AutoBeta(AutoBeta.net)11/21 Report--

According to the latest announcement of the Shanghai United property Exchange, Dongfeng Automobile Group Co., Ltd. listed to transfer 25% of Dongfeng Yueda Kia's stake at a transfer price of 297 million yuan.

Data show that Dongfeng Yueda Kia Automobile Co., Ltd. was established on September 12, 1992, jointly established by Dongfeng Automobile Group Co., Ltd., Jiangsu Yueda Investment Co., Ltd., and Kia Co., Ltd. the shares of the three parties are 25%, 25% and 50% respectively, and the operating life is from September 12, 1992 to September 11, 2022. In other words, once Dongfeng Motor successfully transfers its 25% stake in Dongfeng Yueda Kia, Dongfeng Motor will also launch Dongfeng Yueda Kia, and perhaps the word "Dongfeng" will no longer be seen in Kia's domestic models.

In fact, it has been rumored for a long time that Dongfeng Motor has withdrawn from Dongfeng Yueda Kia, but it has never been officially confirmed. In early November, according to China Finance and Economics, Dongfeng Motor will be listed on the property exchange to transfer its 25% stake in Dongfeng Yueda Kia as soon as November. In addition, according to the Economic Observer, Dongfeng Yueda Kia insiders said, "it has not been finalized yet, but Dongfeng's withdrawal should be certain."

Dongfeng Yueda Kia was once a dark horse in China's auto market, growing at the rate of sales growth. Before 2017, Dongfeng Yueda Kia developed rapidly, with annual sales peaking at 650000 vehicles in 2016. However, after entering 2017, Dongfeng Yueda Kia sales began to decline sharply, with sales of only 359500 vehicles in 2017 and continued to decline from 2018 to 2020, to 370000, 289800 and 249300 respectively. In 2021, Dongfeng Yueda Kia's sales also did not improve, with cumulative sales of only 111600 vehicles in the first three quarters.

With persistently depressed sales and growing differences in the management of the three-party joint venture, Dongfeng's departure may be a foregone conclusion. According to media reports, Dongfeng Automobile Zhu Yanfeng once said: "Dongfeng was pulled by Dongfeng Yueda Kia for qualification, and Dongfeng is only responsible for production, quality and internal process control, real product planning and product development." the procurement system is not involved. " Within the group, Kia is mainly responsible for sales and management.

According to listing information, Dongfeng Yueda Kia achieved a revenue of 21.94 billion yuan in 2020, but an annual loss of 4.75 billion yuan. From January to October 2021, Dongfeng Yueda Kia achieved a cumulative revenue of 12.48 billion yuan, but an annual loss of 2.612 billion yuan. According to the evaluation report of Zhongjing Minxin (Beijing) Asset Evaluation Co., Ltd., as of March 31 this year, the net asset of Dongfeng Yueda Kia is 350 million yuan, the evaluation value is 1.188 billion yuan, and the corresponding evaluation value of Dongfeng Motor transfer target is 297.01 million yuan.

Of course, during the period from 2017 to 2020, due to the intensification of market stock competition, domestic brands rose rapidly, in fact, except Dongfeng Yueda Kia, for example, joint ventures such as Beijing Hyundai, Dongfeng Renault, Guangzhou Auto Fick, Dragon Motor and other joint ventures have not performed well in the market, showing a collective downward trend. With regard to the current situation of Dongfeng Motor, with the exception of Dongfeng Honda and Dongfeng Nissan, the performance of other brands is very low, among which DPCA is still in the stage of revival and there is a lot of uncertainty about its development. Dongfeng Renault announced its delisting in April 2020, and Dongfeng Yulong is also in a shutdown state.

As Dongfeng's first joint venture, although the future of DPCA is bleak, it still has certain development expectations, falling after reaching an annual sales peak of 711000 in 2015, and selling only 50300 vehicles in 2020 under the influence of the epidemic. In the past two years, DPCA has launched a series of measures to save itself, including brand refurbishment, replacement of Chinese leaders, launch of new models and replacement models, and so on. DPCA has indeed made some progress. DPCA sold a total of 71963 vehicles from January to October, an increase of 88% over the same period last year. However, has Dragon Motors, as a French car company, been successfully saved? No, it's still a long way from its peak.

According to China Business report, Stellantis Group, the foreign shareholders of Dongfeng Motor and DPCA, has set up a working group to negotiate the equity adjustment of DPCA. The plan is for foreign investors to take a 75% stake in Dongfeng Peugeot brand owned by DPCA and 75% of the Chinese controlling shareholder, Citroen, although it is still inconclusive.

Let's talk about Korean car companies. At present, in addition to Dongfeng Yueda Kia, there is also Beijing Hyundai, but the current development of Beijing Hyundai is also not optimistic. The share of Korean cars in the Chinese market fell from 7.35% in 2016 to 4.63% in 2017, to 3.8% in 2020, compared with 2.5% in the first three quarters of this year, the lowest in nearly six years, according to the China Automobile Association.

Of course, the decline in the share of Korean cars in the Chinese market is not only related to brand development strategy, but also has a lot to do with the continuous differentiation of the market. First of all, the rapid rise of independent brands makes joint venture brands feel pressure, including SAIC-Volkswagen, Guangzhou Auto Toyota and other mainstream joint venture brands are speeding up the launch of product layout market, while Korean car companies are obviously much slower. Second, the upgrading of consumer car demand, no longer only consider the brand, but comprehensive product strength, services and other aspects, and this is also the deficiency of Korean brands. Finally, when the new energy has become a tuyere, joint venture brands and independent brands began to accelerate the layout of new energy, while Korean brands once again walked behind, unable to quickly seize the market, and finally had to eat what was left.

Then return to Dongfeng Motor. At present, Dongfeng Automobile is maintained entirely by joint venture plates, while the independent plate has always been weak. Obviously, Dongfeng Motor is also aware of the problem and rapidly increase its independent high-end layout. Launch the high-end new energy Lantu brand. Perhaps, stripping off non-performing assets and devoting more resources and energy to products with more development potential and better benefits are more in line with Dongfeng Motor's long-term strategy and planning goals.

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