively.

Geely's brand distribution network has changed the management structure of dealers.

Mingda automobile trade company has carried out a division similar to Geely headquarters, such as the market department is compiled by 10 people, each person is responsible for the development and management of a county level market.

And introduce the Geely VI standard in the new global hawk 4S store.

In the "thousand shops thousand county plan", Mingda auto trade quickly established 9 two level outlets and 32 township level "mini 4S shops" in three months.

The promotion of this expansion is service marketing. In specific ways, such as the introduction of a special reward fund, a reward of 500 yuan should be given; key leaders such as village cadres and media personnel should be maintained; a bicycle club should be set up; the wall advertisement will be further developed in the township market and cooperate with the 119 fire public service posting notices.

In response to the current sinks of joint venture brands, Geely and Mingda automobile and trade jointly proposed a new channel bottom finding plan.

In 7 counties of Shangqiu, there are 4 three level outlets in 12 towns and townships on average, and 336 sites have been completed.

Geely's plan is to promote its coverage by more than 90% of the 253 prefecture level cities in the country through the name Tatsu auto trade mode. In terms of channel breadth and depth, it will build a shield barrier against the competition of the joint venture brand.

What Li Shufu did not expect was that his competitors' mistakes in channel management accelerated the pace of the Geely layout plan.

Hunan's largest auto dealer, Everbright, abandoned Geely's direct competitor and even invested nearly 100 million yuan to open 6 Geely brand 4S stores in Changsha, Zhuzhou and Xiangtan.

In addition, Everbright also brought Geely to 14 prefecture level cities and 32 two level outlets.

"When we sink the channel, we pay more attention to the interests of dealers."

Liu Jinliang did not want to hide the advantages of Geely's dealer system.

"Geely is based on the annual production volume to allocate the annual sales volume of the dealer. According to the market situation, a certain proportion adjustment is made in the middle of the year. The distributor is allocated monthly to the month according to the quantity of the manufacturer's annual task and the market situation. Under normal circumstances, the dealer will not bring too much pressure and excessive inventory to the dealers.

In addition, Geely's return point is not cumulative, and a single month can not finish the task, which will not affect the return point of other months and quarters.

Another factor for Everbright's choice of Geely is Geely's layout in the country.

Geely not only has a manufacturing base in Xiangtan where Everbright is stationed, but also expands its troops in Western markets like Lanzhou and Chengdu, which coincide with the intention of Everbright to enter the western region.

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Western strategy

Why did we enter the western region? Li Shufu simply said, "respond to the call of the national strategy for the development of the western region."

But as a merger and acquisition company of Volvo, Geely's intention to enter the western region is obviously not simple.

Last year, when everyone focused on Li Shufu's acquisition of Volvo, he overlooked one detail.

On the L L5 of the year, the people's Government of Lanzhou city of Gansu signed an investment plan with Geely.

The plan determines that the production capacity of the Geely Lanzhou production base will be expanded from 50 thousand original capacity to 120 thousand vehicles, and the New Global Hawks and imperial heroes will be added. At the same time, 20 to 30 major parts and components supporting enterprises will be introduced and nurturing. By 2012, Lanzhou Geely Automobile base will be set up as the largest automobile industrial base in the northwest region, which integrates vehicle manufacturing, parts matching and automobile engineering research, and has a revenue of over 10 billion.

Please pay attention to three details: the project is Geely and local governments join hands, upgrade their capacity in the west, and introduce the auto industry chain to the local area.

This will allow Geely to compete against all car companies on the Gansu market and occupy the right time, place, and people.

Gansu is just a part of Li Shufu's strategic deployment in the west, Li Shufu's territory, and the southwest front with Chengdu as its core.

Sichuan and even the western car market has always been the key regional market of Geely Automobile strategic layout. In 2007, Geely invested 1 billion 350 million yuan to build a vehicle production platform with SUV as the main body and economic cars and pickup trucks as auxiliary vehicles in Longquanyi District of Chengdu.

In the next 5 years, the post project will also include a total investment of 3 billion yuan, including parts production base, headquarters economic project (including Geely sales center, Geely R & D center).

In addition, Geely's first production base in Chengdu will be in the layout of Chengdu.

In addition, Geely and Chengdu's local strength car dealers west goods company cooperate to create the first mode of cooperation between manufacturers and distributors - the first nationwide manufacturer to cooperate with 4S shop Auto supermarket.

This year, Geely again invested $100 million in westbound company, and built the first national brand experience hall in Chengdu to build the most luxurious super five star service station in the country.

"We are foolish birds to fly first, ready to win."

Li Shufu spoke with a gentle voice.

But no one thinks Geely is a stupid bird.

This year's dealer conference, Li Shufu has said that the annual growth of 18%, the target of 490 thousand vehicles, it seems that in 2015, Li Shufu said that the goal of achieving 2 million vehicles is still a small distance.

But what will happen if Geely stores all 42 cars to the market?