The offensive and defensive approach of the FAW Toyota RAV4 Rongfang

Release Date : 2023-06-25
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Throughout the car market, compact SUVs have always been the market segment with the largest market share. The data from the Association of Passenger Associations shows that from January to May this year, sales of compact SUVs reached 1,856,000 units, accounting for 24.3% of the market. At the same time, this segment is also the focus of the layout of the various car companies, Haval H6, Changan CS75PLUS, Toyota RAV4 Rongfang, Honda CR-V and other such models, are the top pillar of the brands, bearing the weight of sales and profitability.
But because of this, competition in this market segment is also extremely fierce. For many years, those at the top of the sales charts have had to be wary of challenges from rivals and could be pushed off the "pedestal" or even eliminated from the market if they are not careful. This is not only a test of the car companies' accurate grasp of changing consumer demand, but also a test of their true car-making skills.
Now with the rapid penetration of electrification and intelligence, the best-selling compact SUVs that once reigned supreme are once again facing new challenges. Models such as the BYD Song PLUS and the AION Y are quietly reversing the competitive landscape in this segment, and the rise of Chinese brands is also having a significant impact on joint venture car companies.

In the latest SUV sales charts, it is clear to see that there are fewer and fewer joint ventures among the top 10 SUVs. However, there are two models that remain in the top 10: the Toyota RAV4 and the Honda CR-V, which have been in the Chinese market for more than ten years and have survived the changes in the Chinese car market, but have maintained their product power.
  However, the impact of electrification and intelligence is still ongoing. The price wars that have been waged since this year have rolled the market beyond recognition. How can we break the ice in this environment? Perhaps we can get some answers from the new RAV4 RongFang, which has just been launched recently.

Facing two major challenges at the same time
In this situation, the competition in the compact SUV market has undoubtedly become more intense and brutal, properly "hard" physical combat. For traditional compact SUVs such as the RAV4, this battle needs to face two challenges at the same time.
  On the one hand is the rapid penetration of new energy vehicles. Xu Changming, deputy director of the National Information Center, has spoken on several occasions in public about the relationship between electric cars and fuel cars. He believes that electric cars have a relative advantage over fuel cars, not an absolute advantage. Some people like electric cars and some people like oil cars. So oil cars and trams are in competition, not a replacement relationship.
  In the past two years, we can also see that many new energy car companies have shouted the slogan of "the same price for oil and electricity", wanting to erode the market share of fuel cars by virtue of lower cost of use and good car experience.
In May this year, the domestic retail penetration rate of new energy vehicles climbed to 33.3%, a 6.7 percentage point increase from the 26.6% penetration rate in the same month last year. The penetration rate of compact cars, although not as high as that of minivans, small cars and medium-sized cars, has also exceeded 20%.
  On the other hand, there is pressure from the industry's "inward roll", especially in the compact SUV segment, which is the largest. Consumer demand is comprehensive and meticulous, rigorous and pragmatic. At the same time, in the stock market, the demand for additional and replacement vehicles has increased significantly, and consumers have become more mature in their understanding of cars. Without real product power, it is indeed difficult to stand out among the many players.
  This year's "price wars" have exerted this pressure to the extreme. The reductions of tens of thousands or hundreds of thousands of dollars at every turn have left people staggered. This has caused many car company bigwigs to lament that a new round of elimination has begun.
At the same time, many industry insiders also said that the era of joint venture car companies "lying to win" is coming to an end. With the rise of Chinese brands, joint ventures are no longer the object of catching up and looking up to. In May 2023, the domestic retail share of Chinese brands reached 50.3%, an increase of 4 percentage points year-on-year, and the cumulative share from January to May also reached 50.0%, an increase of 3.5 percentage points compared to the same period in 2022.

Reinforcing value for money with one hand and differentiation with the other
      Faced with this situation, the overall strategy adopted by FAW Toyota RAV4 Rongfang can be broadly summarized as "one guard" and "one attack". The defensive strategy is the original product competitiveness, while the offensive is the new trend of electrification and intelligence.
  In order to continue to improve its product power, the RAV4 has been significantly adjusted in terms of configuration after the facelift, with the power seats, panoramic sunroof and other configurations that are in high demand by consumers being devolved.

Firstly, the large centre screen has been upgraded to a 10.25-inch multimedia display system across the range. Secondly, there are changes to each configuration: 2.0L Style, Style Plus, 4WD Expedition and 4WD Expedition Plus have new passenger power seats and wireless mobile phone charging; 2.5L Smart Electric Hybrid Elite, 2.5L Smart Electric Hybrid Elite Plus and 2.5L Smart Electric Hybrid Elite Plus 4WD have new passenger power seats.
  The 2.0L Style Plus, 2.0L 4WD Adventure Plus and 2.5L Smart Electric Hybrid Twin Engine are all upgraded with a 12.3-inch full LCD instrument cluster; the 2.5L Smart Electric Hybrid Twin Engine Elite Plus and 2.5L Smart Electric Hybrid Twin Engine Elite Plus 4WD models have a new panoramic sunroof, roof racks and projector headlights.
  There is also a new BSM parallel blind spot check system, RCTA reverse front and rear blind spot warning system and kick-sensing power tailgate for the 2.0L 4WD Adventure Signature; and a new BSM parallel blind spot monitoring system, RCTA reverse side and rear blind spot warning system, HUD head-up display system and nanoe X nano water ion air purification system for the 2.5L Intelligent Electric Hybrid Twin Engine Signature 4WD.
Overall it's the same Toyota style as always, not too much in terms of equipment, just enough. The product power has been significantly improved without much change in price.
  In addition to this, the RAV4 RWD also offers a wide range of personalisation options. As an urban and off-road SUV, the 4WD Adventure, 4WD Adventure Plus and 4WD Adventure Signature models introduce the North American Adventure off-road package for the first time. The interior of the 4WD Adventure Plus and 4WD Adventure Signature also features a dual colour blocking design with large areas of suede and leather materials to accentuate the off-road style.
  In fact, from the 2022 model year onwards, the RAV4 has been intentionally accentuating its off-road styling with the addition of an off-road appearance package to the 2.0L 4WD model and a tougher overall visual appearance. The introduction of the North American Adventure off-road package arguably further enhances this attribute.
In today's automotive consumer market, youthfulness and personalisation have become mainstream, and RAV4 Rongfang has accurately grasped the changes in current consumer demand, consolidating its own product power with one hand and diversifying its line-up with the other, which is really some old-fashioned.
Embracing electrification and intelligence
   The defensive position is steady and stable, and the offensive position is also step by step.
  A notable change to the RAV4 RongFang in this facelift is the reduction of pure fuel models and the increase in the distribution of hybrid models. The Premium version of the original 2.0L petrol model has been dropped, while the 2.5L Intelligent Electric Hybrid Twin Engine Hybrid model has an Elite Plus version added to the range. Under WLTC conditions, the 2.5L Smart Electric Hybrid Twin Engine 2WD model can drive 1000 km continuously on one tank of fuel.
It is clear that the aim of this move is to move closer to electrification. Many in the industry believe that hybrids, as a technological improvement solution to fuel vehicles, will quickly take over their market share.
  According to the Energy Conservation and New Energy Vehicle Technology Roadmap 2.0 plan released by the Chinese Society of Automotive Engineering, hybrid passenger car sales are expected to be 10.75 million units by 2025, with a compound annual growth rate of 74.7% from 2021 to 2025. By 2035, all conventional energy-powered passenger cars will be replaced with hybrid models, and annual sales of energy-efficient vehicles and new energy vehicles will each account for half of the total.
  In the short term, however, fuel cars will remain the main consumer of the market. At a forum in Chongqing this month, Li Xueyong, deputy general manager of Chery Automobile Co Ltd, general manager of Chery Automobile Marketing Company and general manager of Jetway Automobile, said that "fuel determines survival, hybrid determines life and death, and tram determines the future". And FAW Toyota's strategy is to move steadily closer, just reducing the fuel-only options rather than eliminating them all together.
Of course, while embracing electrification, intelligence has also become an important selling point for the new RAV4 Wing, something that was previously unimaginable. T-Pilot (intelligent driver assistance system), Toyota Space (intelligent cockpit) and Toyota Connect (intelligent connectivity) are standard across the range.
  The first RAV4 to be equipped with the Toyota Space Intelligent Cockpit supports wireless mobile phone connectivity, OTA upgrades, and independent updates to the car's APP. The system is also fully integrated into the Ali and Tencent entertainment ecosystems, with functions such as book listening, music listening and Karaoke.
  In addition, the voice interaction function has also been further enhanced, supporting 30 seconds of continuous dialogue and recognising multiple commands without repeated wake-up calls. It not only enables continuous calls without any obstacle, but also recognises dialects and enables control of functions such as air conditioning, windows, sunroof and instruments.

Conclusion: As the world's best-selling SUV, the RAV4 has been tested by the market for a long time and is a benchmark in the industry, both in terms of product quality and user reputation. Although the wave of electrification and intelligence is unstoppable, the essence of car making remains the same, which is to try to meet the needs of users.
  If you look closely at the changes to the new RAV4, you can see that FAW Toyota has put a lot of thought into it, especially the configuration adjustments, each upgrade is practical enough and still has some appeal in this price range.

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