2023理想汽车市场洞察报告-2023-05-新势力

HowtoBetterTakeOnLiAuto

InsightsonLiAutoUsers(2023)

YicheResearchInstitute

Authors

LijunZhou

Director/ChiefAnalyst

YingGao

IndustryAnalyst

BenyaShi

IndustryAnalyst

16

14

12

10

8

6

4

2

0

TherapidriseofLiAutoin2019-2022andlabelssuchasnannydaddy,6-seaterandEREVhavebeenmuchtalkedaboutintheindustryandemulatedbymany

From2019to2022,LiAuto’sannualend-usersalesinChinaskyrocketedfrom0tonearly140,000units.

Thoughthat’slowerthanLiAuto’sownexpectations,theimpactontheindustrywasneverthelesssignificant,

especiallyonthehigh-endsegment.InQ42022,notonlywasLiAutooneoftheleadersinthemidtolargeSUV

segment,butitalsodominatedthelargeSUVsegment.LiAutoislikeanewbeastthathastamedtraditionalbeastsinthehigh-endsegmentlikeMercedes,BMWandAudi;

UnlikeEVbrandssuchasTesla,XpengandNIO,LiAutohassucceededviaagrassrootsstylefocusedon

philosophiessuchasEREV,6-seaterandnannydaddytargetcustomersthatareoftenneglectedbycompetitors.ThankstothistacticLiAutohasbecomeanewdarkhorseinthehigh-endsegmentachievingrelativelygood

revenuesandmargins;

Rightnow,goinghigh-endisacorestrategyatmanycarmakers.BecauseLiAuto’shigh-endstrategyhas

beenrelativelywellexecuted,isuniquetoChinaandeffectivelyloweredthethresholdinchallengingtraditional

high-endbrands,manycompetitorshavestudied,emulatedandevenchallengedLiAutoatitsowngame.

From2021to2022,manycarmakersthatYRIhastalkedwithoftenspeakoftheLiAutomodelwithgreatinterestandenthusiasm.

LiAutoEnd-UserSales2019-2022(10,000units)

2019202020212022

Q42022MidtoLargeSUVEnd-User

SalesbyModel(10,000units)

BMWX5 LiL8/ONETeramont/X

AITOM7

NIOES7

1.82

1.54

1.33

1.16

2.29

Q42022LargeSUVEnd-User

SalesbyModel(10,000units)

LiL9

MercedesGLS

BMWX7

MaybachGLS

LexusLX

0.47

0.19

0.09

0.06

2.89

DenzaD9

XpengG9

ZEEKR009

Dreamer

ManyCompetitorsareImitatingLiAuto

AITOM7

Lanshan

LiL8/L9

TochallengeLiAuto,youmustfirstunderstandLiAuto.In2022,LiAutousersweremostlymarriedmiddle-agedmenwithkids

YRIresearchshowsthatin2022,94.39%ofLiAutobuyersweremarried,91.15%hadkids,72.64%weremiddle-agedand81.42%weremale.Clearly,theso-called“greasymen”portrayingtheLiAutouserbasecreatesa

delightfulcontrastwithLiXiang,thegracefulfounder,chairmanandCEOofLiAuto;

WhyisthisbuyerbaseditchingAudi,MercedesandBMWandinsteadbuyingLiAutos?Wasitacoincidenceoristhatbecomingatrend?WasitbecauseLiAutoattachedgreatimportancetothistargetcustomergrouporwasit

becauseAudi,MercedesandBMWdidnottakethemseriously?Thoughthego-youngstrategyofAudi,MercedesandBMWhasbeeneffectiveoverrecentyearswithaverageuserageallfallingbelow40,whichuserbaseismorevaluable,middle-agedbuyersoryouthbuyers?

Inconversationswithcarmakersoverthelastfewyears,YRIhasalwaysemphasizedtheimportanceofmiddle-agedbuyersandthattheyshouldaddressthisimportantsegment.Yetasoftheendof2022,mostcarmakersstillfocusedonthestrategytogoyoung.Eitherwewerewrong,orwedidn’tputinenoughefforts.NowthatLiAutohassucceededwithprimarilya“greasymen”userbase,weatYRIfeellikewehavebeenvindicated.Atleastwehaveanothercasetodissect.

2022LiAuto

BuyersbyMarital

Status

Single

5.61%

Married

94.39%

2022LiAuto

BuyersbyFamily

Status

Kids

8.85%

HaveKids

91.15%

2022LiAuto

BuyersbyAge

Group

Elderly4.54%

Youth22.82%

Middle-Aged

72.64%

2022LiAuto

Buyersby

Gender

Female

18.58%

Male

81.42%

Source:YRI

Youthbuyersareyoungerthan35yearsold,

middle-agedbuyersare35-54yearsoldandelderlybuyersare55yearsandolder

In2022,LiAutousersweremostlyAvantGardemiddle-agedmenwhoworkedinseniormanagementinhighvalue-addedindustriesliketheinternet/IT

YRIresearchshowsthatpeoplewhoworkedintheinternet,ITandcommunicationsindustriescontributedthemosttoLiAutoend-usersalesin2022,at21.24%,faraheadofthosethatworkedinotherindustries.Intermsofoccupation,thosethatworkedincorporatemanagementcontributedthemosttosalesin2022,at20.35%,followedbypurchasing&salesat15.7%andR&D&programmingat9.91%;

Whetherit’shighvalue-addedinternetusersorqualitycorporatemanagementusers,theyareallkeycustomersofAudi,MercedesandBMW.Theirchangingbuyingtasteshouldbereflectedfirstthroughoptimizationoflocally-

producedmodelsofAudi,MercedesandBMW,whichshouldhavebeenthefirsttolaunchmodelscateredtonannydaddies.Yetasoftheendof2022,overhalfofAudi,MercedesandBMWsalesinChinastillcomefromfemale

buyers.Thesethreetraditionalhigh-endgiantsareoverlydependentonfemalebuyers;

Theinternetindustryembracescreativethinkingandchallengingspirit,corporatemanagementusuallyhavematerialconditionsformoreexperientialconsumption.TheseofferLiAutoachancetotrydifferentthingsandaskhigher

expectationsofthosethattrytoimitate.CarmakersshouldnotbeboundintheirthinkingbytheLiAutomodel.

Besidesthenannydaddyopportunity,theyshouldalsoproactivelythinkaboutotheropportunitiesforqualitymiddle-agedmalebuyers.HowmanyofthesuccessfulentrepreneurslikeLiXiangarereallynannydaddies?Aretheir

businessusecasesbeingsatisfied?Ifnot,willbrandslikeDenza,VOYAH,AITO,WEY,IM,AVATRandARCFOXbeabletoproduceabusinessvehicleforsuccessfulentrepreneurLiXiang?

Top10JobIndustriesofLiAutoBuyersin2022

0%5%10%15%20%

Internet,IT,Communications

Manufacturing

Culture,Sports&Entertainment

Finance

Eduction,ScienceResearch

Mining

Medical&Health

Wholesale&Retail

Party&Gov'tOffices,PublicInstitution,IndustryAssociation

Construction,RealEstate

Top10OccupationsofLiAutoBuyersin2022

0%5%10%15%20%

CorporateManagement

Purchasing,Sales

R&D,Programming,Technician

Worker

PrivateEntrepreneur

Consulting,Analysis,Planning&Advisory

Doctor,Nurse

Teacher,ScienceResearch

PublicServant

MediaProfessional

Source:YRI

25%

25%

BlueCollar7.08%

In2022，LiAutousersweretypicalmiddle-agedmalehighnetworthindividualsandintellectualswithadvanceddegreesandhighincome

YRIresearchdatashowsthatLiAutobuyersarehighlyeducated.In2022,thosewithgraduatedegreesaccountedfor29.63%ofsaleswithundergraduatesaccountingfor43.98%ofsales;intermsofhouseholdincome,wealthy

andmiddle-classbuyers,at66.37%and26.55%respectively,accountedformostofsales;

Overthelastdecadeorso,manymiddle-agedmenwithadvanceddegreesandhighincomeboughtcars,and

manyofthembecameownersofAudi,MercedesandBMW,helpingtosolidify“BBA”brandvalues.From2019

to2022,LiAutogrewrapidly,andAudi,MercedesandBMWfeditlotsofusers.Manyexistingqualityownersof

BBAwillcontinuetotradeuptootherbrandsincludingLiAuto,whichwilldiluteBBA’sbrandvalues.Istherapid

riseofthelocally-producedBMWX5in2022intothetopspotinthemidtolargeSUVsegmentaneffectivemeasuretoretainexistingBBAqualityusersandfendoffcompetitorslikeLiAuto?BesidesmidtolargeSUVs,whatother

countermeasuresdoBBAhave?

Astheirqualityuserscontinuetospurnthemandswitchtootheremergingbrands,Audi,MercedesandBMWnot

onlyhavetoworryaboutsalesbutalsobrandvalue.Theformerisshort-termpain,whilethelatterislong-termpain.

2022LiAutoBuyerbyEducationLevel2022LiAutoBuyerbyHouseholdIncome

Graduates

(Masters/Doctorate)

29.63%

MiddleSchool&Below0.88%

HighSchool/Vocational/Technical

5.77%

Universities

Undergraduates43.98%

&Colleges

19.73%

Wealthy

26.55%

MiddleClass

66.37%

Source:YRI

Source:YRI

Bluecollarhouseholdincome<RMB150K,

middle-classhouseholdincomeRMB150K-500K,wealthyhouseholdincome>RMB500K

Married

Children

High

Education

Level

HighIncome

Middle-Aged

LiAuto’strueuserprofileperfectlyillustratesthecompany’sstrategyoffocusingonnannydaddiesandfamiliestotakeonBBA,anduser-

productintegrationcontinuestostrengthen

ThepreviousthreeslidesbasicallyshowthatLiAutousersareprimarilyqualitymiddle-agedmen,whichfits

perfectlywithLiAuto’sstrategicthinking:theevolutionoftheirtargetuserbasefromnannydaddiestofamiliescenteredonattractingmiddle-agedmen;byappealingtoownersofAudi,MercedesandBMW,LiAutoisreallyattractingqualityusers,whicharebasicallyqualitymiddle-agedmen;

TheLiONEperfectlymatchedwhoLiAutotargetedandwhoboughtit,helpingthecompanylockinqualitymiddle-agedmalebuyers.Inthesecondhalfof2022,LiAutofurtherdiversifieditslineupwiththeL8andL9withfeaturesthatmetuserneeds.Lookingbackatpastcases,YRIhasdiscoveredthatmanycarmakersexpandedrapidlyafterproductsbecamesuccessesratherthancontinuingtofinetunethem;

Thecoreresponsibilityofacarmakeristosellgoodcarstotherightcustomersnomatterthestrategy.EnsuringamatchbetweentargetcustomersandactualcustomersshouldbeofNo.1concern.Foraspecificmodel,ifthe

strategy,R&D,productandsales&marketingdepartmentshavedifferentuserprofiles,thenit’slikelythatnooneknowswhotherighttargetcustomersareandeventhevehicleitselfmaynotbewellmade.Thisiscommon

occurrenceinChina’scarmarket;

LiAuto’sstrategythinkingisonestickingtoablueprintalltheway,nomatterhowunitsandpersonnelchange.

Youeitheradapttoorimprovethisblueprintorleave.EverythingfromstrategytoR&Dtoproducttomanufacturingtosales&marketingandtoservicemustbeexecutedaccordingtotheblueprint.Strategicplanningatmany

carmakersinChinachangesaspeoplecomeandgo,evenachangeinbrandingexecutivecouldleadtoahugechangeinstrategicplanning,letaloneachangeinCEO.Although,strategicplanningatmanycarmakersare

guessworkinthefirstplace,sotheymightaswellchangeeverythingwithanotherguesswork.

LiAutoTarget&ActualUserFitSchematic

Senior

Management

MarriedChildren

Middle-AgedMen

(Nanny

Daddy/Family)

Male

Middle

-Aged

Quality

Middle-Aged

Men

Male

High

Education

Level

HighIncome

Quality

User

ChallengeABB)

Internet

Senior

Management

Internet

2019Q3

2019Q4

2020Q1

2020Q2

2020Q3

2020Q4

2021Q1

2021Q2

2021Q3

2021Q4

2022Q1

2022Q2

2022Q3

2022Q4

market,attractingownersofBBA,

60000

40000

20000

0

LiAutoCoreModelQuarterlyEnd-UserSales2019-2022(units)

Phase2(Q32022-Present)

Phase1(Q32019-Q22022)Target:launchL8andL9to

Target:focusonnannydaddy,strengthenfamilypositioning,

tlyestablisheditselfarequality

intheRMB300K+segmentandmiddle-agedmalebuyers,

disruptedthemidtolargeSUVsalestakeoffagain

VWandToyotawhoworkinsenior

managementatinternetand

relatedcompanies,andwho

areprimarilyqualitymiddle-agedmen

LiL9

LiL8

LiONE

LiAuto’starget&actualusersmatchperfectly.Itmayhavelookedeasybutit’snot.MismatchismorecommonplaceinChina

Ensuringamatchbetweentheirtargetcustomersandactualcustomersusedtobethebasicresponsibilitiesof

carmakers.Butoverthelastcoupleofdecadesorso,therapidgrowthofChina’scarmarketmeantthatanythingcouldsellevenwithoutproperuserplanning:aslongassomeformof“benchmarking”wasdone.Thishas

resultedinalotofmismatchesinwhatcustomerscarmakerstargetedvs.whatcustomersendupbuyingtheir

cars:vehiclesthatweretargetedathigh-incomeuserswereinsteadboughtbybluecollarworkers,andandEVsthatweretargetedatyoungGenZsinsteadwenttoolderGenYfemales…

TheWEYbrandfromGreatWallMotor,forexample,hadaverycleartargetcustomergroupinitsfirstyearonthemarket:mainstreamcustomersthatboughtRMB150K-250Kjointventurebrands.Itactuallydidprettywell.The

competitivelypricedVV7withadifferentiatedsportscoupestyleandqualitylevelattractedmanywould-beCR-V

andRAV4customers;asthemarketcooleddownentering2018,competitionintheRMB150K-250Ksegment

becamecutthroatasVWimplementeditsSUVoffensive.WEYatthispointintimeshouldhavebeensolidifyingitseffortstoattractpotentialmainstreamjointventurebrandcustomers,butinsteadintroduceduncompetitivelypricedNEVsandlowerpositionedICEproductsthatfacedmorecutthroatcompetition.NotonlydiditsNEVsflop,WEY

alsohadtocutpricesandendedupcompetingwithlowerpositionedHavalforentrylevelcustomers,resultingin

ahugetargetandactualcustomermismatch.StartinginQ32021,WEYbegananewroundofupgradingfocusedonNEVsandhigh-endpositioningbenchmarkingagainstLiAutototrytoattracthigh-endusers,ratherthan

mainstreamJVbrandusersthatithadtargetedinitsearlydays.WithNEVproductslackingpricingcompetitivenessandincreasingcutthroatcompetition,WEYcouldnotattractitsnewtargetcustomersandsalesslidrapidlyasa

result;

Overthepast4-5years,China’smarkethascooled,soensuringtargetandactualcustomerfithasbecome

eversoimportant,otherwiseitwouldbeamessifstrategy,R&D,productplanning,andsales&marketing

departmentsallplayedbydifferentrules.Asofearly2023,LiAutowasthebestexampleofgettingthattarget

andactualcustomermatchright.It’smuchhardertoaccomplishthanitlooks,andit’sworthalessonformanycarmakers.RatherthanthinkingaboutattractingnannydaddycustomersofLiAuto,theyshouldbethinking

moreaboutsatisfyingandattractingtheirowntargetcustomers.

CarmakerTarget&ActualUserFitSchematic

AB

Match

TargetActualTargetActual

UserUserUserUser

Mismatch

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

2020Q1

2020Q2

2020Q3

2020Q4

2021Q1

2021Q2

2021Q3

2021Q4

2022Q1

2022Q2

2022Q3

2022Q4

WEYCoreModelQuarterlyEnd-UserSales2017-2022(units)

Phase1(Q22017-Q12018)

Target:Gohigh-endtoattractmainstreamusers

Reality:attractedmanyownersofmainstreamJVproductssuchasCR-VandRAV4

Phase2(Q22018-Q22021)

Target:tryNEVs,moremainstreamdesigntoattractmoremainstreamusersActual:NEVsflopped,coolingoverallmarket

forcedpricedeteriorationandcannibalizationwithHavalH6,

moreentryusersflockedtothebrand

60000

40000

20000

0

Phase3(Q32021-Q42022)

Target:full-onICEupgrade,

cesf,ies

Reality:salesfalloffcliff,

fuzzyuserpositioning

MochaPHEV

Mocha

LattePHEV

Latte

MachiatoPHEV

Machiato

WEYP8PHEV

WEYVV7PHEV

WEYVV7GTPHEV

WEYVV7GT

WEYVV7

WEYVV6

WEYVV5

ThreekeysuccessfactorsbehindLiAuto’sperfecttarget/actualuserfit:deepinsight,strongexecutionandtimelycorrection

Throughouranalysisofbothsuccessesandfailures,YRIhasconcludedthateffectivetarget/actualuserfitreallydependsonthreefactors:insight,executionandcorrection:insightincludesawarenessofpotentialnewcustomersegments,suchastheriseofthesmalltownyouthmarketover10yearsago.Butasofearly2023,thesmalltown

youthsegmenthascontractedsignificantlyandshouldnolongerbeafocusofcarmakers;executionincludes

perfectdisplayofproductfunctionsandprecisionofsales&marketingcommunications,suchasfocusingonofferingoneortwoattractiveblockbusterfeaturesratherthanofferingeverythingtoaddresssmalltownyouthbuyerswho

don’thavethebuyingpowerbutseekuniquepersonalizedfeatures,whileexpandingsales&marketingdowntolowertiercities;correctionincludescapabilitytorapidlydiscoverissuesandeffectivelyoptimizethem,forexample10yearsagosmalltownyouthswerebuyingbecausetheyweregettingmarried,butnowtheyarenolongerinahurrytogetmarriedasaverageageatfirstmarriagewascloseto30yearsoldasof2022.Iftheybeginworkingat20yearsold,they’llremainsingleformanyyears.Duringthistimethey’llmorethanlikelydesirethingssuchasexteriordesignandpowerratherthanrearseatspace;;

LiAuto’sperfecttarget/actualuserfitreflectstheabovephilosophy:LiAuto‘sfocusonqualitymiddle-agedmalebuyers,essentiallybigcitymiddle-agedmalebuyers,reflectstheevolutionofthecoreuserbaseoverthepast

decade:smalltownyouthsmigratedtolargecitiesinlargescaleandmostofthemhavegottenmucholderand

becamebigcitymiddle-agedmen,whowillcontinuetodrivethemarketinthecomingdecade.Astoexecution

andcorrection,thishasoftenbeenreflectedthroughLiAuto’sofficialcommunicationschannelsaswellasLi

Xiang’sownwords,oneperfectexampleofwhichisthat”LiXianghimselfisLiAuto’sbiggestproductmanager;

TheykeytoLiAutohavingdeepinsight,strongexecutionandtimelycorrectioncapabilitiesisLiXianghimselfhavingastrongwillandcapabilitytolearn,superbinnovativeawarenessandrelentlesspursuitofselfcriticism.Heisverydetailoriented,doesn’tlikebeingpamperedandpraised,doesn’thaveanysecretariesmaleorfemale,andoftenseengoingaroundwithabackpackonhisown.It’sraretoseethistypeofleadershipstyleinChina’scarmarketespeciallyamongleadersofstate-ownedautomakers;

Attheendoftheday,thebattleamongcarmakersisabattleamongtheirCEOs.TherapidriseofLiAutoledbyLiXiangpresentsmorechallengesforCEOsofcompetitorsinhowtheycanempowerinsight,executionand

correctioncapabilitiesfortheircompanies.InorderforWEYtochallengeLiAuto,GreatWallMotorChairmanWeiJianjunmustfirstthinkabouthowGreatWallMotor’sinsight,executionandcorrectioncapabilitiescansurpassthoseofLiAuto,ratherthanworryingaboutvisiblefactorssuchaswhethertolaunchEREVs,addressnanny

daddiesorcomeoutwithmodelswithsixseats.PriortoLiAuto’srise,GreatWallMotorhadgreatcapabilitiesintermsofinsight,executionandcorrection.TheriseofLiAutoinfactreflectsGreatWallMotor’sthinking.

Insight

Actual

User

Correction

TargetUser

Execution

Source:LiAuto

LiAuto’sperfecttarget/actualuserfitalsodependedonstickingtomainuserbase(nannydaddy/middle-agedmen)

WhetherOEMstrategyshouldfocusonuserssuchasyouthormiddle-agedbuyersorproductssuchasBEVsorautonomousdrivingisatopicofgreatdebate.Ontheonehand,usersandproductsareconstantlychanging,ontheother,neitherusersorproductsalonemakeorbreakacompany;becauseYRIisnottechnologyfocusedandlackdeepinsightsintoevolutionofvarioustechnologies,wemainlyfocusonuserevolutionandhavecreatedourownuniqueanalyticmodel.Weareauser-centricresearchinstitution;

Inourconversationsanddiscussionswithcarmakers,YRIoftenemphasizetheimportanceofcreatingacorporatestrategicmechanismcenteredonusers;whenanalyzingLiAuto,weliketothinkthefocusonmiddle-ageduserssuchasnannydaddiesandfamiliesisitscorestrategicpath,andbasedonthisroute,howbesttoextractpotentialoftechnologiessuchasEREV,BEVandassisteddriving;

MainUserBase

GenderAgeIncomeOther

MainUserBase

Male

Female

Youth

Middle

Elderly

BlueCollar

Middle

Wealthy

OEMStrategicThinkingSchematic

MainProductLine

Other

FuelType

ICEHEVPHEVEREV

IntelligentDriving

BEVFCEVL1L2L3L4L5

-Ag

ed

-Cla

ss

Insight

ActualUser

Target

User

Execution

Correction

2014

2015

2016

2017

2018

2019

2020

2021

2022

Beingpreparediswinninghalfthebattle.In2020-2022,theriseofmiddle-agedbuyersespeciallybigcitymiddle-agedmalebuyerspropelledLiAutosales

Soyouarebettingonnannydaddiesandhavecomeupwiththerelevantproducts,butgettingtosuccessisnotaboutemulatingwhatothershavedone,it‘salsoaboutexternalmarketconditions;

Inrecentyears,middle-agedbuyerssuchasnannydaddiesandfamilieshaveincreasinglycontributedto

passengervehiclesalesinChina,accountingforover40%ofthemarketin2020andincreasingtomorethan50%in2022.Thegrowthofbigcitymiddle-agedmalebuyers,whichoverlapsLiAuto’squalitymiddle-agedmentargetcustomergroup,wasevenmoreclear,withsalesrisingto2.5-3millionunitsfrom2021to2022.

Thereasonissimple:peoplewhoboughtvehiclesin2015-2017,thelastroundofmajorsalesgush,nowareonthemarketlookingtotradeuporbuyadditionalvehicles.Audi,MercedesandBMWhadbeencomplacentbecausetheycouldcountontheseownersupgradetotheirvehicles.OnlyLiAutohadtheforesighttoprepareaccordinglyandhasbecomethefirsttoreapbenefits;

Ifyouprepareaccordinglyandridetheindustrywave,youmightnotonlygofrom0to1butmaybeeven0to10.Withoutsupportofexternalfactors,youcanprepareallyouwantbutyoumightnotgetanywhere.Sofar,we

haven’tseenanyentrepreneursaytheirsuccessifpurelydrivenbyexternalfactors.ThereisanoldChinesesaying:manproposes,Goddisposes.

ShareofYouth/Middle-

Aged/ElderlyBuyersinChina’s

PVMarket2014-2022

SalesAttributedtoandShare

ofBigCityMiddle-AgedMaleBuyers

2014-2022(10,000units)

100%

80%

60%

40%

20%

0%

ElderlyMiddle-AgedYouth

300

250

200

150

100

50

0

2014

2015

2016

2017

2018

2019

2020

2021

2022

15%

10%

5%

0%

End-UserSalesShare

Source:YRI

Youthbuyersareyoungerthan35yearsold,

middle-agedbuyersare35-54yearsoldandelderlybuyersare55yearsandolder

MainUserBase

16

14

12

10

8

6

4

2

0

LiAutoEnd-UserSalesin

China2019-2022(10,000units)

2019202020212022

Insight

Target

User

Actual

User

Correction

Execution

ExternalmarketconditionshavebenefitedbrandsotherthanLiAutosuchasToyota,BYDandTANK

BecauseLiAutohasaveryclearanddistinctivetargetuserbase,manyseeitastheprimarybeneficiaryinthismiddle-agedbuyingwave.Butit’scertainlynottheonlybrandthathasbenefited;

In2022,middle-agedbuyersaccountedformorethan60%ofmodelsliketheBMWX5,SiennaandDenzaD9,andmostoftheseweremiddle-agedmen.Thesemodelshaveperformedwelloverthepastyearthankstothiswave:inearly2023,thelocally-producedBMWX5hadalreadysurpassedtheLiL8insales,butLiAutowillfightbackwithadditionoftheL7;theDenzaD9dominatedbytheDM-iPHEVvariantisrampingupnicelyandis

expectedtosurpass10,000unitsinmonthlysalesinearly2023,offeringagreatopportunityforLiAutotoproveitsmettleintheelectricMPVsegment.

2014

2015

2016

2017

2018

2019

2020

2021

2022

BMWX5

Sieena

TANK500

DenzaD9

Tang

202201

202202

202203

202204

202205

202206

202207

202208

202209

202210

202211

202212

202301

202302

100%

80%

60%

40%

20%

0%

ShareofYouth/Middle-

Aged/ElderlyBuyersinChina’s

PVMarket2014-2022

ShareofBuyersbyAge

GroupofSelectModelsCateredto

Middle-AgedMaleBuyers2022

100%

80%

60%

40%

20%

0%

Elderly

Middle-Aged

Youth

Elderly

Middle-Age

Youth

Source:YRI

Youthbuyersareyoungerthan35yearsold,middle-agedbuyersare35-54yearsoldandelderlybuyersare55yearsandolder;

Bigcitymiddle-agedmalebuyersarethosefromfirsttier,newfirsttierandsecondtiercitiesaged35-54

MonthlyEnd-UserSalesofSelectModels

CateredtoMiddle-AgedMaleBuyers2022-February2023(10,000units)

2.5

2

1.5

1

0.5

0

LiONE/L8/L9

BMWX5

Sienna+Granvia

TANK500

DenzaD9

Tang

2014

2018

2022

2026E

2014

2016

2018

2020

2022E

2024E

2026E

2014

2016

2018

2020

2022

2024E

2026E

160

140

120

100

80

60

40

20

0

160

140

120

100

80

60

40

20

0

In2023-2026,themiddle-agedbuyeropportunityinChina’scar

marketwilldiversifyfurtherintosub-segmentsincludingpublicservant,businessandsinglericholdermalebuyers

In2022,middle-agedbuyersaccountedformorethan50%ofpassengervehiclesalesforthefirsttimeever.

From2023to2026,asthepost-85sgenerationentermiddle-ageandstarttotradeuptheirvehicles,thatsharecouldrisetonearly60%;

From2023to2026,asthemiddle-agedbuyersegmentfurtherexpands,itwillfurtherenrichitsinternalstructure:thenextgenerationofsinglericholdermenrepresentedbyemployeesworkingatinternet/ITcompaniesthatarebecomingmoresinglewillbegintotradeuporbuyadditionalvehicles,ignitingthisnewsubsegmentthatmayevenbecomethenewestforceinthemiddle-agedbuyermarket.IfinthenextfewyearsLiAutocontinuestofocusonfamilymiddle-agedmalebuyers,itwillmissthisnewopportunitycomposedofqualityusers;thepublicservant

vehiclemarketprimarilydrivenbymiddle-agedmalebuyerswillcontinuetogrow,theydesiremorelow-keyandmeaningfulbrands……

From2023to2026,theexpansionanddiversificationofthemiddle-agedbuyersegmentwillcreateevenbettergrowthopportunitiesforLiAuto.Butofcourse,thisopportunityisnotlimitedtoLiAutoonly.

ShareofYouth/Middle-Aged/ElderlyBuyersinChina’sPVMarket2014-2026

100%80%60%40%20%

0%

Elderly

Middle-Aged

Youth

Source:YRI

Youthbuyersareyoungerthan35yearsold,middle-agedbuyersare

35-54yearsoldandelderlybuyersare55yearsandolder;

Singlericholdermalebuyersarecomposedofsinglemen35yearsorolderwithannualhouseholdincomeofRMB200Kandabove

SalesofPublicServant

Vehicles2014-2026(10,000units)

End-UserSalesofSingleRichOlderMaleBuyers2014-2026(10,000units)

Business（GL8）

Stylish（ModelY）

Quality

（LiL8/9）

Mainstream（Tang/TiguanL）

PublicServant

（VolvoS90）

Passion（Prado）

Middle-Aged

Men

Opportunity

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