AutoBeta(AutoBeta.net)02/07 Report--

Kia's joint venture in China has made the latest progress. today, South Korea's Kia signed a contract with the Yancheng people's Government of South Korea and Jiangsu Yueda Group. Kia and Yueda will set up a new joint venture in Yancheng, Jiangsu Province as a base for future development. expand investment to introduce more global models and new energy models, and six new electric vehicles will be launched one after another by 2027, opening a new era of Korean Kia's joint venture in China.

Kia plans to set up a new joint venture with its former partner, Jiangsu Yueda Group, which plans to increase its capital by 900 million US dollars by expanding investment, introducing new models, developing new energy vehicles, and setting up an export base. Rapidly increase vehicle sales and capacity utilization. According to the plan, the two sides will release the name of the new company in April this year.

The Yancheng municipal government, through Jiangsu Yueda's financial investment role in the new joint venture, said it would fully support Kia to expand sales in the Chinese market and provide support for the export trade of the Yancheng factory. To help Kia develop in China. Since Asia entered China in 2002, it has sold nearly 6 million complete vehicles, which has effectively promoted the development of the local auto parts industry. In view of this, it is highly likely that Kia will gain more important decision-making power in the newly opened joint venture and seek to make a comeback in China.

Kia has been in China for 20 years and now plays a marginal role in the market performance of major auto companies. In 2002, a joint venture legal person was established in China through a joint venture with Dongfeng Motor and Jiangsu Yueda Group, in which Qiya held 50% of the shares and Dongfeng and Yueda each held 25% of the shares. Their operating life lasted from September 12, 1992 to September 11, 2022. From the perspective of Chinese and foreign and local equity allocation, the power of the three parties is relatively equal, which also means that there may be a lack of dominant ideological power in multi-party cooperation. After several years in China, ushered in the outbreak of China's auto market, and Korean cars to design-oriented, but also won a lot of consumers. However, under the influence of "THAAD entering South Korea" in 2017, Kia's sales in China have plummeted from 650000 in 2016 to 360000 in 2017, and the impact of the epidemic has dropped to 249000 in 2020, and then to 127000 last year.

The epidemic can cause bad companies to swim naked, but the problem was already exposed before the epidemic. On the last day of 2019, Dongfeng Yueda Kia announced that four senior Kia executives had been transferred. According to the arrangement of the company's Oriental personnel, Mr. Li Zhijun, the deputy general manager and head of the management department appointed by Yueda recently, Mr. Jin Xuantu, the purchasing department minister appointed by Asia, and Mr. Min Yizai, director of the research institute appointed by Asia. Mr. Ye Lei, deputy head of sales department appointed by Yuedafang, will no longer hold the relevant positions of Dongfeng Yueda Kia Automobile Co., Ltd., and will be transferred back to Dongfang. In the same month, 22 dealers withdrew from the net. it was a dispute or a sales volume that led to the unknown to the outside world. "at present, there are many problems that enterprises have accumulated over a long period of time, and everyone's feelings are very mixed and anxious, and we need to face and break through together," said Li Feng, general manager of Dongfeng Yueda, who just took over. Before that, some Dongfang leaders said that Dongfeng Group had no substantial participation in the Kia company in China, and it was more of a "help" for car-building qualifications.

Under the influence of stock ratio allocation, multi-shareholder game and sales volume, there is still one year to go before the operating life of the three parties, and the shareholders of the three parties have lost their plans to continue to operate together. In November 2021, it was reported that Dongfeng Group would withdraw. The small sales volume is not attractive to Dongfeng, which has joint venture brands such as Dongfeng Honda, Dongfeng Nissan, DPCA and Dongfeng Yueda Kia. Except for Dongfeng Honda and Dongfeng Nissan, the performance of other brands in the market is not optimistic. Obviously, stripping off non-performing assets is also what Dongfeng Group wants to happen. On November 21, Dongfeng Group officially listed on the Shanghai United property Exchange to transfer its 25% stake in Dongfeng Yueda Kia. Amazingly, the transfer price was only 297 million yuan, and Dongfeng Group announced its formal withdrawal from Dongfeng Yueda Kia. 25% of the sales were taken over in the previous ownership structure, which is believed to be reflected in the new ownership structure in mid-April. Kia has gained absolute control in the joint venture.

On December 27, 2021, the National Development and Reform Commission and the Ministry of Commerce issued the "Special Management measures for Foreign Investment access (negative list) (2021 version)". Starting from January 1 this year, the previous restrictions on foreign equity ratios in passenger car manufacturing have been liberalized. this is the policy that foreign car companies expect to have landed, and a number of car companies have made equity adjustments one after another. in this context, Kia is obviously no exception.

In the era of tripartite shareholders, observers attributed Kia's problems to a lack of introduction of new models and a lack of marketing. New Kia gives the answers to the above two questions. In terms of new models, it will focus on promoting the introduction of global strategic models and new energy vehicles. The new models on the market this year will add more new configurations, together with Jiahua, Zhirun Ace and other models on sale, to improve the global strategic model lineup of Kia. Starting with the introduction of electric car EV6 from next year to 2027, Kia will launch electric models in the Chinese market every year.

At the same time, Kia will also actively carry out innovative marketing activities. Kia said at the signing ceremony that it will show Chinese consumers the future vision of new Kia and sustainable development. With the location of the dealer as the center, we will strengthen regional marketing and effectively increase consumer brand experience contacts; at the same time, we will continue to carry out "door-to-door test driving" and "door-to-door service" throughout the year, so that consumers can test-drive new cars and meet basic after-sales service at home, and enjoy a good brand experience. At the same time, the new SI (Terminal Image system) will be applied to all 4S stores and urban showrooms to make everyone feel the brand image of Kia taking on a new look.

In the past joint venture era, one of the reasons for the poor sales of a brand was the running-in problems of shareholders, or the reluctance of foreign shareholders to introduce global models. In that case, in the new era of joint ventures, they will have enough decision-making power, and these problems will no longer become excuses for failure. Whether they can sweep away these old problems and become bigger and stronger is something to look forward to. In the next ten years, Kia has set a goal of producing and selling more than 4 million units in China.

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