AutoBeta(AutoBeta.net)12/18 Report--

Win-win cooperation? and be not so! According to media reports on December 17, Dongfeng Motor, which has been together for 19 years, and Dongfeng Yueda Kia have announced their separate ways. Dongfeng Group, which has a 25 per cent stake, has announced its formal withdrawal from Dongfeng Yueda, and the 25 per cent equity transfer project of Dongfeng Yueda Kia has been delisted at a transfer price of 297 million yuan, according to the Financial Associated Press.

At present, the withdrawal of Dongfeng Motor also means that Dongfeng Yueda Kia will change from the original three-way joint venture to Yueda and Kia. According to Dongfeng Yueda Kia, after Dongfeng Group withdrew from Dongfeng Yueda Kia, the company's future shares are still under negotiation with Yueda, and the results are expected to be announced in April next year.

Speaking of, it is also expected that Dongfeng Motor will withdraw from Dongfeng Yueda Kia. Dongfeng Motor will withdraw from Dongfeng Yueda Kia. It was reported in August this year that the three shareholders of Dongfeng Yueda Kia had signed a memorandum on the withdrawal of Dongfeng Motor Group shares in Wuhan. In early November, there were media reports that Dongfeng Motor would be listed to transfer 25% of Dongfeng Yueda Kia. China Finance and Economics pointed out in the report that Dongfeng Motor will be listed on the property rights exchange to transfer its 25% stake in Dongfeng Yueda Kia as soon as November. In addition, "negotiations have been launched in the middle of this year. Kia, Yueda and Dongfeng Motor re-evaluate the cooperation. Asia wants to expand the share ratio. Dongfeng Motor feels that it is not making money. The three parties quickly reached an agreement. In addition, the Economic Observer reported: Dongfeng Yueda Kia insiders said, "it has not been finalized, Dongfeng withdrawal should be certain", however, Dongfeng officials did not respond to the matter at that time. On the 21st, the Shanghai United property Exchange announced that Dongfeng Automobile Group Co., Ltd. was listed to transfer 25% of Dongfeng Yueda Kia at a transfer price of 297 million yuan. The industry believes that the equity transferred by Dongfeng Group is likely to be taken over by Hyundai Kia, which will have a stake of more than 75%, and Kia may take full control of the joint venture in the future. Of course, this is just a guess at that time. Dongfeng Yueda Kia has revealed that the specific stock ratio will be announced in April next year, and perhaps the company's stock ratio will be clearer by then.

According to public data, Dongfeng Yueda Kia Automobile Co., Ltd. is a tripartite joint venture company jointly established by Jiangsu Yueda Investment Co., Ltd., South Korea Kia Automotive Co., Ltd., with a shareholding ratio of 25%, 25% and 50% respectively. The business term of the joint venture is from September 12, 1992 to September 11, 2022. From the perspective of the term of the joint venture, it is less than one year from the expiration of the joint venture.

Although Dongfeng Group previously accounted for 25% of the equity in the three-party joint venture company, the leaders of Dongfeng Group have said earlier that Dongfeng Group has no substantial participation in Kia in China. More is to "help" for car-building qualifications. This time, Dongfeng Group is anxious to sell 25% stake in Dongfeng Yueda Kia. The industry generally believes that, on the one hand, the term of the joint venture is about to expire. On the other hand, it is because of the poor performance of Korean cars in China.

Relevant data show that the period from 2014 to 2016 was the highlight moment of Dongfeng Yueda Kia. In these three years, Dongfeng Yueda Kia's annual sales exceeded 600000 vehicles, and reached 650000 vehicles in 16 years. But after bidding farewell to the brief highlight moment, Dongfeng Yueda Kia entered a sustained downturn. Since 17 years, Dongfeng Yueda Kia has been in a state of loss, and sales began to decline sharply, such as annual sales plummeted to 359000 in 17 years, rebounded slightly to 370000 in 18, fell again to 289800 in 19, and then fell to 20 years because of the epidemic. Dongfeng Yueda Kia sold only 249000 vehicles, while Dongfeng Yueda Kia sold only 137900 vehicles from January to November this year.

From a series of data, Dongfeng Yueda Kia's sales have been in a state of decline for a long time since 17 years, and the decline in sales is naturally impossible for its operating income to be good. According to the Shanghai United property Exchange, in 2020, Dongfeng Yueda Kia achieved operating income of 21.94 billion yuan and net profit of-4.75 billion yuan; in the first 10 months of 2021, Dongfeng Yueda Kia achieved operating income of 12.477 billion yuan and net profit of-2.612 billion yuan.

However, in addition to poor sales of Dongfeng Yueda Kia, Dongfeng Renault, Dongfeng Peugeot and Dongfeng Citroen are also in trouble. Data show that Dongfeng Renault was dissolved and delisted last year, and recently another joint venture of Dongfeng Motor Group has come to a crossroads. On November 19, it was reported that DPCA, the first joint venture of Dongfeng Motor Group, is also in talks on equity adjustment, and there is already a preliminary plan. At that time, the relevant person in charge of DPCA revealed that the two shareholders were discussing the future of DPCA, and there was no conclusion at present, but it can be determined that the purpose of the discussion is for Dongfeng Peugeot and Dongfeng Citroen to better adapt to the development in China, and some adjustments and explorations may be made in the field of marketing.

DPCA, as the first joint venture under Dongfeng Motor, has an annual sales volume of 711000 vehicles in 2015, and has also been in trouble since then, such as selling only 50300 vehicles in 2020, although 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, etc., and some progress has been made, according to the data. DPCA sold a total of 86553 cars in the first 11 months of this year, but that figure is still a long way from its peak.

It is understood that in the first 11 months of this year, Dongfeng Automobile Group accumulated 2517170 vehicles this year, down 0.34% from the same period last year. This time Dongfeng Motor bid farewell to Yueda Kia may be able to devote more resources and energy to products with more development potential and better benefits, so as to achieve longer-term goals. As for the follow-up performance of Dongfeng Motor and Yueda Kia after parting ways, let's wait for the time to give the data.

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