AutoBeta(AutoBeta.net)03/14 Report--

After this epidemic, a number of car companies may be eliminated. People in the industry believe that the epidemic has accelerated the pace of bottoming out in the automobile industry, accelerated the elimination of backward car companies, and shortened the time for the adjustment of the automobile industry cycle. At the same time, the epidemic situation has also accelerated the transformation, upgrading, merger and reorganization of automobile enterprises.

With the continuing impact of the epidemic and great pressure on the market, many large car companies have fallen into a storm of "wage cuts", while some difficult car companies may face long-term suspension of production, and senior employees have to face the pressure of work and life. According to an internal document, Jiangling Holdings Co., Ltd. has stopped work and production from now on, and the income of all employees has been reduced across the board.

A few days ago, Jiangling Holdings Co., Ltd. issued a notice on the adjustment of employee income during the shutdown period. After being examined and approved by the President's Office, the company decided to adjust the income of all employees during the shutdown period. We are in the same boat to tide over the difficulties. The measure will be implemented from March 13 until the company resumes normal production and operation.

According to the notice, the income of all employees of Jiangling Holdings (basic salary + performance award) has been reduced, the income of executive vice president and above has been reduced by 40%, and the income of vice president to ordinary employee level has all been reduced by 30%.

In addition, Jiangling Holdings pays an additional proportion of income subsidies to employees who provide normal work during the shutdown, while abolishing employee allowances that do not come to work at the company. In the notice column, it is Lu Zeyong, president of Jiangling Holdings Co., Ltd.

According to official data, Jiangling Holdings Co., Ltd. was established in November 2004, mainly operating Lufeng automobile brand, and successively launched Lufeng X9, X6, X8, X7, Xiaoyao and other products, covering non-load-bearing and load-bearing SUV, compact and small SUV markets.

The Land Wind X7, launched by Land Wind in September 2015, was once a hot topic in China's automobile industry because of its similar design to the range Rover aurora model.

In 2016, Jaguar Land Rover Co., Ltd. sued the court for unfair competition and copyright infringement, accusing Land Wind X7 of plagiarizing the design of Land Rover Aurora. After three years, the court issued a judgment of first instance in March 2019, ruling that Lu Feng X7 copied the range Rover aurora design and paid 1.5 million yuan in compensation to Land Rover. Since then, Jiangling Holdings has applied to the Supreme Court for a retrial, saying it is not satisfied with the administrative decision made by the Beijing High Court. In December 2019, the Supreme Court finally rejected Jiangling Holdings' application for retrial.

Since then, Lu Feng X7 plagiarized Land Rover case ended, Jiangling Holdings compensation of 1.5 million yuan.

In addition, due to the change of market environment and the decline of enterprise competitiveness, Jiangling Holdings has changed ownership.

The original two major shareholders of Jiangling Holdings are Jiangling Group and Changan Automobile. In August 2019, Aichi Automobile increased its capital as a strategic investor. Aichi Motor plans to increase its capital by 1.747 billion yuan, eventually taking a 50% stake in Jiangling Holdings. Jiangling Group and Changan Motor holding shares were diluted to 25% respectively.

This cooperation led to the first case of mixed reform of central enterprises, local state-owned enterprises and private enterprises in China. Changan Automobile also said in the announcement that the direct reason for Aichi's capital increase in Jiangling Holdings is the decision of the market environment. At present, the SUV market has entered an integration period, the fuel vehicle market has entered an inflection point, and the market layout direction has turned to intelligent and new energy vehicles. Coupled with the fact that the SUV market is currently in a competitive position for all automobile enterprises, the subsequent development of Jiangling Holdings in the SUV market will continue to become more difficult. In order to enhance the development vitality and improve the operational efficiency of Jiangling Holdings, it will be transformed to the direction of new energy and intelligence. And continue to expand the development space of the industrial chain, need to introduce external resources for equity diversification reform, and finally achieve the smooth transformation of Jiangling Holdings.

Aichi Automobile is a new car-making power company founded in 2016 by Fu Qiang, former president and CEO of Volvo China sales Co., Ltd., while Jiangling Holdings takes a stake in Jiangling Holdings directly to win the car-building qualification and factory.

"the difficult times for automobile enterprises have come, and it is not easy to be alive," industry insiders said. The epidemic acts as a catalyst to accelerate the elimination and upgrading of the industry. It is unknown where Jiangling Holdings and Lufeng Motor will stop production, but changes in the market have made it difficult for them to survive.

Data show that Jiangling Holdings accumulated sales of 157473 vehicles from January to July 2019, down 21% from the same period last year. Since then, due to the completion of the change of Jiangling holding shares, Changan Automobile has not disclosed Jiangling Holdings' production and sales data.

From the perspective of products, Lu Feng Glory and Lu Feng Xiaoyao have become the main selling models of the brand, and the X series models almost fade out of the market vision. Due to the decline of brand competitiveness, Lufeng is also facing more market problems.

China's automobile industry has entered the cold winter of the third year, making it difficult for many car companies to survive. Now, with the occurrence of the epidemic, it has further aggravated the plight of car companies. It is reported that as some car companies have announced that they will stop production and cut wages, such a continuous decline will also force employees to leave voluntarily.

Shi Jianhua, deputy secretary general of the China Association of Automobile Manufacturers, said that the top 10 car companies accounted for more than 90% of the market for the first time. "if marginal enterprises fail, they will only be eliminated." Only in 2019, including Zhongtai, Junma, Lifan, Haima, Cheetah, BAIC Yinxiang, Speed Motor, Huatai Automobile, Dongfeng Yulong and so on, there was a sharp decline in sales and business difficulties.

Industry insiders predict that in the future, most of China's own brands will die out or be merged, and local car companies may eventually be left with only about 10.

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