By Wang Gao

Manufactured by SAIC-GM-Wuling Automobile, the Wuling Hongguang Mini EV has been in the spotlight in recent years. With a price tag of only about $10,000 (USD), the Mini EV knocked Tesla’s Model 3 off the top of the sales charts in January of last year, making it the best-selling electrical car worldwide for the first time. Tiny cars are nothing new, however... So, how did the Wuling Hongguang Mini EV emerge to become the world’s top selling electric vehicle? Was it simply because of its low price, or is there more to the story?

Challenging norms through disruptive marketing

The Wuling Hongguang Mini EV debuted at the Chengdu Auto Show in July 2020 at a price ranging from 28,800 RMB to 38,800 RMB. With stylish colours and a low price, the tiny vehicle sold more than 15,000 units in the first 20 days after its launch. In January 2021, it became the best-selling EV globally, and recorded sales of over 270,000 units over the next 270 days.

In part, the EV’s stellar sales performance can be attributed to Wuling’s clear positioning and definitive judgment – the Hongguang Mini EV is designed for daily commuting. Therefore, it does not necessarily have to be equipped with a spacious interior, long battery life or extreme speed. The original Mini EV offers two range options of 120 km (75 miles) and 170 km (106 miles), which is more than enough for daily commuting, picking up kids, or doing the grocery shopping. In addition, its compact size also makes it easier to park in urban areas.

However, positioning itself as a convenient means of transport alone doesn’t explain the model’s explosive growth. Instead, disruptive marketing was the primary success factor. In order to bring down the price, Wuling took out some seemingly important components from the Mini EV that many competitors in the auto industry wouldn’t. For example, built-in air conditioners and airbags, which are now standard features on the car, were initially unavailable on its base model (28,800 RMB).

Being a trendsetter that prioritises emotional value

Besides challenging traditional industry practices through disruptive marketing, Wuling also added value to its products. In the auto world, product design is often more focused on vehicle performance, configuration, and parameters, while perceptual needs such as colour, appearance, and interest are less prioritised. In light of this, Wuling set a fashion trend by addressing customers’ emotional needs.

Wuling sought to reinvent itself before making its way to the mainstream fashion scene. Deputy General Manager of SAIC-GM-Wuling Automotive (SGMW) and CEIBS CMO Programme alum Xue Haitao revealed that the company was inspired to change when it realised that most of its customers were middle-aged and elderly people. Wuling believed that if it were to carve out a more promising future, it would need to diversify its product line, refresh its brand image to attract young customers and go global. Therefore, breaking into fashion seemed a logical choice.

Its transition to a fashionable auto brand started with the colour scheme. In order to design the Hongguang Mini EV, Wuling invited the world’s top colour experts in product design, and rolled out a number of funky pastel hues, including lemon yellow, avocado green, white peach pink, starry blue, starlight pink, and starlight gold. The Macaron version unveiled in 2021 was particularly popular among younger people. Although they didn’t introduce additional colours for cost reasons, the current options still remain eye-catching wherever they go.

Luring young consumers by creating differentiation

Unlike most players in the EV market who have followed Tesla’s example by mimicking the design of sports cars, using similar interior designs, and spending heavily on materials, Wuling has set itself on a completely different path with disruptive marketing strategies and by catering to the sensual needs of young people, (a major force in the Chinese consumer market). Statistics reveal that 72% of Hongguang Mini EV owners are under 30 years old and 30% are under 20 years old, while female customers account for nearly 70%.

When designing their newest car, Wuling targeted female users. Nine months after the debut of the standard Mini EV, Wuling added Macaron variant to its line-up, a customized model with three unique paint colours and additional standard features, including air conditioners, airbags and upgraded lights. To further attract young people, Wuling also signed two popular celebrities (Ren Min and Ma Boqian) as brand ambassadors and forged a number of crossover partnerships with fashion events. At the 2021 Shanghai Auto show, Wuling launched the convertible Hongguang Mini EV Cabrio, making it one of the top three most talked-about models at the event.

Another unique way Wuling differentiates itself from others is by co-creating fashion with its customers. It encourages designers to design decorations and offers plenty of choices for young demographics. Many young people see the Hongguang Mini EV as a fashion product. They put fun bumper stickers on their cars to make them more distinctive. Those who spend less than 50,000 RMB on a Mini EV Macaron might lavish more than 100,000 RMB to embellish their purchase. Today’s young people like interesting things, chase fashion trends, and value self-expression. This has presented opportunities for Wuling to thrive and prosper in the auto industry.

"Wuling makes what people need"

Much more than an automaker, Wuling is also a consumer brand that iterates constantly. It distinguishes itself from rivals by constantly adapting products to meet the ever-changing needs of consumers. That is why it can stand out from other mini cars, such as Smart and K-Car.

Wuling has taken the path less travelled. Large traditional automakers have R&D departments responsible for product design. However, a product which usually takes three to four years to come out can hardly be adapted to meet the needs of customers. Although Wuling does not outperform traditional auto brands in terms of R&D, it is more tailored to its consumers’ demands, and has a shorter product development cycle.

"Wuling makes what people need" is not just an empty slogan, since the company does excel in innovation and response to the market. For example, during the pandemic, Wuling used its production line to make masks. And, when the street vendor economy took off, Wuling introduced models ideal for setting up roadside booths. These events went viral on the internet with the help of KOLs (Key Opinion Leaders) and KOCs (Key Opinion Consumers).

Emotional value creation and social media communications have also contributed to the rapid rise of emerging Chinese brands today. Founded in 1985, Wuling is not technically a new star, but it has successfully transformed itself by keeping pace with the times. Before the launch of Hongguang Mini EV, Wuling was already popular with drivers and offered a wide range of affordable models, such as vans, trucks and commercial vehicles.

The future of brands is not just about developing hit products

Despite its strong growth, Wuling is still beset by several problems. First, although government subsidies for new energy vehicles (NEVs) have allowed Wuling to continue its low pricing strategy to capture market share, it will still need to raise the prices to rational levels in the future. After all, what matters to its target users when making purchase decisions is not necessarily its low price.

Second, emotional needs change unpredictably. To achieve long-term success, a brand cannot rely on one single product and expect it to last forever; in fact, it should continue to innovate and introduce new ones.

The media landscape is also evolving. It is hard to be sure that any social media platform that hits the market today will still be popular in the next five to ten years. By then, people may want to read books or newspapers or a new media type will be born. None of these is predictable.

For any well-established automaker like Wuling or even emerging auto brands that value consumers’ emotional needs, they need to pay particular attention to the following two points:

First, do not bet everything on developing hit products. Brands should evaluate the sustainability of their products or services, and constantly learn through trial and error if the products are unsustainable. A brand with a promising future should not think only about being a hit; instead, it should put its feet on the ground and run itself as a century-old business.

Second, be more far-sighted. Whatever the industry, brands must design their products with forethought, and think about their next moves. If you want to build an enduring brand with sustainable products, you will need to take prudent steps. You should never seek immediate returns at the expense of future growth. A firm market footing is always based on strong R&D capabilities, as well as superior product quality and functionality.

Wang Gao is a Professor of Marketing at CEIBS. For more on his teaching and research interests, please visit his faculty profile here.