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According to Caixin, Jiangsu Yueda Kia Co., Ltd. recently issued an internal notice: in order to realize the electrified transformation, the business staff structure needs to be integrated. The company arranges management staff to take turns off in batches, the first batch of which lasts as long as one year, from June 1, 2023 to May 31, 2024.

The notice shows that during the period of rotation, the company will pay wages normally in the first month; from the second month, the company will pay wages according to the local minimum wage, during which employees will not enjoy company benefits, salary adjustment, incentive payment and other policies. It is understood that the management staff of Yueda Kia involve Yancheng and Shanghai, where the minimum wage is 2070 yuan / month and 2590 yuan / month respectively, which is regarded as a "disguised layoff" by employees within the company to avoid financial compensation attached to layoffs and streamline personnel with the lowest cost.

Jiangsu Yueda Kia Co., Ltd., formerly known as Dongfeng Yueda Kia, was established in August 2002 and jointly funded by Dongfeng Automobile Group, Jiangsu Yueda Group and Kia Motor. Kia Motor, Dongfeng Automobile Group and Jiangsu Yueda hold 50%, 25% and 25% of the shares respectively. In January 2022, Dongfeng Motor Group withdrew and resold its 25% stake in Dongfeng Yueda Kia for 297 million yuan. Jiangsu Yueda Automobile Group Co., Ltd. was the sole bidder. Dongfeng Yueda Kia has since changed its name to Jiangsu Yueda Kia. Among them, Kia is the absolute controlling shareholder.

Kia, which has lost the east wind, is no better. After the renaming of Jiangsu Yueda Kia, the wholesale sales of Jiangsu Yueda Kia in 2022 were 129897 vehicles, down 20.35% from the same period last year. In addition, according to South Korea's Kia Automobile Annual report on sale, Yueda Kia posted an annual net loss of 2.4768 trillion won (about 13 billion yuan) in 2022, with an asset-liability ratio of 119.0%, which has been seriously insolvent.

Previously, Yueda Kia has been advancing by leaps and bounds, and its market sales have been growing steadily since 2006. It has been sought after by many consumers for its pragmatic appearance and high performance-to-price ratio, and reached the peak of annual sales of 650000 vehicles in 2016. However, due to the lack of South Korean resources, insufficient product power, slow electrification and other factors, Yueda Kia is weak and gradually deviates from the development of the Chinese market.

In 2017, Dongfeng Yueda Kia sold 359500 vehicles, down 45 per cent from the same period last year and achieving only 51 per cent of its annual sales target of 700000 vehicles. By 2021, Dongfeng Yueda Kia will sell only 163400 vehicles for the whole year. Auto Industry concern learned from the information disclosed by Jiangsu Yueda Investment Co., Ltd. (hereinafter referred to as "Yueda Investment") that the net profits of Dongfeng Yueda Kia from 2017 to 2021 were-1.123 billion yuan,-492 million yuan,-1.299 billion yuan,-4.75 billion yuan and-2.612 billion yuan, respectively. DYK lost 10.276 billion yuan in four and a half years.

It is worth noting that although Kia's sales in the Chinese market are sluggish, the overseas sales figures are very bright. In 2022, Hyundai Kia sold a total of 6.848 million vehicles, making it the third largest automobile group in the world after Toyota and Volkswagen, of which Kia sold 2.9036 million vehicles, up 4.6 per cent from the same period last year. Kia's annual revenue in 2022 was 8.656 billion won (475.6 billion yuan), up 23.9 percent from a year earlier, and its net profit was 541 million won (29.72 billion yuan), up 13.6 percent from a year earlier, according to the financial report.

On March 20, Kia China officially announced its blueprint for accelerating the transition to electrification. At the conference, Kia will unveil China's medium-and long-term new energy strategy and unveil three new electric models, the EV5 concept car, the EV9 concept car and the EV6 GT, of which the EV5 will be launched in November, which will be Kia's first global model produced in China and debuted.

According to the plan, from 2023, Kia will launch at least one pure electric vehicle every year based on the electrified global modular platform E-GMP; by 2027, it will launch a total of six EV models; and by 2030, it will achieve the annual sales target of 180000 EV models, accounting for 40% of the total.

The return to Yueda Kia adjustment also shows the difficult side of overseas car companies facing electrified transformation. Nowadays, the competition in China's car market is becoming more and more fierce, especially in the new energy car market, adding to the difficulties of traditional car companies that have accumulated in the fuel vehicle market for decades, adding to the pressure on manufacturers who lack core technology.

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