neodymium cylinder magnets, China cylinder magnets supplier, industrial rod magnets, cylindrical rare earth magnets, custom-sized cylinder magnets IT-MAG Magnetic Material Co.,Ltd , https://www.it-magnets.com
"Xia Li produced 1 million cars in 18 years." This news, announced by Tianjin FAW a few days ago, has provided new examples of the unique history of the "old models and longevity" in China's automotive industry. Last year, Shanghai Volkswagen’s Santana achieved a cumulative production of 2 million vehicles over 20 years. People are becoming increasingly skeptical: Why do foreign car models with short life cycles remain on sale in China for more than 10 or even 20 years, far exceeding the typical product lifespan?
In contrast, new models that don’t generate profit are constantly being refreshed. Although the third generation of Xiali "N3" has been phased out, Tian Ming, General Manager of Tianjin FAW Xiali Co., Ltd., stated clearly in Tianjin that "Old Xiali will not stop production; new products will be developed alongside old ones until there is no market demand anymore." From the price difference of more than 20,000 yuan between N3 and the old Xiali, it's clear that the price space of the older model is carefully protected. Moreover, according to sales data from the first seven months of this year, Xiali remains the best-selling model in its class.
The same applies to Santana. After Shanghai Volkswagen reduced prices for two months, it regained the top sales position in July with 28,000 units sold, including 13,000 units of the 78,000-yuan Santana model. The question is, is it a virtue or a criticism that these cars stay on the market for so long? In contrast, many negative examples exist. For instance, the Carnival 1.3 was discontinued just two years after its launch. Old Buick and Accord models were replaced by new versions, and General Motors decided to stop selling the Chevrolet SUV and instead produce the GL8 in Shenyang. Recently, the new Blue Jays "Zhizun" was launched. Although Dongfeng Limited denied discontinuation of the old models, the fully redesigned new version has already taken over the market space of the old Bluebird, making the discontinuation only a matter of time.
From a common sense perspective, these cars haven't made enough profit yet. A key reason is the time lag: Santana and Xiali have been in production for nearly 20 years. During this period, they faced little competition and didn't need to worry about stopping production. Usually, the product maturity and recession periods involve high pressure in the market, reaching a peak quickly before fading as new competitors emerge. However, Santana has taken a different path, gradually maintaining its presence over time.
A Japanese company representative once said gloomily: “Santana cannot be sold in Germany but sells well in China, now even suppressing our products. It’s a big step.†The Carnival era preceded the West, followed by Vios, even the upper Excelle and Elantra are pushing down prices. The Carnival is now squeezing the limited production line at Chongqing factory, temporarily halting the unprofitable 1.3 model. Now, Changan Ford has sold over 20,000 cars per month since Q2, which is impressive. It seems like a bold move, but it's a realistic choice for companies to occupy the market early with new models.
It makes sense that today’s market competition is no longer favorable to older cars. So why do they persist? Santana’s situation is quite special. Shanghai Volkswagen invested heavily, and the Santana is currently the longest production line in China. When Toyota, Ford, and Nissan entered the Chinese market, they were either cautious or had limited investment (such as Ford during the fine-tuning of investment policy before and after China’s WTO accession). Their scale was usually around 20,000 to 30,000 units, making strategy adjustments easier. But for Shanghai Volkswagen, moving all Santana production to Jiangsu would be too costly. Although Shanghai has a large public finance, the losses since this year’s “Black May†have been significant, and it’s not worth trying to squeeze every last bit of profit.
Although both Santana and Xiali continue production, their situations differ. Tian Ming said: “This year, Xiali finally removed the ST label.†Xilin’s intention is that Xiali is performing well, but it still has serious issues, and its strength is far behind Shanghai Volkswagen. Therefore, for the old Xiali, which has been profitable for 18 years, the risk of stopping production is too great. On the other hand, the new N3 model is coming out, turning the profits from the old Xiali into a more luxurious configuration, allowing it to capture the compact car market. Compared to the old Xiali, it's higher in price, becoming a weapon to capture market share. Both old and new Xiali can make more money.
Longevity techniques seem to suggest that Santana continues because of constant improvements. In reality, the lifeline of the old car is maintained through superficial changes such as model updates and price reductions. In this unique Chinese approach, it supports workers, parts suppliers, dealers, second-hand car sellers, and even some criminal gangs involved in theft and disassembly. Santana’s accessories were among the first to benefit from economies of scale. With 21 years of continuous production, accessory costs have also dropped significantly. At the same time, many parts suppliers rely on Shanghai Volkswagen and Tianjin Xiali as early joint ventures to form a large scale and accept orders from other brands. Companies like Shanghai Yanfeng, UMC, and Tianjin Denki are grateful for the old models. If they disappear one day, the scale will immediately shrink, reducing the appeal for other vehicle brands.
With lower accessory prices, old Xiali and Santana still maintain several thousand dollars in profit, and relying on cheaper spare parts and a large market share, Shanghai Volkswagen’s dealers can earn enough maintenance profits. This is an advantage that new brands don’t enjoy. While fake accessories may be available in each city, distributors can still make profits at all levels, and the maintenance cost for old cars is generally around 100 yuan, while for cars like Vios, Palio, and Fit, it's usually 200 to 400 yuan. The gap in important components like engines and transmissions is even greater, prompting new customers to buy used cars. The steady increase in old car consumption keeps the accessory costs low, ensuring that distributors and parts suppliers can avoid thin profits and keep producing more cars.
The old car market is always a hot spot for interest, especially for cars like Santana that are easy to repair. Sellers can cover their costs, and buyers know it's cheap and easy to fix. Even replacing headlights costs just 40 yuan. Theft gangs have targeted Santana as well. On the list of stolen cars regularly announced by the Beijing Public Security Bureau, Santana is always on the list. Areas like Baoding and Langfang were once key sales regions, where small bosses could buy cars for over 20,000 yuan, and some cars could re-enter the used car market or even the rental market, allowing some people to continue making money.
With the profits from accessories and the benefits of gray-market used cars, the old car market has remained popular. However, the user base of old cars is mixed. On one hand, traditional middle-aged customers see Santana as the best official car, with enough power and image. On the other hand, new car brands with a production scale of less than 50,000 units are overcrowded, and no one will become a new Santana. Therefore, the prices of new cars and accessories cannot match those of old cars, and the largest user base of old cars cannot be shaken. This huge user base is unconscious, forming a "royalist group" supporting outdated products. As long as they add a power window and high-power air conditioning, they can steadily buy old cars.
"The technology we bring to China is the most advanced and the car is the latest generation." These popular slogans are increasingly attracting young users who think it's a sign of respect, but when they actually buy a car, Xiali and Santana can still attract a considerable number of young users because the cost of use is crucial for young families. What they see are old cars that have updated their appearance and interiors, while merchants are using hidden lifelines.
Predicted Production Suspension:
Santana B5 First off the assembly line: In April 1983, the reason for the suspension of production in the future was that 73,000 vehicles were sold in the first seven months of this year, still the highest in the country. However, this car has only produced more than 100,000 vehicles in Germany and is no longer produced in Brazil. The most important market in China is private family, but Poussin is mainly faced with the official car group. The increase in new products will cause Santana's market space to gradually disappear. From the perspective of product upgrading, Santana 3000, which is also class B, can replace part of the Poussin market, and Poussin will be replaced by a new model in the future. It may fade out of the historical stage by changing its name.
Accumulated Production: Nearly 2.1 Million Estimated Discontinued Time: Before 2008
Pratt Production Time: Summer 2001 Discontinued Cause: As the first generation product of Yueda Kia, Pratt was the best-selling model in the 1980s, but when the market is outdated today, the car's market segment, its opponent's appearance and technical content are higher than Pratt. After the introduction of Maxima, Ka Wah OPTIMA became a major product and developed to a high end. The suspension of production of this product is a general trend.
Guess the time of production suspension: Skylark production time in 2006: The reason for the discontinued production in the mid-1990s: In the first half of this year, only 130 vehicles will be produced and 178 vehicles will be sold. Mini-car production at this scale can basically be regarded as discontinued due to poor management and property rights. The result of the change is still unclear.
POLO03 production time at any time: In the spring of 2002, the production will be suspended in the future. The reason for this is that in the first seven months of this year, 21,000 vehicles were sold, and the average monthly sales volume was only 3,000. The new POLO04 with variants will soon be on the market. As the public is aware of the disadvantages of its small cars in the world, especially in China, it is making every effort to build a new A-class platform for the PQ35. New cars including the C1, the new POLO and the new golf will replace the old ones.
Bluebird No. 9 production time in 2006: Fengshen Automobile Co., Ltd. put into production in 2001 and made several changes later. The reason for the discontinued production in the future: The new Blue Jays (Bluebird) is equipped with e-navigation, Bluetooth car and other configurations, the power is stronger than the old models, the front face is even more turbulent, and it obviously puts pressure on the Excelle or even the Accord market. The key is its price did not leave too much room for the old money. When the old models were put into operation, they were slightly behind. In the first half of the year, 16,000 units were produced, and 1,500 were in stock. The results were average and the subdivision space was gradually getting smaller. Bluebird's market demand will definitely tend to be smart.
Ingle production time after 2004: In September 1999, the reason for the suspension of production in the future: As the fruits of the capital operation of Yuejin Group and Malaysia's Golden Lion Group, the old car platform in Spain was moved to China. This car is in short supply, and NAC's "manufacturing priority" of the traditional thinking, with the change in the awareness of the Nanjing Automobile market, Xinyatu and a number of new cars will start a new block of Inger's space will be completely blocked, move to production in Wuxi is likely to be just before the suspension of production retired step.
Zhang Huozhao Tiger: Guess when to stop production: 2006.