Renault Brilliance (that is, Renault Brilliance Jinbei Automobile Co., Ltd.), which has been in the whirlpool of public opinion, has not been able to reverse the final fate.
On December 30, according to the National Enterprise Bankruptcy and Reorganization Case Information Network, the Shenyang Intermediate People's Court received the bankruptcy reorganization application submitted by Renault Brilliance. This means that the joint venture between Renault Group and Brilliance Group will come to an end.
According to the China Automobile Association, in the first 11 months of 2021, domestic commercial vehicle production and sales reached 4.293 million units and 4.429 million units, respectively, down 9.1% and 5.3% year-on-year, respectively. The light passenger market in which Renault Brilliance is located has staged a "three-consecutive decline" since September this year, of which the decline in November reached 12.9%.
At the same time, with the advancement of the "new four modernizations" trend of the automotive industry, the transformation to electrification, digitalization and other fields has also become a consensus, and the competition between commercial vehicle brands has become increasingly fierce, and "rising stars" continue to emerge. For example, from January to November this year, the cumulative sales of Foton Automobile light buses have reached nearly 40,000 units, an increase of 15.85% year-on-year. In contrast, in the whole of 2020, Renault Brilliance sold only about 23,000 units.
In this context, sticking to the fuel-light commercial vehicle market is undoubtedly a difficult challenge for Renault Brilliance. Changes in the external environment, such as the recurrence of the new crown epidemic, the shortage of chip supply and the rise in raw material prices, may become the last straw that crushes Renault Brilliance.
Both shareholders worked together to save it
Looking back at the four-year history of the joint venture, Renault Brilliance has not been very smooth all the way. Pulling back the time to December 2017, after a year and a half of negotiations, Brilliance China and Renault Group formally signed a contract to form a joint venture company Renault Brilliance, which plans to produce and sell light commercial vehicles under the three brands of Jinbei, Renault and Huasong.
At that time, Brilliance Jinbei (i.e. Shenyang Brilliance Jinbei Automobile Co., Ltd.), founded in 1989, was facing huge losses, with accumulated debt of more than 1 billion yuan. Therefore, Brilliance Group sold 49% of the equity of Brilliance Jinbei to Renault Group for 1 yuan, hoping that the two sides would invest further 1.5 billion yuan in the future to achieve a turnaround in the light passenger business.
But since then, Renault Brilliance's development has not been as good as expected. Since 2018, Renault Brilliance's sales have declined year by year, to just over 23,000 units by 2020. Prior to this, the number of Jinbei buses in the market exceeded 1 million, making it the first brand of light passengers in China, ranking first in the sales volume of China's commercial vehicle market for 19 consecutive years.
Industry analysts believe that Brilliance Group's poor management and high bonds may be one of the reasons that led Brilliance Renault to bankruptcy. According to the information disclosed at the second creditors' meeting, as of August 13, 2021, the total amount of expected liabilities of 12 enterprises, including Brilliance Group, is 61.984 billion yuan. In this context, it is difficult for Brilliance Group to provide financial and other support for Renault Brilliance.
Cui Dongshu, secretary general of the National Passenger Car Market Information Joint Association, believes that Renault Brilliance originally had a good foundation, and Jinbei Automobile (Light Passenger) was once in the leading position. However, the follow-up did not strengthen independent technology research and development to ensure the continuous improvement of product strength, but reacted passively in the face of regulations and fierce competition, and finally had today's dilemma.
In fact, in the face of difficulties, both shareholders have also invested a lot of energy to adjust and optimize Renault Brilliance from the aspects of strategy, marketing and sales. In June 2020, Renault Brilliance began implementing a transformation plan to establish a lean customer- and market-oriented organizational structure, further develop its business and dealer network, and continue to introduce new products every year.
The above-mentioned transformation plan has also achieved practical results, and Renault Brilliance's profitability has achieved structural recovery and steady improvement. Public data shows that in 2020, Jinbei models accounted for 22% of the market share in the M-Van (medium-sized van) segment, and the profit of bicycles achieved a turnaround. More importantly, through the savings of fixed costs, Renault Brilliance has increased its operating efficiency by 35%.
In addition to the recovery of business capabilities, Renault Brilliance's product strength is also rising. According to statistics, the number of problems per 100 vehicles of Renault Brilliance has dropped by 5 percentage points compared with 2018, and customer satisfaction has reached a new high in recent years. In addition, Renault Brilliance's after-sales service satisfaction index and sales satisfaction index also increased by 5.3% and 5.7% respectively compared with 2018.
"China is one of Renault's key markets"
Despite the efforts of both shareholders, it was not possible to bring Renault Brilliance back to the track. After Renault Brilliance "folded the sand", The situation of Renault Group in the Chinese market has also attracted much attention.
"If an automobile company lacks the Chinese market, it is equivalent to a table without table legs." When it comes to the Chinese market, Luca de Meo, CEO of Renault Group, has repeatedly expressed the importance it attaches.
That is why, within the framework of Renaulution, Renault places China in a very important position. Renault said it will reshape its business model in China, leveraging its assets in China and developing new mobility solutions for China and the global market with the help of China's competitive industrial ecosystem.
At present, Renault Group is developing local brand products in China through the joint venture company EasyJet New Energy Automobile Co., Ltd. and Jiangling Group New Energy Automobile Co., Ltd. (i.e. Renault Jiangling Group). Since December 2020, Renault group has been exporting electric vehicles from China to Europe. According to the latest data, from March to October 2021 alone, the order volume exceeded 40,000 vehicles, and in September this year, its export volume ranked first in China's electric vehicle export list. Renault Jiangling Group's newly listed electric vehicle model Yi also has a good market performance.
While promoting its main business, Renault Group is also strengthening its cooperation with local Chinese companies. In August 2021, Renault Announced the signing of a Memorandum of Understanding (MoU) with Geely Holding Group for an innovative partnership. The two sides will target the hybrid market and share resources and technology.
The industry believes that the cooperation between the two sides will be reflected in Geely Holding Group's strategy of opening up its vehicle structure, and will also accelerate the landing of Renault Group's "Renaulution Plan" in the above two markets.
Not broken, not standing, not only can't do it. Now, 2021 is coming to an end, Renault Brilliance dust has landed, leaving the burden and lightly packing Renault Group, what new actions will be made in the Chinese market? Let's wait and see.