AutoBeta(AutoBeta.net)07/13 Report--

On July 13, GAC-Mitsubishi issued a letter to all employees of GAC-Mitsubishi, with the signatures of the general manager and executive deputy general manager.

GAC-Mitsubishi said in its internal letter that the auto industry is undergoing a subversive change and that our auto market is rapidly transforming from traditional fuel vehicles to new energy vehicles. At present, GAC-Mitsubishi product sales fall far short of expectations and the operation is in trouble. In the general environment of industry reform, after careful discussion between the company's management and stock Dongfang, the company officially entered the stage of temporary suspension of production in June. At the same time, GAC-Mitsubishi will optimize its personnel structure according to the actual situation and try its best to protect the legitimate rights and interests of employees in accordance with the law.

In response to the news that "GAC-Mitsubishi may optimize its personnel structure", GAC GROUP said, "the situation is true. At present, the shareholders of GAC-Mitsubishi are doing their best to promote the rescue and transformation of the enterprise. According to the actual situation, GAC-Mitsubishi will optimize the personnel structure in accordance with the rules and regulations, and try its best to protect the legitimate rights and interests of employees. "

GAC-Mitsubishi, which was founded in 2012, did not cause too much splash in its early days, and it was not until 2016 that the domestic Olander saw a sales breakthrough. At that time, with the rapid growth of domestic SUV market demand, GAC-Mitsubishi introduced Olander into domestic production and sales, which had certain advantages in performance-to-price ratio and product power, and finally became a popular joint venture compact SUV model. In 2018, GAC-Mitsubishi sold 144000 vehicles for the whole year, which was the peak moment since Mitsubishi entered the Chinese market.

However, the Olander, which is in the development dividend period, did not upgrade in time, coupled with the emergence of a more cost-effective independent SUV, Olander sales fell sharply. According to the Federation of passengers, the cumulative annual sales of Olander in 2021 was 55856, while that of GAC-Mitsubishi fell to 71306. In November 2022, the Outlander was finally replaced, but instead of a boost, sales fell. In addition, GAC-Mitsubishi has also failed to seize the opportunity of the new energy wave, and the only electrified model on sale, the Artuco, has a weak sense of existence, and monthly sales have fallen to single digits.

At present, GAC-Mitsubishi models for sale include Outlander, Jinxuan, Yige and Atuco. These four models are all compact SUV, with a single product spectrum and heavy reliance on Olander for development. In 2022, GAC-Mitsubishi has only 38678 vehicles, of which 35323 are Outlander.

According to data released by GAC GROUP, by the end of 2022, GAC-Mitsubishi has total assets of 5.961 billion yuan, total liabilities of 5.953 billion yuan, asset-liability ratio of 99%, and is about to face the risk of insolvency.

In March this year, it was rumored that "the joint venture brand GAC-Mitsubishi will sell the Changsha plant to produce GAC-EAN electric cars, and the Mitsubishi brand may withdraw from the Chinese market". GAC-Mitsubishi responded: GAC-Mitsubishi is operating normally, Mitsubishi has not withdrawn, and the factory is operating normally. Although GAC-Mitsubishi denied rumors of withdrawing from the Chinese market, depressed sales in the first quarter of this year, which fell 57.95 per cent from a year earlier, could not hide the embarrassment it faced in the Chinese market.

After entering April, the life of GAC-Mitsubishi became more and more difficult, first of all, its production and sales data were hidden by GAC GROUP, because "the total data of GAC-Mitsubishi is too small to be listed separately." In addition, due to continued sluggish sales, GAC-Mitsubishi has stopped production of new cars and originally planned to resume the new car market in June, but eventually shelved and announced personnel optimization plans.

Since the beginning of the year, the price war in the automobile industry has swept more than 40 brands, and the cruel brand knockout round is under way. At present, the Chinese market is accelerating to focus on head-independent and new energy brands, the market share of second-and third-tier brands may face a long-term downward trend, and weak joint venture brands are gradually eliminated.

Even mainstream joint venture brands will inevitably be hit. Take GAC GROUP as an example, in the first half of the year, Guangzhou Auto Honda's sales fell 18.89% compared with the same period last year, Guangzhou Auto Toyota fell 9.48%, while GAC MOTOR and Guangzhou Auto Eian increased by 8.97% and 108.81% respectively.

According to CAC data, the top 10 car companies by sales in the first half of the year were BYD, FAW-Volkswagen, Changan Automobile, Geely Automobile, SAIC-Volkswagen, Guangzhou Automobile Toyota, SAIC General Motors, FAW Toyota, Dongfeng Nissan and Great Wall Automobile. Among them, the sales of all joint venture brands except FAW Toyota declined year-on-year, while those of independent brands except Great Wall Motor increased year-on-year.

Weak profitability not only dampens the enthusiasm of investors, but also hinders car companies from building long-term and sustainable competitiveness. GAC GROUP, who is in a period of transition, also needs to think about how to seize the last window to achieve the profitability of the new energy sector, while stabilizing the two joint venture car companies to extend the life cycle as much as possible.

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