Despite having Chang'an's technological and resource support, Deep Blue continues to suffer frequent setbacks.

Today, Deep Blue Automobiles has entered an awkward moment.

Sales pressure, flawed market positioning, and being trapped in a price war—CEO Deng Chenghao still cannot find solutions to these three major challenges.

In terms of product layout, Deep Blue's product line is not singular, covering SUVs, sedans, and off-road vehicles in three submarkets. Its power forms also include pure electric and extended-range routes, which can be considered well-prepared.

However, in the current hottest market layout, Deep Blue sits on the sidelines, with only the two initial models S07 and SL03 holding the scene. The newly launched S05, L07, and G318 have not been able to gain market recognition.

Moreover, unlike new forces that stumble at the start, Deep Blue is not fighting a battle without preparation or support. Backed by the Chang'an Group with Chang'an's technological and resource support, Deep Blue still suffers frequent setbacks.

What is the problem?

Deep Blue 318, the Most Disappointed Off-Road Vehicle

Let's start with a set of data.

Sales figures from the past year show that S07 and SL03 are still the pillars of Deep Blue sales, accounting for 49.62% and 28.46% respectively, adding up to 78.08% of total sales. The sales of the three new models S05, L07, and G318 launched by Deep Blue account for less than 30% combined.

The biggest problem is that G318, which targets the high-end market, only accounts for 4.71% of sales. For Deep Blue, if G318 does not sell well, then profitability is out of the question.

In 2024, the Chinese market saw an endless stream of tough off-road SUVs, with nearly 40 models and fierce competition. In this market, brands like Tank, F-Brand, and JETOUR are all trying to find their own survival paths through different technologies and positioning.

The off-road market, highlighted by multiple new models, is growing. Deep Blue also wants a piece of the pie. Therefore, in June last year, Deep Blue entered the off-road market with the aggressive posture of the Deep Blue G318.

Right from the start, Deep Blue G318 was well-prepared, attempting to make a big splash in the off-road vehicle market. At that time, with strong momentum of over 3,000 orders per hour and 14,126 orders within five days of its launch, it brought some shock to the market and rivals, showing a trend to knock down brands like Tank.

Deep Blue has high hopes for G318. Deng Chenghao said at the press conference, "Go to volume upon launch," which, together with the order volume, is a good achievement.

However, the G318, which was initially held in high hopes, quickly became the most disappointed model in the off-road market in 2024. The total sales volume for the entire year 2024 was less than 9,000 units. Except for more than 2,000 units sold in the month of launch due to order volume, sales in the remaining months hovered around 1,000 units.

Deep Blue G318 failed to stand out among competitors but revealed a severe problem due to poor sales: "The market's acceptance of G318 is insufficient." The word "insufficient" is already being used quite politely.

So, what is the problem? Why is there such a big gap between pre-orders and actual sales?

Deng Chenghao said publicly that the team has found some reasons. "Mismatch between production capacity configuration and user demand is one of the reasons why sales did not meet expectations."

Mismatch?

It refers to the fact that the Deep Blue team originally expected the two-wheel-drive air suspension version and the four-wheel-drive comfort version to be more popular, but the actual situation was that 80% of users chose the four-wheel-drive air suspension version.

This explanation exposes a very serious problem. An important model with high expectations failed to grasp market demand. Deng Chenghao's decision can be said to be the main responsibility. To put it bluntly, the Deep Blue team did not know what off-road market users really liked.

This led to a serious consequence: the version that users wanted had insufficient production capacity and a higher price. The main push model was out of touch with the market, so consumers who measured the market with their feet could only look elsewhere, directly leading to the failure of Deep Blue G318.

However, this explanation is not convincing. Because the problems exposed by Deep Blue G318 are not just this one, but also deviations in product positioning and pricing.

At the initial stage of launch, the price range of Deep Blue G318 was 175,900-318,000 yuan, aiming to compete with models like JETOUR Shanhai T2 and F-Brand 5. Moreover, Deng Chenghao once said that Deep Blue G318 combines the passability of F-Brand 5 and the comfort of Li Xiang L7, aiming to "have the best of both worlds" by occupying both F-Brand 5's and Li Xiang L7's markets.

With the ambition to have it all, the Deep Blue G318, known as the "New Tech Tough SUV," has a blurred positioning. The design concept of Deep Blue G318 is to try to break the traditional off-road vehicle boxy shape by introducing sci-fi elements, finding a balance between tradition and the future. As a result, its appearance was ridiculed by the market as a "four-unlike."

In addition, in terms of choosing competitive targets and market pricing, Deep Blue G318 was slow to react. The original plan was to compete directly with F-Brand 5, and the original market price was still competitive. However, F-Brand 5 "broke the rules" by suddenly officially reducing its price by 50,000 yuan at the end of July last year.

This move caught Deep Blue off guard, causing Deep Blue G318 to lose a powerful benchmark and its market competitiveness to weaken rapidly.

In addition to price, the main reason for the weakened competitiveness is that Deep Blue G318 lacks core product competitiveness. Although it has configurations such as a central continuously variable differential lock and a magnetic mechanical differential lock, its "have it all" positioning dooms Deep Blue G318 not to be "the first choice" in the off-road market.

To put it bluntly, it lacks technology and brand soul. Because the core off-road configurations such as chassis tuning and four-wheel drive systems do not reach professional standards, users complain that it is a "pseudo-tough" SUV.

Of course, Deep Blue wanted to make adjustments and did make some adjustments.

To clear inventory, G318 started a price reduction promotion in February this year. At the same time, to establish a leading label for intelligent driving in the automotive market below 200,000 yuan, Deep Blue launched three intelligent driving solutions, entering the 3.0 push era, but it did not include the G318 model.

These two actions made Deep Blue G318 users feel a strong sense of betrayal. A Deep Blue G318 owner said that Deng Chenghao once stated on social media that there would be no price reduction. "He broke his promise." Currently, on the Heimao Complaint Platform, hundreds of car owners have initiated collective complaints.

There have been many complaints about the intelligent driving solution of Deep Blue G318. Some car owners revealed that the salesperson clearly stated that G318 was equipped with Qualcomm's 8155 chip when purchasing the vehicle, but the actual chip used was the lower-performance MediaTek MTK8675.

As a result, the infotainment system update issues of Deep Blue G318 emerged endlessly. Among the many reasons for complaints, the more common ones were frequent color screen and blue screen issues, which affected the driving experience and posed hidden dangers to road safety.

Under multiple problems, Deep Blue G318 suffered a setback. The failure of G318 is not singular but also reflects the brand positioning of Deep Blue, which is in a period of confusion.

30,000-unit Profitability Line

"Chang'an Automobile has put forward two requirements for the development of Deep Blue in 2025: one is to achieve a positive profit cycle, and the other is to achieve industry leadership."

Profitability has always been Deep Blue's goal. "Monthly sales exceeding 30,000 units can achieve profitability!" In 2024, Deng Chenghao repeatedly emphasized this break-even point, that is, when monthly sales reach 30,000 units, profitability is expected to be achieved.

However, profitability is difficult, a problem encountered by all new brands. Last year, Deep Blue Automobiles' highest monthly sales volume reached 36,000 units, still far from profitability. Although Deep Blue stated that it had achieved "profitability for several consecutive months," last year's financial report showed that Deep Blue lost 1.572 billion yuan. Its cumulative losses in the six and a half years since its establishment exceeded 11.5 billion yuan.

In terms of sales volume, Deep Blue Automobiles' sales volume is not bad. However, in setting sales targets, Deep Blue is a bit "unrealistic," resulting in the sales target taking a nosedive.

"In 2025, Deep Blue will sell 1 million or even 2 million vehicles annually and become a world-class electric vehicle brand!" At the beginning of 2023, Deng Chenghao's sales target for Deep Blue surprised the industry. At that time, the industry ridiculed, "Who gave them the courage? Definitely not Leong Ching Gok."

Under these grandiose words, Deep Blue completed sales of 134,800 vehicles in 2023, less than 70% of the original target of 200,000 vehicles. In 2024, Deep Blue's annual sales target was set at 280,000 units, and it finally delivered a total of 240,000 units.

After failing to meet the target for two consecutive years, Deep Blue once again set a surprising sales target. "In 2025, we will challenge the annual target of 500,000 vehicles, including 400,000 in China and 100,000 overseas." What does 500,000 vehicles mean? It means that Deep Blue needs to achieve 108% growth.

At this point, no one at Deep Blue mentions Deng Chenghao's statement in 2023 of "selling 1 million or even 2 million vehicles annually." However, achieving 500,000 vehicles is not an easy task for Deep Blue.

As we all know, Deep Blue currently has five models in its lineup, including the two initial models S07 and SL03 and the newly launched models S05, L07, and G318. Currently, the two models still hold the scene, accounting for more than 70% of total sales.

This is also because for a long time, extended-range technology has been Deep Blue's core technological advantage. The first model, SL03, achieved good market results with its "half-price Li Xiang" strategy.

However, as competition in the extended-range market becomes increasingly fierce, Deep Blue also wants to explore new tracks. Previously, Deep Blue tried to turn the situation around with the new model S07 but delayed delivery due to insufficient battery capacity, eventually calming public anger with "120 yuan compensation per day."

However, like Deep Blue G318, the anger of old car owners has not subsided. The switch between old and new models is the fuse for the outbreak.

Perhaps it is because, in order to block BYD's intelligent offensive, Deep Blue was in a hurry to upgrade and renew. The refreshed versions of Deep Blue S07 and L07 have the same entry-level price as the old models but add self-developed intelligent driving systems with advanced intelligent driving functions such as smart parking and high-speed pilot-assisted driving. Old car owners also hope to update the intelligent driving configuration or receive certain benefits as consolation. However, Deep Blue has not come up with a specific plan.

The problem of switching between old and new models exists in many brands and has a transitional period, which is understandable. However, if it cannot be properly resolved, it will also affect Deep Blue's unstable market reputation.

However, Deep Blue's resolution speed is "too slow" compared to other new brands. This is also because Deep Blue, which relies on the Chang'an Group's blood transfusion and cost compression, occupies an awkward position in the Chang'an Group's positioning.

If you ask the market, what is the reason to choose Deep Blue first? It seems difficult to have a clear answer.

Because, having been established for several years, Deep Blue has not yet formed a core competitiveness in quality, driving experience, and reputation, and consumers lack a clear reason to purchase when choosing. As an important part of Chang'an Automobile's new energy layout, Deep Blue has never had a clear brand positioning.

Coupled with the unclear product positioning, Deep Blue has not yet had a clear label. In the Chang'an system, AITO represents the high-end brand, and Qiyuan focuses on the entry-level market. One has high-end technical support, and the other has cost-effectiveness support.

Deep Blue is "sandwiched in the middle," wanting both ends but not touching either.

How to differentiate products is really a bit of a "clever housewife can't cook a meal without rice" for Deep Blue, after all, it shares Chang'an's technological support and platform resources with AITO and Qiyuan.

The unclear brand positioning and weak supply chain coordination ability have led Deep Blue to appear powerless in competition with strong rivals. Deep Blue G318 is a bloody example.

Being a "sandwich" is not easy.

Deng Chenghao once said, "Enterprises with insufficient internal strength have a very high probability of being eliminated in the next 3-5 years." He also once issued a military order, "Cut off the retreat and go to the vast Deep Blue without hesitation."

The top priority is for him to "find internal strength" for Deep Blue.

Note: Some images are sourced from the internet. If there is any infringement, please contact us for deletion.