On December 24, the Beijing News Shell financial reporter learned from BYD officials that BYD and Daimler signed an equity transfer agreement on adjusting the structure of its joint venture Shenzhen Denza New Energy Automobile Co., Ltd. (hereinafter referred to as "Denza"), and after the completion of the transfer, BYD and Daimler will hold 90% and 10% of the equity of Denza respectively.
BYD officials said that the relevant matters are subject to the approval of the relevant regulatory authorities and are scheduled to be completed in mid-2022. In addition, the Denza brand will release a new model in 2022.
The following is the original text of the announcement:
BYD Automotive Industry Co., Ltd. (hereinafter referred to as "BYD") and its German partner Daimler Greater China Investment Co., Ltd. (hereinafter referred to as "Daimler") signed an equity transfer agreement on the adjustment of the structure of its joint venture Shenzhen Denza New Energy Automobile Co., Ltd. (hereinafter referred to as "Denza") to complete the equity transfer between the two parties in Denza. Upon completion of the transfer, BYD and Daimler will hold 90% and 10% 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. As a pioneer of new energy vehicles, Denza has achieved steady development with the joint efforts of both shareholders. BYD will give Denza greater support in operations to promote its future success. At the same time, Daimler will continue to support depressive development as a shareholder. BYD and Daimler will continue to advance their successful long-term partnership.
BYD and Daimler are committed to accelerating the development of the Denza brand in the fast-growing Chinese new energy vehicle market. The Denza brand will launch new models in the Chinese market in 2022 to further expand the market. The Denza brand operations team will ensure that it continues to provide relevant services to existing customers.
BYD and Daimler have a long-term cooperation in the Chinese market. In 2010, the two sides signed an agreement on the establishment of a 50:50 R&D technology joint venture "Shenzhen BYD Daimler New Technology Co., Ltd." to develop and produce new energy vehicles in China and For China. The joint venture launched a brand new model under the brand name "Denza", which is the first Sino-foreign joint venture in China to focus on new energy vehicles.
Since the launch of the first model, the Denza brand has won a good reputation among Chinese customers for its reliable and high-quality products. By jointly advancing the denza brand's business, BYD and Daimler gain valuable experience and a better understanding of customer needs in China, the world's largest and fastest-growing market for high-end new energy vehicles.
As one of the first enterprises in the world to clarify its new energy strategy, BYD has taken the lead in realizing the electrification layout in the "7+4" all-round transportation field, and the footprint of new energy vehicles has spread to more than 300 cities in 6 continents and more than 50 countries and regions around the world. BYD continues to lead the industry forward through leading technology, and has successively launched core technologies such as blade batteries, DM-i super hybrids, and e-platform 3.0 to promote the high-quality development of the industry. BYD has always adhered to the concept of openness and sharing, and together with international partners such as Daimler, it has promoted the transformation of the energy consumption structure in the global travel field and helped "cool the earth by 1°C".
In 2019, Daimler became one of the first car companies to announce a comprehensive carbon neutrality target, covering all aspects of the automotive value chain. In July 2021, Daimler announced that it will be fully prepared for "full electric power" by 2030, subject to market conditions. China plays a key role in Daimler's accelerated electrification strategy. As of 2021, Daimler has launched four Mercedes-EQ pure electric models in China, three of which are locally produced. Together with Chinese partners such as ATD, Daimler is confident in the growth potential of China's new energy vehicle market.
Fast entry under the combination of strong and powerful
Denza is now in a difficult situation
According to the public data of the Association, from January to March 2021, the cumulative production and sales of Denza X were 1169 vehicles and 1026 vehicles, respectively. Among them, the cumulative production of Denza X pure electric vehicle models is 0 units, the cumulative sales volume is 75 vehicles, and the sales volume in March is only single digits.
As a brand that has been placed high hopes by Daimler and BYD, Denza's production and sales are now dismal. What happened in the 11 years since its founding?
The hour hand is set back to March 1, 2010, and Stuttgart, the largest city in southwest Germany, ushered in the spring breeze and welcomed visitors from the East. BYD, an independent automobile brand from China, and German auto giant Daimler signed a memorandum of understanding in Stuttgart, and the two sides agreed to jointly invest in the creation of a high-end new energy vehicle brand - the DENZA Denza brand was born.
The cooperation between BYD and Daimler landed quickly, signing a memorandum of understanding in March of that year, and investing 300 million yuan each in July to settle a new company in Shenzhen. This year, China's new energy vehicle sales were only 7181; Li Bin, the founder of Weilai Automobile, was still interviewed as the founder of EasyCar; Tesla had just landed on the NASDAQ under the leadership of Musk...
Denza X pure electric SUV
Denza has also flashed. Launched in 2012 and officially launched in 2014, Denza relied on BYD's three-electric technology and Daimler's chassis tuning to be unique and rare in the mid-to-high-end new energy vehicle market at that time. Some old Denza owners told the Beijing News shell financial reporter: The driving experience of this car is very Mercedes-Benz, and the endurance is also very stable.
Denza, which hangs a water drop marker, can be said to be born with a golden spoon, and it has also been placed high hopes by BYD and Daimler. In an interview at the 2015 Shanghai Auto Show, BYD Chairman Wang Chuanfu publicly stated that BYD focuses on plug-in hybrids while Denza focuses on pure electric vehicles, and the two are not competitive. This report is still hanging on dentist official website to show BYD's strong support for Denza.
However, the sales of products with a price of nearly 300,000 yuan after this subsidy have not become popular in the market. According to public data, the total sales volume of the Denza brand in 2015-2019 exceeded 13,000 vehicles, with an average annual sales of 2,600 vehicles; the cumulative loss of the brand exceeded 3.5 billion yuan. In the past 5 years, BYD has completed the layout of the pure electric dynasty product matrix and opened the construction of the e-network; Mercedes-Benz plans to invest 10 billion yuan to build the EQ product matrix, and the first domestic product EQC is also officially listed at the end of 2019.
At the Shenzhen-Hong Kong-Macao Auto Show in June 2019, the Concept X concept car Concept X was officially unveiled, and in January of the following year, after BYD and Daimler injected 700 million yuan into Denza again, the registered capital of Shenzhen Denza New Energy Automobile Co., Ltd. increased from 5.06 billion yuan to 5.76 billion yuan. However, after the listing, Denza X failed to set off sales waves as desired.
Shell financial reporter noted that the official website news of Denza has not been updated since April 2020, when Denza's new energy products as a Mercedes-Benz brand were unveiled at the ice and snow test drive. According to public information, the main body of the Denza brand, Shenzhen Denza New Energy Automobile Co., Ltd., currently has 150 insured people and a total of 64 patents; compared with Nanjing Zhixing New Energy Automobile Technology Development Co., Ltd., the main body of Byton Automobile, which has been strategically reorganized, currently has 326 insured people and a total of 106 patents.
In view of the difficult situation faced by the company, which has been established for 11 years, the Beijing News Shell financial reporter also asked BYD and Beijing Benz for verification, asking about the reasons and product planning for the suspension of pure electric vehicle models. BYD said it was inconvenient to reply. Beijing Benz replied: "At present, our focus is to gradually improve the market performance of Denza X. In the future, the shareholders will continue to work closely together to develop the denza brand plan according to the needs of the market. ”
In February 2021, Daimler CEO Conlinson revealed the company's attitude towards the Denza brand in an interview, "The success of Denza's new crossover model (Denza X) will determine the future of this brand." "[Daimler]'s cash investment in Denza has been completed, and we will continue to watch how it develops before making a decision."
Actual exploration of 4S shops: few cars, difficult to sell, lack of people
Faced with operating losses, no updates to the official website for a year, and the suspension of the production of electric models, as a brand that entered the market in an era of rare competitors, what is the market situation of Denza today? The Beijing News shell financial reporter visited 3 Mercedes-Benz 4S stores in Beijing.
In 2019, Daimler and BYD jointly released Denza's new operating model: from July 1, 2019, Beijing Mercedes-Benz Sales Service Co., Ltd. will be officially responsible for the operation of some of Denza's businesses, including sales, marketing and brand communication, customer service, network development, etc. Since then, the publicity, sales and service of the Denza brand have basically been transferred to Beijing Benz, and BYD no longer sells Denza brand products, but is only responsible for the maintenance of old car owners.
Ms. Liu (pseudonym), a sales consultant of a Mercedes-Benz 4S store in the South Fourth Ring Road, told reporters: Denza X and Tang are collinear production, the exterior interior is designed by Mercedes-Benz, the three-electric system is provided by BYD, and the factory is located in Guangdong. At present, the pure electric version has indeed stopped production, there are 3 existing cars in the store, and the major 4S stores in Beijing may add up to just over three digits, and the terminal discount of the product can reach 80,000 yuan.
The reporter saw that there were many customers who came to and from the 4S store to see the car, but there was no one who paid attention to Denza. Ms. Liu said frankly that the current sales of denza X pure electric version are indeed not good, and it is a common phenomenon to sell seven or eight cars in a quarter. However, she said that on May 26, Beijing will release a new batch of electric vehicle indicators, and 2 car owners are already paying attention to Denza X because of the cost performance.
Wangfujing EQ series store
Located in the 2nd ring, a Mercedes-Benz EQ brand store specializing in new energy vehicles sales consultants told the Beijing News Shell financial reporter: "We are willing to invest resources in the EQ series, immediately EQA, EQB, EQS will be released, we do not intend to sell a denza X produced in common line with BYD." It is understood that the current owners of The Mercedes-Benz EQC can enjoy 3 years of repurchase, 6 years of free maintenance, a discount of more than 120,000 yuan, and the exclusive charging station of Mercedes-Benz pure electric owners, but Denza X owners cannot enjoy these benefits and services.
In a Mercedes-Benz 4S store in the East Fifth Ring Road, the attitude of the sales staff is relatively positive: "We only got denza X in the store last October, and the company seems to attach great importance to this car." I also just transferred from the fuel vehicle department, only yesterday finished product training, currently Mercedes-Benz only has a higher price EQC, Denza X can be used as a supplement in the product line. Regarding the current car and sales of Denza X, the salesperson said that there is a sufficient supply of cars in the store, with seven or eight groups of consumers coming to see the car every month, and about 10 new cars are sold in a quarter.
In the store one afternoon, the reporter did not see any customers walking to the vicinity of Denza X, and the security guard of the 4S store told reporters that the parking lot could not see several pure electric vehicles entering and leaving each week.
From the price point of view, as a former high-end brand product, the terminal price of Denza X pure electricity is about 260,000 yuan, compared with the BYD Tang EV, which costs nearly 300,000 yuan and has no discount, and the Mercedes-Benz EQC, which is still floating in the price range of 400,000 yuan after the price reduction, the high-end positioning of Denza is also slightly embarrassing.
Lack of change and difference will eventually decline
Is there a future for Denza?
The strong combination of BYD and Daimler once seized a favorable position in the market at the first time, but today, 11 years later, it is facing the dilemma of suspension of production and slow sales. Why did Denza get to this point?
In the view of Cui Dongshu, secretary general of the Passenger Car Market Information Joint Association, today's Denza brand is a portrayal of "strong and strong are not necessarily together, development and internal friction coexist". Although Denza is jointly funded by BYD and Daimler, it refers to high-end brands, but BYD's Dynasty series models have rushed to the high-end, the flagship sedan Han has sold more than 27,000 units in the first quarter of 2021; Daimler-Benz has launched EQC, EQA, EQB, EQS and other products from a blank sheet of electric vehicles at the beginning. However, Denza currently has only one model, which is the Denza X produced in collusion with BYD.
An analyst at a research institute believes that there are hidden concerns about the development of Denza: "First, although Denza belongs to the joint venture brand, the research and development is jointly completed by BYD and Daimler, which is different from the model of the joint venture car company to develop domestic production outside China. Second, the production of the Denza brand is completed by BYD, and the quality control level naturally does not reach the height of Daimler. Third, the marketing of the early brand was divided into franchise and associate, and the joint venture was a 4S store stationed in Beijing Benz, which was a marketing embarrassment. Fourth, the operation and operation of the early Denza brand was completed by BYD, and Daimler's original brand thinking was not better demonstrated. Although in the later stage, in order to save the slightly declining Denza, the brand was incorporated into the Beiben marketing system, but in the delicate relationship between Daimler, BAIC and BYD, it was basically doomed to debenciation. ”
Since the beginning of 2021, dextel X pure electric models or have been discontinued, the official website has not been updated for nearly a year, since the release of Denza X after the planning of the next generation of products has no news, while other companies have launched new products to compete in the market. Zhang Hong, Secretary-General of the New Energy Vehicle Branch of the China Automobile Dealers Association, said: "In the new energy vehicle market, difference may be the key to whether brand cars can run far. No matter how noble your pedigree is, no matter how powerful your blood transfusion function is, and no matter how many fresh concepts you inject into a model, there is no difference, just the continuation of the old brand technology, just like people have no soul, and eventually pioneers can only become martyrs. ”
Analysts from the above-mentioned research institutions also mentioned that today's Denza cannot be directly judged by success or failure. The Denza brand established 11 years ago can be seen as an attempt to electrify Mercedes-Benz and bydier's high-end, and the high-end positioning of this brand in the market structure before 2018 was very successful, but after 2018, it did not keep up with the wave of electrification in which the connotation and logic are undergoing great changes.
"For industrial transformation, enterprises must experience pain, some companies must try, but also must sum up the lessons of predecessors, I think BYD and Daimler should have found the answer they want." The analyst said.
The official website has been suspended for more than a year, no new product releases have been released for two years, the monthly sales are dismal, coupled with the success of Daimler's head "Denza's newly launched cross-border model (Denza X), which will determine the future of this brand" and "(Daimler)'s cash investment in Denza has been completed, and we will continue to observe its development before making a decision", it is not difficult to see the clues: If Denza X cannot succeed in the foreseeable future, Mercedes-Benz, which will no longer invest cash, will decide whether the brand has a future.
Written | Beijing News shell financial reporter Bai Haotian
Edit | Song Yuting