Dongfeng exited Yueda to take over, how to reverse the decline after Dongfeng Yueda Kia "scattered"?

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In less than two months, the dust has settled on the equity change of Dongfeng Yueda Kia.

On the evening of December 22, Jiangsu Yueda Investment Co., Ltd. (hereinafter referred to as "Yueda Investment") announced that Yueda Investment has passed a proposal on waiving the limited right of transfer and forming a joint investment with related parties. According to the announcement of the proposal issued by Yueda Investment, Jiangsu Yueda Automobile Group Co., Ltd. (hereinafter referred to as "Yueda Group") delisted Dongfeng Motor Group Co., Ltd. (hereinafter referred to as "Dongfeng Group") transferred 25% of the equity of Dongfeng Yueda Kia.

After the completion of the transaction, Dongfeng Group will no longer hold the equity of Dongfeng Yueda Kia, and the shareholder structure of Dongfeng Yueda Kia will also change from three parties to two parties, Yueda Group and Yueda Investment are the same actual controllers, and the total holding of 50% of the equity of "Yueda Kia" and the same equity held by South Korea's Kia Motors. With the withdrawal of Dongfeng Company and the era of equal equity of the shareholders of the two parties, how the two sides pulled "Yueda Kia" out of the quagmire became the focus.

Sales continued to decline, with losses of more than $4.7 billion and $13.6 billion in liabilities last year

Dongfeng Yueda Kia was established in 2002 as a tripartite joint venture between Dongfeng Group, Jiangsu Yueda Investment and South Korea Kia Co., Ltd., of which Dongfeng Group and Jiangsu Yueda Investment each hold 25% of the shares, and Kia holds 50% of the shares. However, it is worth noting that although Dongfeng Group holds 25% of the equity of Dongfeng Yueda Kia, Dongfeng Group has said that Dongfeng Group has not substantively participated in the daily operation of Dongfeng Yueda Kia, and is more to provide it with car manufacturing qualifications. There are also views in the industry that Dongfeng Yueda Kia is only a shareholding enterprise of Dongfeng Group in more sense, and the daily management is mainly Based on Koreans.

In fact, the news about Dongfeng Group's withdrawal from Dongfeng Yueda Kia began in August this year, when it was reported that the three shareholders of Dongfeng Yueda Kia had signed a memorandum of withdrawal on Dongfeng Group's withdrawal from Dongfeng Yueda Kia. In November, it was reported that Dongfeng Group would transfer its 25% stake in Dongfeng Yueda Kia as soon as November, when it was reported that the takeover party or South Korean Kia Automobile was the takeover party.

On November 19, Dongfeng Motor was listed on the Shanghai United Assets and Equity Exchange to transfer its 25% stake in Dongfeng Yueda Kia at a listing transfer price of 297 million yuan, and the listing period was until December 16, confirming the previous rumors. At the end of the listing, Yueda Group was the only bidder. Yueda Investment said that as a shareholder of Dongfeng Yueda Kia, considering its subsequent capital increase needs and the company's own operating conditions, it gave up the right of first refusal of the equity transfer; and Yueda Automobile Group became a shareholder of Dongfeng Yueda Kia, which is conducive to stabilizing the company's equity structure and cooperative relationship. It is reported that Yueda Group, the controlling shareholder of Yueda Investment, holds 70% of the equity of Yueda Automobile Group.

If the total equity of Yueda Group and Yueda Investment as the same actual controller is not calculated, after the completion of this equity transfer, the equity situation of "Yueda Kia" is 50%, 25% and 25% of the shares held by Kia Automobile, Yueda Group and Yueda Investment. Dongfeng Yueda Kia said that it is negotiating with Yueda on the future share ratio and expects to announce the results in April next year.

The industry believes that Dongfeng Group's withdrawal from Dongfeng Yueda Kia is, on the one hand, the operating life of Dongfeng Yueda Kia is until September 11, 2022, which is less than 1 year from the expiration of the joint venture; on the other hand, it is also related to the poor development of Dongfeng Yueda Kia itself.

Judging from the sales data released by Dongfeng Yueda Kia in recent years, after reaching a peak of 650,000 vehicle sales in 2016, Dongfeng Yueda Kia began to decline. Sales shrank to 359,500 units in 2017, nearly slashing compared to the peak in 2016; sales rebounded slightly to 370,000 units in 2018, but fell further into a downturn in 2019, with sales of 289,800 units in that year and sales continuing to fall to 249,000 units in 2020; Dongfeng Yueda Kia sold 137,900 units in the first 11 months of this year. Affected by the continuous decline in sales, there was idle production capacity, and in 2019, Dongfeng Yueda Kia upgraded a factory and produced the first model of Huaren Express, Gaohe HiPhi 1.

Ren Wanfu, an analyst in the automotive industry, said that with the improvement of the competitiveness of its own brands, Dongfeng Yueda Kia has lost its advantage in the market of 100,000 yuan. In addition, the industry believes that the decline in sales of Dongfeng Yueda Kia is related to the poor performance of Korean cars in the Chinese auto market. Since 2017, the market share of Korean cars in the domestic car market has continued to decline, and the market share of Korean cars in 2017 has dropped from 7.35% in 2016 to 4.63%; the market share of Korean cars in the domestic automobile market in the first 11 months of this year is only 2.4%.

The "high platform diving" of sales volume directly affects performance. According to the information disclosed by Dongfeng Group when it was listed on the Shanghai United Assets and Equity Exchange, in 2020, Dongfeng Yueda Kia achieved operating income of 21.94 billion yuan, net loss of 4.75 billion yuan and liabilities of 13.656 billion yuan; in the first 10 months of this year, Dongfeng Yueda Kia achieved operating income of 12.477 billion yuan, net loss of 2.612 billion yuan, and total liabilities of 11.887 billion yuan. The reporter found through combing the financial report of Yueda Investment that the performance of Dongfeng Yueda Kia began to decline continuously in 2017, with a total loss of 9.035 billion yuan in less than 5 years.

Three parties become two sides, how to explore the way to reverse the decline

When it was rumored that Dongfeng Group wanted to transfer Dongfeng Yueda Kia, the industry speculated that South Korean Kia would take over. On the one hand, the domestic auto market will actively achieve the relaxation of the passenger car joint venture share ratio in 2022, on the other hand, at the strategy conference in April this year, Hyundai Kia Group said that China is one of the most important markets in the world and will continue to increase its support for the Chinese market, and the industry believes that Kia intends to seek a greater voice in the development of China.

In addition, in March this year, Li Feng, the only Chinese CEO of Dongfeng Yueda Kia, who has been in office for one and a half years, left office, and Liu Changsheng, the headquarters of Kia Motors in Korea, took over, which is also considered to be a sign that South Korean Kia Motors intends to take over the equity of Dongfeng Yueda Kia transferred by Dongfeng Group. However, it turned out that South Korean Kia did not increase its holdings, but chose to equal the equity of Yueda. Ren Wanfu believes that "in fact, as the main body of product import and research and development, even if the three shareholders become two parties and the equity is divided equally, Korean Kia still has a higher right to speak." The change in equity will also benefit Kia's joint venture in China. ”

However, at present, for "Yueda Kia", what is more important is how to achieve a return to the track. In September last year, Dongfeng Yueda Kia relied on Kia's global 'Plan S' strategy to release the strategic direction and development blueprint for the new decade to accelerate transformation and upgrading and return to the mainstream track. According to the plan, in 2022, Dongfeng Yueda Kia will launch two remodeled models and a new SUV model; in the future, it will launch a hybrid version for existing models and launch a global electric vehicle to strengthen the high-end positioning of the Kia brand from multiple channels.

This year, Liu Changsheng once again released a new strategy after taking office, saying that the Kia brand should abandon the cost-effective label, take the high-end route, continue to invest in new products and new technologies, reduce the inventory pressure of dealers, make dealers profitable, and gain consumer recognition. According to Kia's plan, it will accelerate the production of low-end entry-level models of less than 100,000 yuan in the Chinese market next year and seek high-quality development; in addition, it will also accelerate the introduction of hybrid and pure electric models, and launch a new electric vehicle every year from the end of 2022 or the beginning of 2023.

However, for Kia to take the high-end route in China, the industry generally believes that it is more difficult. On the one hand, independent brands have continued to exert efforts in the high-end market in recent years, and new car-making forces are also aiming at the high-end electrification market; on the other hand, luxury brand models are exploring, and the mainstream joint ventures of one fund and luxury car brands are also accelerating the electrification transformation, "In the field of traditional fuel vehicles, the price of luxury vehicles has been explored, and the competition is more intense; in the new energy vehicle market, the domestic high-end electrification trend is obvious, and Kia wants to achieve great challenges in the high-end market, while in the past, Dongfeng Yueda Kia has formed the impression of cost-effective advantage and weak brand premium ability The brand value and influence are not strong, and it is difficult to change. ”

Beijing News reporter Wang Linlin

Edited by Wang Jinyu Proofread by Lucy