In recent years, the automotive market has undergone significant changes, characterized by fierce competition and a shifting landscapeSecond-tier luxury brands like Volvo, Cadillac, and Lexus, once regarded as symbols of prestige and quality, are now facing plummeting sales and decreasing market shareIn stark contrast, homegrown new energy brands such as Li Auto, Aito, and Xiaomi have emerged with remarkable product strength and market performance, disrupting the status quo and rewriting the rules of the gameWhat factors have contributed to the decline of second-tier luxury brands, and how have domestic new energy vehicles managed to seize the opportunity?

IThe Predicament of Second-Tier Luxury Brands: Misjudged Market Trends and Lost Advantages

The analysis of the difficulties faced by second-tier luxury brands reveals strategic miscalculations at their coreIn the past, they thrived on "quality premiums," generating substantial profitsHowever, with the advent of new energy and smart technology trends, their former advantages have diminished rapidly.

1. Slow Transformation

Currently, new energy and intelligent technology are the "hard currencies" of the automotive marketUnfortunately, second-tier luxury brands have been slow to respondTheir historical attachment to traditional fuel vehicles and the superficial allure of "luxury" has left them late to recognize the growing demand for new energy vehicles

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Although they have introduced electric versions, most still exhibit rudimentary electric capabilities and outdated automation technologies, failing to meet consumers' high expectations for smart technology.

2. Weak Product Offering

In contrast, domestic new energy vehicles continually innovate their smart technology configurations, providing consumers with fresh experiencesTake the Aito M7, for example, which features L2-level autopilot, 5G vehicle communication, and AR-HUD technology, experiencing instant popularity upon launchOn the other hand, second-tier luxury brand electric models suffer from outdated central control screens and obsolete operating systems, making them feel disconnected from contemporary technological advancesFor younger consumers, features such as smart driving and in-car entertainment systems are key considerations when purchasing a vehicle, placing traditional luxury brands at a disadvantage.

3. Imbalanced Cost Performance Ratio

Second-tier luxury brands have also stumbled due to their pricing strategiesPreviously, the "quality premium" drew attention, but today, domestic new energy vehicles are invading the market with stronger product capabilities and more accessible pricingIn the same price range, domestic cars offer richer configurations, longer range, and better performance, while luxury brands often provide only basic features, therefore exposing their cost performance disadvantages.

II

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The Rise of Domestic Brands: Leading with Intelligence and Taking the Lead

In stark contrast to the struggles of second-tier luxury brands, domestic new energy vehicles are surging, transitioning from a phase of "catching up" to "surpassing."

1. The Breakthrough in Intelligence

The intelligent performance of domestic new energy vehicles is nothing short of remarkableFor instance, the Aito M7 combines L2-level autopilot with the latest in-car entertainment systems and smart voice assistants, fully satisfying consumers' cravings for smart technologyBrands like Li Auto and Zeekr have also made significant strides in the field of intelligence, exploring cutting-edge autonomous driving, in-car connectivity, and smart voice upgrades to enhance the user experienceIn stark contrast, second-tier luxury brands have outdated technology systems in their electric vehicles, leading to a lack of consumer trust and decreasing market appeal.

2. Leading in Performance and Range

In terms of performance and range, domestic new energy vehicles also excelThe Li Auto L7 series showcases breakthroughs in both range and power that align with daily usage needsConversely, the electric vehicles of second-tier luxury brands often face problems of range anxiety and insufficient power, with acceleration and range trailing even behind regular electric vehicles

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The disparity is apparent.

3. Winning with Cost Performance

The ultra-high cost performance ratio is the strongest "weapon" for domestic vehiclesIn equivalent price segments, domestic cars outshine second-tier luxury brands in configuration, power, and range, with some areas where domestic vehicles have even surpassed their "luxury" competitorsFor example, Xiaomi's first electric SUV, priced affordably and featuring advanced intelligent configurations, quickly garnered attention upon its debut.

IIIThe Future of Second-Tier Brands: Striving for Transformation or Facing Elimination?

As domestic new energy vehicles rise, will second-tier luxury brands rise again?

First and foremost, the value of brand premiums and traditional advantages have diminished, as consumers shift their focus to performance, features, intelligence, and cost performanceIf second-tier luxury brands do not closely follow market changes and innovate, their market share will continue to be eroded.Also, they must invest heavily in the fields of intelligence and new energy, striving for breakthroughs and breaking the deadlock; otherwise, they may not escape the fate of elimination from the market and become mere historical footnotes.

IV

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