AutoBeta(AutoBeta.net)08/17 Report--

On August 16, Dongfeng Automobile Group Co., Ltd. (hereinafter referred to as "Dongfeng Automobile") announced the launch of the new energy strategy of Dongfeng passenger vehicles and made a major adjustment to the management system of the new energy cause of independent passenger vehicles. The adjustment involves Dongfeng Motor's own brand new energy product line, including Dongfeng Fengshen, Dongfeng e π and Dongfeng Nano product series. After the adjustment, Dongfeng Motor will manage Dongfeng Fengshen, Dongfeng e π and Dongfeng Nano in an integrated way. in short, Dongfeng Fengshen, Dongfeng e π and Dongfeng Nano will no longer fight on their own, but will be directly operated by the headquarters.

Dongfeng Motor said that the integrated management of the three major product series brands of Dongfeng Fengshen, Dongfeng e π and Dongfeng Nano is an important layout for the rapid development of new energy in the automotive industry after the release of the 14th five-year Plan "Dongfeng Qi" plan and the "transition action" of scientific and technological innovation.

In fact, the road of new energy transformation of Dongfeng Motor has been laid out as early as 2021, and a huge amount of money has been invested. In April 2021, Dongfeng Motor released the "Oriental Wind" plan and the "transition Action" of scientific and technological innovation. But in the end, the above plan failed to translate into actual sales, and Dongfeng hopes that this structural adjustment can reduce the level of management, improve decision-making efficiency, play a synergistic effect, and in the rapidly erupting new energy market, grasp the window of new energy transformation as much as possible.

In July 2020, Lantu Automobile was released, and then three models of Lantu FREE, Lantu Dreamer and Lantu Yuguang were launched respectively. Fierce car was released in August 2022, and the first production model, Mengshi 917, was first launched and officially booked at the previous Shanghai Motor Show, with a pre-sale price range of 700000 yuan to 1.6 million yuan. In April this year, Dongfeng God released a new mainstream electric series brand-e π. In July, Dongfeng announced that Dongfeng Nano, a new small pure electric car brand, will be launched in the second half of this year, when it will also launch its first new car. As a result, Dongfeng e π, Dongfeng Nano, Dongfeng Fengshen, Lantu and Mengshi and other brands jointly constitute the territory of Dongfeng Automobile independent new energy passenger vehicles.

However, in the organizational structure of Dongfeng Automobile, Dongfeng Fengshen belongs to the independent passenger car brand of Dongfeng Automobile, while e π is the new energy brand released by Dongfeng Fengshen, while Lantu and Mengshi are different from Dongfeng Shen. these two major brands operate independently and do not belong to any independent brand passenger car company under Dongfeng Motor, but only under Dongfeng's Hong Kong listed company "Dongfeng Automobile Group Co., Ltd.". As for Dongfeng Nano, which has not yet been officially released, it is also a subsidiary of Dongfeng Automobile Group Co., Ltd.

Although Dongfeng Motor is not late in the transformation of new energy, its terminal sales of new energy vehicles are not good. Data show that Dongfeng Motor sold a total of 470000 new energy vehicles in 2022, but most of the sales came from lower-priced ride-hailing cars. After entering 2023, due to the continuous decline of the joint venture non-luxury brand market, the sales and profits of Dongfeng Motor's joint venture passenger car business have dropped sharply. On August 14, Dongfeng Group shares issued an announcement on the Hong Kong Stock Exchange, predicting a 75% decline in net profit in the first half of 2023 compared with the same period last year. Dongfeng Group explained that the sharp decline in profits was caused by increased investment in the transformation of new energy and the continued decline in the market share of joint venture non-luxury passenger car brands in the industry.

Data show that Dongfeng Motor Group Co., Ltd. sold 945500 vehicles in the first half of this year, down 23.4% from the same period last year. Among them, sales of Dongfeng Honda and Dongfeng Nissan, the main source of sales of Dongfeng Motor Group, fell 32.80% and 28.02% respectively compared with the same period last year, while sales of DPCA, which represents the legal system, also fell 21.56% compared with the same period last year. In terms of new energy brands, in the first half of the year, the cumulative sales of Lantu cars increased by 118.54% to 15000 vehicles compared with the same period last year, while easyJet New Energy increased by 35.47% to 50200 vehicles. Although Lantu Automobile has greatly increased compared with the same period last year, it is still a far cry from the current mainstream car-building new forces in the car market, while Egett New Energy is mainly facing overseas markets.

Dongfeng Group has previously made clear to the outside world its determination to transform new energy, including that its main independent brands will be 100% electric by 2024, and by 2025, the annual sales of its own brands and joint venture brands will reach 2 million each. At that time, the sales of new energy vehicles of independent brands account for 50% of independent brands and 70% of independent passenger car brands. To this end, Dongfeng Group also bet 50 billion yuan, planning to accelerate the transformation of new energy in the next three years.

This year is the key year for Dongfeng Motor to implement the "three-year Action of Transformation and upgrading". However, combined with Dongfeng Motor's performance of new energy sales in the first half of this year, its heavily invested new energy brands have not played a role in boosting the group's sales at present. The new energy transformation plan still has a long way to go. Data show that Dongfeng Group's total sales of new energy vehicles in the first half of this year were only 128600, down 7.0 per cent from the same period last year. At present, Dongfeng Motor urgently needs to make changes in the new energy product line and market strategy.

After this structural adjustment, Dongfeng Motor will set up Dongfeng passenger car sales Co., Ltd. and Dongfeng passenger car manufacturing headquarters to manage the marketing and manufacturing of Dongfeng Fengshen, Dongfeng e π and Dongfeng Nano brands under the "Dongfeng" brand. At the same time, Dongfeng Motor also centralizes the commodity planning and project management of the three major product brands in the group headquarters, realizing the centralization of commercial enterprises, manufacturing and marketing. After the adjustment, the brand positioning of the three major product series will be clearer, among which, Dongfeng Fengshen will accelerate the transformation from fuel vehicles to energy-efficient vehicles, and Dongfeng e π will position as an electric brand oriented to the mainstream market. Dongfeng Nano is a pure electricity brand for small market segments and will be released on August 23.

At this point, Dongfeng Motor will form "Dongfeng" brand, "Lantu" brand and "Dongfeng" brand in the field of independent passenger cars, which will face the mainstream market, high-end new energy market and luxury electric off-road market respectively. In fact, with the rise of independent new energy brands, the immobility of joint venture fuel vehicles is a difficult problem faced by many traditional car companies at present. for Dongfeng, the decline of joint venture brands forces Dongfeng Motor to think about the breakthrough in the context of new energy. in the environment of fierce competition, we should reduce our dependence on joint venture brands as soon as possible to catch up with the opportunity of the rapid development of domestic new energy or the key to its transformation and breakthrough. As for whether the adjustment of the architectural strategy can help it out of its predicament, leave time to test it.

Or affected by the news of the adjustment of the management system of Dongfeng Motor, on the morning of August 17, the shares of the Hong Kong Dongfeng Group rose more than 3% to 3.1 Hong Kong dollars per share.

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