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At the 2023 Guangzhou Auto Show, Ideal Motors released its fourth model MEGA. MEAG is a full size pure electric MPV with a length of 5.3 meters, expected to sell for over 500000 yuan, and will begin mass production and delivery in February next year.
It is worth noting that MPVs are not a popular product category in China, including Wuling Hongguang, which is a tool car. In 2022, the overall market size of MPVs was only 943000 units, far lower than the tens of millions of sedan and SUV products. In the first three quarters of this year, the cumulative sales of MPVs in China were 814000 units, accounting for only 5.34% of the total sales of passenger cars. The MPV market with a price exceeding 500000 yuan is even more limited, with monthly sales of around 1600 units for both the Kiryu 009 and Toyota Elfa.
However, Liu Jie, Vice President of Ideal Automobile, stated that MEGA's goal is to become the top seller in the market with a sales revenue of over 500000 yuan, regardless of energy or vehicle form. Based on the calculation of BMW X5 and other products, MEGA's monthly sales target for 2024 is around 8000 vehicles, and the annual sales target is close to 100000 vehicles.
What is the ideal car foundation to challenge the main products of century old luxury brands such as BMW X5 with pure electric MPVs?
Liu Jie stated that MEGA did not overly focus on the characteristics of the MPV market when defining its products, but instead focused on analyzing market capacity, user characteristics, and user needs above 500000 yuan. The monthly sales volume in the domestic market of over 500000 yuan is around 60000 vehicles, mainly for household users.
We have noticed an interesting phenomenon that before Elfa entered the Chinese market, there were no MPV models priced around one million yuan in China. At that time, the main models sold in this market were BMW 7 Series, Mercedes S-Class, and Audi A8, as well as luxury mid to large SUVs such as BMW X5 and X7, Audi Q7, Mercedes GLE, and GLS. After Elfa entered the market, it created new demand, or rather new ones Segment the market Liu Jie said.
Liu Jie also stated that the penetration rate of new energy vehicles in the market with a price of over 200000 yuan has exceeded 35%, but the penetration rate of new energy vehicles in the market with a price of over 500000 yuan is only 11%. This also means that there are not enough good products in the market with a price of over 500000 yuan to encourage users to switch from fuel vehicles to new energy vehicles, and there are huge opportunities behind this phenomenon.
Unlike the mainstream MPVs currently on the market, MEGA has an exaggerated avant-garde design and is jokingly referred to as the "highway high-speed rail" on the internet. With a wheelbase of 3.3 meters and a body length of 5.35 meters, it creates a spacious third row space. Ideal Car has not disclosed any further details about the interior of the car, but according to leaked images on the internet, "color TV, refrigerator, and large sofa" will appear on MEGA.
Although the best-selling MPVs on the market are plug-in hybrid or HEV models, MEGA does not adopt extended range power technology solutions. MEGA product manager Li Xinyang stated that this is due to considerations such as drivability and wind resistance. The biggest feature of hybrid MPVs is that the engine or range extender are both horizontally mounted, which takes up wheel space and results in limited front wheel corners.
In order to overcome the problems of high power consumption and limited range of large-sized pure electric vehicles, MEGA has achieved a wind resistance coefficient of 0.215 and is equipped with the Ningde Times Kirin battery. One major highlight is the 5C charging function, which is officially claimed to be 12 minutes of charging and an increase in range of 500 kilometers. At the same time, Ideal Automobile is laying out a 5C charging station, with an expected completion of 300 seats by the end of the year.
In addition, Liu Jie reiterated his goal of pursuing a 20% gross profit margin for Ideal Cars. We believe that a 20% gross profit margin is an ideal and important business requirement. "Liu Jie said that in order for a company to become a high-end or luxury brand recognized by consumers, marketing packaging is useless. It must rely on long-term and solid R&D investment, and must reach a 20% gross profit margin to support and ensure long-term and sustained R&D investment.
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