AutoBeta(AutoBeta.net)01/20 Report--

According to media reports, Kia revealed that the name of the new company under the new share ratio structure will be announced at the Beijing Auto Show to be held in April 2022. As for the name of the new joint venture, the industry speculated that it might change its name to "Yueda Kia" or "Kia China", but none of them could be confirmed.

In the past 2021, Kia has undergone major changes at home. On November 19, 2021, Dongfeng Automobile Group Co., Ltd. publicly listed its 25% stake in Dongfeng Yueda Kia Automobile Co., Ltd. through the Shanghai United property Exchange at a listing price of 297 million yuan. On January 12, 2022, Dongfeng Automobile Group Co., Ltd. closed its 25% stake in Dongfeng Yueda Kia Automobile Co., Ltd., with Jiangsu Yueda Automobile Group Co., Ltd. (hereinafter referred to as "Yueda Automobile Group") as the sole bidder.

Data show that Dongfeng Yueda Kia Automobile Co., Ltd. was established on September 12, 1992, jointly established by Kia Co., Ltd., Dongfeng Automobile Group Co., Ltd., and Jiangsu Yueda Investment Co., Ltd., with shares of 50%, 25% and 25% respectively. After the completion of the equity transfer, Dongfeng Yueda Kia Automobile Co., Ltd. was changed into Kia Co., Ltd., Yueda Automobile Group, and Jiangsu Yueda Investment Co., Ltd., each holding 50%, 25% and 25% respectively. Yueda Automobile Group was founded on June 18, 2021, with 70 percent of the shares held by the controlling shareholder Yueda Group and 30 percent of Yancheng State-owned assets Investment Group Co., Ltd., according to the documents.

Time is back to 20 years ago, when Yueda Group did not have the production qualification, in order to successfully land the project, Yueda Group took the initiative to contact Dongfeng Motor, which won 25% of the shares by virtue of its production qualification. In the more than 20 years since the establishment of Dongfeng Yueda Kia, it has also had moments of high light. Data show that Dongfeng Yueda Kia sold 646000, 616000 and 650000 vehicles respectively from 2014 to 2016, especially in 2016, when its sales reached an unprecedented high. However, Dongfeng Yueda Kia has been in decline since 2017, with sales of 359000, 370000, 289800 and 249000 vehicles respectively from 2017 to 2020, compared with only 152000 in the past 2021.

The continuous decline in sales has led to the deterioration of Dongfeng Yueda Kia's operating performance, and the poor financial performance for many years has become an important incentive for Dongfeng Motor to withdraw its shares. Data show that the net losses of Dongfeng Yueda Kia in the first half of 2017-2021 were 1.123 billion yuan, 492 million yuan, 1.299 billion yuan, 4.75 billion yuan and 1.371 billion yuan respectively, with a cumulative loss of 9.035 billion yuan in four and a half years.

Cao he, president of United car Merchants Investment Management (Beijing) Co., Ltd., said, "Dongfeng will withdraw sooner or later. In the three-party joint venture, Dongfeng did not contribute capital, but traded production qualifications for 25% of its shares. Dongfeng once wanted to expand its equity ownership, but Yueda Investment did not agree. Dongfeng's voice in the joint venture company is not high, so resource investment is naturally not active."

From November 2021 to January 2022, the equity transaction ended more than 20 years of joint venture development in less than three months. However, the withdrawal of Dongfeng Motor from the joint venture is not necessarily a bad thing. For Dongfeng Motor, farewell to Dongfeng Yueda Kia may be able to devote more resources and energy to more potential and cost-effective products, so as to achieve longer-term goals. For Kia, more control can be obtained, and decisions are made by all parties in their own hands.

With the withdrawal of Dongfeng Motor, Kia will also accelerate its own reform measures. Kia said that in 2022, it will increase investment in the Chinese market, strengthen brand building, improve organizational efficiency, improve product quality, and improve the level of dealer operation and management.

According to media reports, in order to further create high-quality products and accelerate the introduction of more competitive global models, Kia has gradually stopped producing models below 100000 yuan. It is understood that Dongfeng Yueda Kia is currently selling models with less than 100000 yuan, including Yi run, Huanchi and Freddy. According to the data, the total sales of Yayi since 2021 is 19881, with an average monthly sales of about 1600, while Freddy's sales are 15574 and the best monthly sales are 2800 and Huanchi is only 5602. In view of the above news, Kia confirmed it. Liu Changyi, general manager of Dongfeng Yueda Kia, said, "We will no longer compete at low prices, but win the recognition of consumers through the competitiveness of our products." In the future, models priced below 100000 yuan will stop production as soon as possible to seek high-quality development. "

In the new product, Yueda Kia will launch the new flagship SUV Sportage and K3 medium-term revamped models, the introduction of Sportage's HEV hybrid model. In terms of new energy, Yueda Kia will introduce an electric car every year.

It can be said that Kia's plan to phase out low-end cars is conducive to brand reshaping, but in fact, Kia's market share in mid-and high-end models has not broken through with the introduction of new products. In the past 2021, Kia launched the Ace and the fourth-generation Jiahua in China. In terms of sales, the Ace sold 39973 vehicles, while the K3 sold 23023 vehicles, while the K5 Kaiku sold only about 1500 vehicles per month last year, and the KX5 sold only 3666 vehicles.

From January 1, the Chinese market will lift the restrictions on the ratio of foreign investment in passenger car manufacturing and the restrictions on the establishment of two or less joint ventures producing similar vehicle products by the same foreign businessman in China. This means that Yueda Kia, which sorted out its shares, will play a big role this year. However, the competition in the domestic market will certainly become more and more fierce in the future. with the development and growth of independent brands, the mainstream joint venture brands are also constantly exploring the market, leading to the survival crisis of joint venture brands at the bottom.

Welcome to subscribe to the WeChat public account "Automotive Industry Focus" to get the first-hand insider information on the automotive industry and talk about things in the automotive circle. Welcome to break the news! WeChat ID autoWechat