AutoBeta(AutoBeta.net)05/27 Report--

Fiat Chrysler Group announced today that it has issued a merger proposal to Renault to form a new automobile group, each accounting for 50 percent, and the new company will become the third largest automobile group in the world. The news stimulated Renault to rise to 57.47 euros at 9:55 local time in Paris, an increase of about 14.74 percent.

Fiat Chrysler said that after the merger, the entity would have a balanced governance structure by both parties, with both parties holding shares at 50:50, and the combined entity would be managed by independent directors stationed by their respective directors. the merger will solve the problem of slowing car sales and reduce spending on new energy models or new model development. After the merger, it will have 12 brands and will become the third largest automobile group in the world. However, the news did not mention whether the alliance members included Nissan Mitsubishi.

The data performance of the two sides in China varies and has been at the bottom of the performance.

Dongfeng Renault relied on Nissan, which entered China earlier, to produce two models in China in 2013, Coreao and Krajia, both based on Nissan's Qijun and Xiaoke, but Renault's performance in China has not been satisfactory. Renault's sales rose 140 per cent year-on-year to 72000 in 2017. As a result, Dongfeng Renault defined 2018 as the "brand year" and put forward the goal of "ensuring nine and fighting for ten", that is, sales of at least 90, 000 vehicles for the whole year and 100000 for the whole year. But in the sales data for the whole of last year, Dongfeng Renault fell 30.8% year-on-year with sales data of 50,000 vehicles.

The collapse in sales directly leads to the increase of dealer inventory and the increase of distribution network crisis. A few days ago, the results of the "car Dealer inventory" survey released by the China Automobile Circulation Association in November showed that a total of 21 brands had inventory depth of more than two months in November, while Dongfeng Renault ranked third with an inventory coefficient of 3.6. What does "3.6" mean? It means that the existing inventory of the dealer can continue to operate normally for 3.6 months without picking up the car from the manufacturer. Many dealers choose to withdraw from the net one after another because they can not bear the excessive inventory pressure and the loss of bicycle profits.

Similarly, Renault's product quality problems have been criticized, and many forum posts are about the problems of gearboxes, engines and body accessories for Corello and Correa models. And a large number of complaints from car owners have not been resolved in a timely and effective manner, which makes Renault's low reputation getting worse and worse, and consumers lose confidence in it.

In October last year, former CEO Carlos Ghosn went to Wuhan, Hubei Province to announce the 2022 vision and plan for Renault platform. Dongfeng Renault will sell 400000 vehicles in 2022 and plans to introduce nine domestic models. Increase the number of dealers to 400. But with the downfall of Ghosn and the division of power among the top leaders of the alliance, dealers and consumers are skeptical whether this vision can still be realized.

According to the official introduction of Guangzhou Auto Fick, Guangzhou Auto Fick was established on March 9, 2010. it is jointly invested by Guangzhou Automobile Group Co., Ltd. (GAC GROUP) and Fiat Chrysler Group (Fick Group) with a share ratio of 50:50. The total investment is about 17 billion yuan. The company is headquartered in Hunan Changsha National Economic and technological Development Zone. At present, it has two vehicle factories, Changsha Factory and Guangzhou Factory, as well as an engine factory. The overall design production capacity of the whole vehicle has reached 328000, and the engine production capacity has reached 320000. There are 5000 employees.

Fiat Chrysler is also having a hard time in China, when Zheng Jie, president, left his job and was replaced by Max Trantini. He led his team to make Jeep the fastest-growing international brand in 2010-2015, but Zheng Jie's departure was related to Fick's 14-month decline in sales.

GAC Fick's annual sales in 2018 were 125181 vehicles, down 38.99% from the same period last year, a huge drop. In the first half of 2018, GAC Fick sold a total of 70278 vehicles, down 35.17% from the same period last year. From January to December 2018, GAC Fick's year-on-year sales have been showing a downward trend. In December last year, GAC Fick sales were 7744, down 40.80% from a year earlier; in 2019, from January to March 2019, cumulative sales were only 21706, down 41.32% from a year earlier, marking the 14th consecutive month of decline in GAC Fick sales.

Among them, the sales guide sold only 4830 vehicles in January 2019, down more than 34% from the same period in 2018, and only 3213 in March, less than half of the same period in 2018.

According to the data, GAC Fick still has a glorious history in the Chinese market. In 2016, GAC Fick sold nearly 180000 vehicles, an increase of 260% over the same period last year, which is about 15 times the overall growth rate of the passenger car market for the whole year. Among them, there are 142216 domestic models, an increase of 260% over the same period last year. Sales of the Jeep brand increased by 131% in 2016 compared with the same period last year, reaching an all-time high in China.

However, in 2018, problems with jeep models continue to emerge, and the quality of products has been repeatedly complained by consumers. Free light, compass and other models were also named by CCTV for burning engine oil. A number of complaints about oil leakage from the oil pan of the gearbox can also be found in the car quality network. in 2017, more than 20 new car owners defended their rights at the same time in Wuhan, Hubei Province. the problem of unified feedback is that there are obvious quality defects in Jeep free light, such as engine oil burning, transmission oil leakage, skylight leakage, central control abnormal noise, skylight abnormal noise and so on.

In spite of this, Fick is confident in JEEP. Last year, FCA unveiled a five-year plan to focus on Maserati, Alfa Romeo and Jeep, while domestic FCA bet on Jeep that Jeep will launch eight new or modified models in China by 2022, two of which are Chinese specialties. The two major brands of Fiat and Chrysler will be weakened.

There is no product optimization for domestic products, Fick's Free Light and Correa's two small SUV have received hot reviews overseas, but after entering the country, there is no optimization for domestic, the two models do not add air conditioning in the back row, and it is also a relatively rough assembly process for European models in terms of assembly.

The problem of customer feedback has not been solved, and the criticism of the two models is a common problem among European manufacturers, but there is no feedback in maintenance and follow-up, and the after-sales market work is not as good as that of Japanese and German manufacturers. And Fick even has the behavior of sales fraud.

The higher price positioning does not reflect the brand premium. Correa models are priced at the level of 139800 to 208800, but the drop is as low as 23000 to 123300. Models on both sides are priced higher than brands of the same class, but the actual driving experience is not as good as that of American and Korean competitors.

The two brands have high international popularity and prestige, and FCA has two major supercar brands and high-performance brands in the world. Renault is the earliest car manufacturer in France with a history of nearly a hundred years, and both sides have excellent brands and car-building experience; but in China, they take advantage of the quality of vehicles sold in the country. the performance of sales service and after-sales service is not satisfactory.

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