Which car brand will become the next Nokia or BlackBerry?

Updated: May 24, 2021

boost blog #10


In 2007 Apple launched the iPhone. At the time the smartphone category didn’t really exist. BlackBerry insisted that business customers needed keyboards optimised for thumbs. Many believed they were right because BlackBerry was the business phone king. At the consumer end of the market, Nokia was the dominant brand. Nokia held 47% of the phone market.


Apple's expensive iPhone wasn't an overnight success, and BlackBerry's revenue grew for the next three years. In fact Apple's market share at the end of 2008 was just 1.4%.

I can't tell you what the automotive iPhone equivalent is, but it is probably (and only time will tell) the Tesla Model 3. In New Zealand Model 3 has been top of the medium car segment for several months. It is outselling Camry (the long time leader) and outsells BMW 3 and 4 Series, Audi A4 and A5, and Mercedes-Benz C-Class combined. The segment has been declining, because customers are favouring SUVs over sedans and so Telsa's performance is even more interesting. Remember, it is not just the segment leader by some margin, it is also the only electric car in the segment (Hyundai Ioniq and Kona are in the class below - and are convincingly outsold by Tesla there too). It is also only available in one body style (we dont have the Model Y here yet), illustrating that model complexity isn't always needed to win volume.


Overall the passenger car segment's mix or share of overall market is down 4.3% YTD and yet SUVs are up 4.0%. The total market is volatile because this time last year we went into lockdown, so although the market is up YTD 28%, looking at the mix is probably more reliable than looking at absolute sales volumes.


By 2020 BlackBerry had gone from revenues of over 19Bn USD to revenues of 1.04Bn – and they don’t make phones any more. Motorola used to have 47% of the global phone market. Now it has 3%.


Oppo is the largest smartphone maker in China and has around 8% market share globally and realme has about 4%. Here are two brands that are not household names in New Zealand (unless you have a teenager in the house who is comfortable not badgering you for an iPhone), yet they have a substantial foothold globally that has literally come from nowhere fast.


If you think that phones have nothing to do with BEV or PHEV (the collective noun is NEV or New Energy Vehicles), here is an interesting link. The world's second largest battery manufacturer, CATL is only 22 years old; they started making batteries for electronics and phones and now of course make batteries in China and Europe for NEVs. The third largest battery manufacturer, BYD is also Chinese; they make batteries for buses (where they are a global leader) and also for cars.


We have a plethora of emerging powerhouses coming from China, with a real focus on BEV and PHEV coming from a managed economy that has been single minded on jumping over the legacy manufacturers that it partnered with. This is great news for the environment, and for the price point of electric cars. It is very bad news for any Western European, Japanese or US based manufacturer that doesn't have an accelerated programme for electrification.


The centrally planned economy of China has given the nations car-makers a huge strategic nudge, the likes of which will be felt for decades. By having a clear policy of creating an automotive industry that is ready to take advantage of the NEV revolution.


Take a quick look at the highlights of Auto Shanghai - according to TechCruch here (the Shanghai autoshow). It is on now.


Seven of the top ten global EV brands are Chinese and you’ve probably never heard of them The following list is not based on volume, but are illustrative.

  • BYD is the company Tesla overtook to become the worlds biggest EV maker in 2020.

  • Nio is involved in Formula E. It is 6 years old. It is focussing on battery swaps and by March this year had completed 2,000,000 battery swaps.

  • Ora is a sub-brand – they make cool low cost BEVs, yet was only launched 2 years ago as part of GVM. At the other end of the scale is Wey, the luxury EV brand named after GWMs founder Jack Way.

  • Boajun (pron. BOW-JUN) is a sub-brand for GM in China that sits below Chevrolet.

  • Wuling is ancient by Chinese standards – it was founded in 1982. Its an SAIC GM joint venture. They build China's best selling BEV (which outsells the Model 3). They build ICE and BEV.

  • Aiways was founded in 2017 by China Volvo’s sales chief; their 400km range U5 model is available in Europe.

MG, a brand that is close to my heart, sells into Europe and 60% of its volume is NEV. That is the highest rate of electrification other than Tesla.


If 2030 is the cut-off date for the sale of piston engine cars in many European cities, then we have a market distortion unlike anything we have ever seen. Change and disruption is coming fast – and its coming not from Europe, Japan or the US, but from China.


When you think of car brands now – who do you think is going to be the next BlackBerry or Motorola?


 

Boost Auto is an automotive consultancy working in five main areas.

  1. Sales and Marketing effectiveness for brands and dealers

  2. Green fleet facilitation for large corporates

  3. Go To Market strategies for emerging brands

  4. Market Insights

  5. Business Planning and facilitation

You can contact us at hello@boostauto.co.nz









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