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“Game of Throne” for Luxury Compact SUVs

From:Internet Info Agency 2019-04-22 17:45:26

Automobile industry hot topic Q&A (Ep. 201)

Author: He Lun, IIA Co-Chief Content Officer, Deputy Head of IIA Academy of Auto

At the Shanghai Auto Show, the new Audi Q3 was launched, opening up a new round of luxury compact SUV battle. The launching of the Volvo XC 40 will also have a subtle impact on this market segment. There are lots of expectations for the future.

Q: The new Audi Q3 starts at 271,800 yuan, slightly lower than the BMW X1 (276,800 yuan), but slightly higher than the Mercedes-Benz GLA (264,800 yuan). What do you think about this pricing?

A: Referring to the German market, the BMW X1 starts at 32,350 euros, the Mercedes-Benz GLA starts at 32,430 euros, and the new Audi Q3 starts at 33,700 euros, slightly higher than the two rivals. In this way, the pricing of the new Q3 in China is relatively low. I think it is mainly because the brand power of Audi in China is not as strong as that in Germany, which is different from what many people think. It seems that Audi's brand power in China still needs to be improved.

Q: How do you think the competitiveness of the new Audi Q3 is?

A: I have always believed that although the three German auto giants have their own characteristics, the comprehensive product competitiveness is similar. In general, the latest models in the same class will perform better, and the new Q3 is no exception. After comparing the configuration of the new Q3 with its main opponent, you will find that its configuration is higher.

I think the biggest improvement in the competitiveness of the new Q3 comes from the lengthening of the car body. This seems very tacky, but it’s the choice of Chinese consumers. For example, the BMW X1’s replacement version: the extended BMW X1 was launched 3 years ago. And it beat Q3 in the second year. Now, the new Audi Q3 is coming back with the lengthened version. It is going to take the throne back.

Q: What do you expect from the “game of throne”?

A: It's hard to say. At the time, the luxury compact SUV was a brand new market segment. BMW was the first to open the market and didn't want to be too risky. Therefore, the X1 was built on the old 3 series platform, which was a bit lazy. And Q3 was born on the new platform, Audi has worked hard for it. As a result, sales of Q3 have been ahead of X1 in China for four consecutive years and Q3 ranked the first for 3 years in the global market segment. The new Q3 has the advantage of new car effect and its configuration is relatively high. The outcome of the battle between the two sides may depend on their respective brand power and marketing strategies.

Q: It is said that a new generation of Mercedes-Benz GLA will also be available during the year. Will it become a strong contender for the Thorne of luxury compact SUV?

A: It is very possible. The current positioning of GLA is relatively ambiguous, neither as a standard SUV nor as a coupe SUV, nor as a crossover. A bit nondescript, so its sales have been worse than the two major rivals. Now, the trial period of the luxury compact SUV market has been over, and all automakers should be able to find the right way. Basically, it’s for sure that there may be the extended version of the GLA.

Q: What impact do you think the Chinese-made Volvo XC 40 released at the auto show will have on this market segment?

A: The competitiveness of the XC 40 is still very good. Its design and configuration have their own characteristics. The pre-sale price announced now is starting at 265,000 yuan, and it is estimated that the official listing price will be lower. As a second-tier luxury brand, the main rival of the XC 40 is the Cadillac XT4. The XT4 has been on the market for more than half a year, and the monthly sales have reached 5,000 units or so, which is quite close to the German rivals. The XT4 starts at 259,700 yuan, but the entry-level model has a power of 177 kW, which is a lot higher than that of its German rivals and of Volvo XC40. And there are more discounts on the terminal retail of XT4. Therefore, if XC 40 wants to catch up with XT4, there are not many other methods besides the price. Brand promotion is a long-term project that will not work immediately. Of course, it is also important to control the sales rhythm and the supply & demand relationship.

In this segment, there are Jaguar E-PACE, Acura CDX, DS 6 and DS 7, which have a monthly sales volume of less than a thousand units, which has little impact on the market.

Q: The new-generation of Range Rover EVOQUE is also unveiled at the auto show. It is expected to be launched in 2019. What impact will it have on the luxury compact SUV market?

A: Range Rover EVOQUE is a special category in the market of compact SUVs. Its positioning is higher than “luxury” and is unique in this class, unless Porsche also introduces a compact SUV. So its starting price should be higher than the BBA's same-class model. The problem is that the positioning of EVOQUE made-in-China was not clear when it was first listed. It did not distinguish the relationship between Land Rover's Range Rover series and Discovery series, and the problems of their respective competitors have not been sorted out clearly. And with a high starting price and no low-power engine (minimum 147kW, 200hp), its market performance has been pretty bad.

The design of the new generation EVOQUE is almost perfect, but there is still no low-power engine of about 110 kW. It can't be expected to be in line with the BBA's competitors and change the competitive landscape. Of course, if one day Land Rover launches a compact SUV of the Discovery series, more and more people will be able to purchase the cheapest Land Rover.

Editor:He Lun