AutoBeta(AutoBeta.net)06/05 Report--

On June 5, Chongqing Changan Automobile Co., Ltd. (hereinafter referred to as Changan Automobile) issued a notice on the change of the company's directors. Zhang Baolin, former deputy general manager of China Arms and equipment Group and chairman of Changan Automobile, will no longer hold the position of director and chairman of the company due to job changes, and does not hold shares in the company, the announcement said.

It is reported that Zhang Baolin left his job because he will be promoted to be an independent director of the State-owned assets Supervision and Administration Commission in the central enterprise. As for Zhang Baolin's successor, it has been reported that China Arms equipment Group intends to recommend Zhu Huarong, party committee secretary and president of Changan Automobile, for the post, but none of the above news has received a positive official response.

Zhang Baolin can be regarded as a veteran of Changan Automobile. Data show that before joining Changan Automobile, he worked in the Southwest military Industry Bureau, Chongqing Changfeng Machinery Factory, and Chengdu Wanyou Economic and technological Development Corporation, all of which belong to China Arms and equipment Group Corporation.

From March 2001 to December 2014, Zhang Baolin joined Changan Automobile, and successively served as vice president and executive deputy general manager of Changan Company, general manager of sales company, deputy secretary of the party committee of Changan Automobile Group Co., Ltd., director and president of Changan Automobile Co., Ltd., and Zhang Baolin served as president of Changan Automobile Group in December 2014. In September 2017, Xu Liuping, former chairman of Changan Automobile, was transferred to chairman of FAW Group, and Zhang Baolin succeeded Xu Liuping as chairman of Changan Automobile.

2017 is the turning point of Changan automobile sales, Zhang Baolin as chairman of Changan Automobile can be said to be appointed in the face of danger. According to the data, Changan car sales totaled 3.0634 million in 2016, but dropped to 2.872 million in 2017, 2.1378 million in 2018 and 1.76 million in 2019. Among them, the joint venture brand Changan Ford suffered the biggest decline, with sales falling 12.27% to 827970 vehicles in 2017, 377739 vehicles in 2018 and 183987 vehicles in 2019, nearly halving sales from the previous year. Therefore, for Changan Automobile, the deep quagmire of joint venture brand sales is still the key to the sharp decline in sales.

After the spin-off of Changan Suzuki and Changan PSA, there are only two joint venture brands: Changan Ford and Changan Mazda, but from the current situation of these two companies, it is difficult to play a strong expressive force, especially Changan Ford, it is difficult to replicate the sales performance of 830000 vehicles in 2017. Industry insiders say frankly that the key to whether Changan Automobile can turn losses into profits lies in the boost of the joint venture business.

At the beginning of this year, Changan Automobile said it would produce and sell more than 1.91 million vehicles in 2020. As of April, the cumulative sales of Changan Automobile fell by 18.25% to 462635 vehicles, of which Changan independent sales were 249698, Changan Ford and Changan Mazda sold 50921 and 29101 respectively, which currently achieved 24.22% of the annual sales target.

According to Changan Automobile's financial report, the operating income in 2019 was 70.595 billion yuan, an increase of 6.48% over the same period last year; the net profit belonging to listed companies was-2.647 billion yuan, down 488.81% from the same period last year. In the first quarter of this year, the operating income of Changan Automobile was 11.564 billion yuan, down 27.76% from the same period last year; the net profit belonging to listed companies was 631 million yuan, up 130.10% from the same period last year. The reason for the increase in net profit in the first quarter of Changan Automobile is mainly due to the increase in capital and shares of wholly-owned subsidiaries in the form of public listing. Changan Automobile received a total of 1.42 billion yuan from four strategic investors.

Strictly speaking, Changan Automobile is still in a state of declining profits, only to increase capital and shares to increase capital in order to achieve profits. For Changan Automobile, the current decline in net profit has become the top priority of Changan Automobile. However, Zhang Baolin leaves Changan Automobile, and his successor is unknown. How can Changan Automobile turn losses into profits?

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