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According to the previous, due to the decline in sales, Dongfeng Yueda Kia decided to stop production of a factory. Since the beginning of the year, Kia Motors has considered shutting down a factory in the Chinese market, restructuring its business to save itself and cope with a sharp drop in sales. Dongfeng Yueda Kia's first plant in Yancheng, Jiangsu Province, will stop production at the end of this month.

Dongfeng Yueda Kia responded, did not close, is structural adjustment. The factory plan will be dedicated to the production of new energy vehicles to build a green new energy factory in an intelligent manufacturing way.

According to Dongfeng Yueda Kia Automobile Co., Ltd. internal personnel said: "A factory has not been closed, but a factory is now rationalized." Based on the promotion policy of Yancheng new energy vehicles, the strategic choice of common growth of driverless intelligent urban infrastructure and low-lying plates. At present, the promotion of new energy vehicles is under way, and some of the employees will temporarily work in Factory 2 or Factory 3.“

Dongfeng Yueda Kia also presented a "Description on Rationalization of Structure Adjustment of No.1 Factory of our Company," which stated that the structure rationalization adjustment of Dongfeng Yueda Kia No.1 Factory was carried out through the agreement of Dongfeng Yueda Kia shareholders.

In addition, the explanation also states that on June 16,2019, Yueda Group, Dongfeng Yueda Kia and Chinese Express have carried out equity cooperation to lease Dongfeng Yueda Kia No.1 Factory to Chinese Express for a long time. Realize the reasonable distribution of Dongfeng Yueda Kia production capacity and further improve the efficiency of the industrial chain.

After Dongfeng Yueda Kia No.1 Factory stops production, it will be upgraded and reconstructed in the form of "long-term lease" to lease to the new force of Chinese Express to produce new energy vehicles, which can not only collect part of the rental fee, but also solve the problem of idle capacity. The factory is expected to complete the renovation and mass production sales in the first half of 2021.

For the production change, Dongfeng Yueda Kia did not make a positive response. It means that it cannot be verified temporarily, but it can guarantee that the vehicle will not be affected, and the after-sales service and warranty can be serviced normally.

Due to the continuous decline in sales volume, the current idle capacity situation is indeed very serious. The annual production capacity of the second and third factories is 300,000 and 450,000 respectively. Together with the first factory, the total annual production capacity is 900,000. According to the data of the National Passenger Car Market Information Joint Conference, in 2018, Dongfeng Yueda Kia accumulated sales of about 370,000 vehicles and output of 362,000 vehicles, which means that Dongfeng Yueda Kia's current capacity utilization rate is only about 40%.

In the face of such a situation, Dongfeng Yueda Kia is actually adjusting. At the product level, Dongfeng Yueda Kia plans to launch 5 brand-new models such as the new KX5 and the brand-new K3 this year, hoping to drive overall sales growth with new products. On the sales target, Dongfeng Yueda Kia has also been lowered accordingly, with a planned sales of 410,000 vehicles for the whole year, 90,000 fewer than the target of 500,000 vehicles in 2018.

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