Denza struggled for ten years and finally "returned" to BYD Daimler to retain only 10% of the shares

On December 24, BYD and Daimler jointly announced that the two sides have signed an equity transfer agreement on adjusting the structure of Shenzhen Denza New Energy Automobile Co., Ltd. (hereinafter referred to as "Denza") and intend to complete the equity transfer of the two parties in Denza. Upon completion of the transfer, Daimler and BYD will hold 10% and 90% of Denza's shares, respectively. The matter is subject to the approval of the relevant regulatory authorities and is scheduled to be completed by mid-2022.

It is worth noting that on the day of reaching the above-mentioned equity transfer agreement, BYD also issued an announcement that the company's board of directors has considered and approved its holding subsidiaries BYD Automobile Industry and Daimler to increase the capital of Denza by 1 billion yuan in a monetary manner.

Denza is a joint venture between BYD and Daimler, established in 2010, each holding 50% of the shares, and its main business includes the design and research and development of passenger cars and electric vehicles. As the first Sino-foreign joint venture in China to focus on new energy vehicle business, Denza has launched a new model under the brand name of "Denza".

For this equity adjustment, Daimler said that by jointly promoting the business development of the Denza brand, Daimler and BYD have gained valuable experience in China's high-end new energy vehicle market and better understood customer needs. At the same time, Daimler and BYD have established a solid partnership of mutual trust, and will jointly plan for the future development of Denza and make rapid decisions to better capture market opportunities.

After this adjustment, debenzia's development will be led by BYD. Daimler said BYD will give deforestation greater operational support to promote its future success. At the same time, Daimler will continue to support depressive development as a shareholder. Daimler and BYD will also continue to promote their long-term partnership in terms of battery supply.

BYD relevant people also told the Economic Observer Network reporter that in the future, BYD will pour more resources and core technologies into the Denza business, and work with Daimler to promote the better and faster development of the Denza brand. At the same time, the two sides will further deepen the cooperative partnership and expand the scope of cooperation. In 2022, the Denza brand will launch new models in the Chinese market to further develop the market.

At present, denza has only one denza X model on sale, which is mainly provided by Mercedes-Benz dealers for sales and after-sales service. Auto analyst Li Yanwei publicly commented that Daimler and BYD adjusted dextil's equity, which means that dextile's only model will be adjusted out of the Mercedes-Benz dealer channel.

Bai Yiyang, manager of the research department of CMB International and an analyst in the automotive industry, said that Daimler's share ratio fell to 10%, which should not be regarded as a signal that the cooperation between Daimler and BYD has cooled down or even come to an end. Denza's development in the past few years is indeed not particularly ideal, but in the future, the two sides should continue to cooperate in other fields such as batteries and semiconductors.

According to the data, Denza's cumulative sales from 2015 to 2019 are only 13,800 vehicles. In 2020, Denza's sales volume was only 4175 units, which was less than the monthly sales of many hot-selling electric models. In addition to unsatisfactory sales, Denza's profit situation is not optimistic. ACCORDING TOD's announcement, from 2017 to 2019, the investment income recognized by Denza under the equity method was -232 million yuan, -475 million yuan and -539 million yuan, respectively, and the loss showed an expanding trend.

Compared with the equity adjustment, this round of capital increase between the shareholders is more like a "prescriptive action" that follows the usual practice. In order to support the development of Denza, BYD and Daimler will increase Denza's capital at least one round every year in recent years. In May 2017, May 2018, February 2019, May 2019 and January 2020, BYD and Daimler increased their capital by 1 billion yuan, 800 million yuan, 400 million yuan, 300 million yuan and 350 million yuan respectively, and Denza has received more than 5 billion yuan in "blood transfusions".

"This (equity) change should be led by BYD. From Daimler's point of view, it already has two partners in China, Geely and BAIC, and has not invested a lot of resources in the Denza brand in the past few years. From BYD's point of view, bydir brand itself positioned in the middle, the ocean series is mainly still running volume, the future will push a luxury high-end brand, BYD may still want to make Denza into a high-end such a positioning. Bai Yiyang said.

It is understood that in 2022, BYD will launch an unprecedented high-end brand. The high-end brand price range is expected to be more than 500,000-1 million yuan, in terms of brand, product, sales and service network, operation team, are new and independent, the first model is a hardcore off-road vehicle. In the future, BYD's automotive business will be composed of four sections: Dynasty.com, Ocean.com, Denza and high-end brands.