The author | Wang Yunpeng
The source | Auto Grand view
A few days ago, Kia revealed that it plans to announce the name of the new company under the new share ratio structure on the eve of the Beijing Auto Show in April this year.
In this regard, the industry speculated that the new company name may be "Yueda Kia" and "Kia China". However, the above speculation has not been confirmed by Kia.
In fact, Kia's name change in China was already a real hammer thing when Dongfeng Motor announced its withdrawal from Dongfeng Yueda Kia. On November 19, 2021, Dongfeng Motor Group Co., Ltd. publicly listed its 25% stake in Dongfeng Yueda Kia Automobile Co., Ltd. through the Shanghai United Assets and Equity Exchange at a listing price of 297 million yuan.
On December 17 of the same year, the above-mentioned equity transaction information was delisted, and then Yueda Investment issued an announcement that Yueda Automobile Group was the only bidder for this part of the equity. Therefore, after the completion of this part of the equity transfer, the shareholding structure of Dongfeng Yueda Kia Company will be held by Kia Co., Ltd. (hereinafter referred to as Kia), Yueda Investment and Yueda Automobile Group, with the shareholding ratios of 50%, 25% and 25% respectively.
In addition, according to Kia, with the completion of the company's name change, it will further build high-quality products, and will gradually stop production of models below 100,000 yuan in the Chinese market, accelerate the introduction of more competitive global models, and will introduce at least 1 electric vehicle per year. It is reported that the models currently on sale at Kia below 100,000 yuan include three models: Edu, Huanchi and Freddy.
It's really time for a shift
Turn the clock back 20 years. At that time, in order to make the project land smoothly, Yueda Group, which had no production qualifications, found Dongfeng Motor, and Dongfeng Motor obtained 25% of the shares of the joint venture company with its production qualifications.
In this way, a joint venture company formed by Dongfeng and Jiangsu Yueda and South Korea's Kia was established. Under the joint venture model of two-by-two pairs at that time, the equity structure of this three-party joint venture seemed to be somewhat non-mainstream.
Although the shareholding structure is somewhat different, this has not affected the previous performance of Dongfeng Yueda Kia. According to public information, in 2008, Dongfeng Yueda Kia's business was officially on the right track, with sales of less than 100,000 vehicles that year, but from 2014 to 2016, its sales reached 646,000 units, 616,000 units, and 650,000 units, respectively. In particular, in 2016, the sales volume of 650,000 vehicles made Dongfeng Yueda Kia rank eleventh in the sales ranking of Chinese passenger car companies that year.
However, the impressive results did not last long. Since 2017, Dongfeng Yueda Kia has embarked on a downward spiral. According to the data, from 2017 to 2020, its sales were 359,000 units, 370,000 units, 289,800 units, and 249,000 units, respectively, while in the past 2021, the cumulative sales volume was only 152,000 units.
With the continuous decline in sales, Dongfeng Yueda Kia's production capacity in China began to be significantly overcapacitated, and its operating performance was also deteriorating. According to its financial report, from 2017 to the first half of 2021, the net loss of Dongfeng Yueda Kia was 1.123 billion yuan, 492 million yuan, 1.299 billion yuan, 4.75 billion yuan and 1.371 billion yuan, respectively, and the cumulative loss reached 9.035 billion yuan in four and a half years. The poor financial performance for many years has also become an important inducement for Dongfeng Motor to withdraw its shares.
"Dongfeng will have to withdraw sooner or later, when the three-party joint venture was launched, Dongfeng did not contribute capital, but used production qualifications in exchange for 25% of the shares, and then Dongfeng once wanted to expand its equity to make its income, but Yueda Investment did not agree, Dongfeng's voice in the joint venture company is not high, and resource investment is naturally not active." Some industry analysts said.
Why did the former star of the car market fade in such a short period of time? There are many reasons behind this, one of the more important points is that it is affected by the low-end positioning of the product. Looking back at Kia's best-selling K2, K3, Sportage, Smart Running and other models, almost all of them take the low-price route, but this practice is doomed to its products and new technologies, new platforms, new shapes. In this way, it is inevitable that Kia will not catch up with the mainstream situation on the road of "new four modernizations".
In the author's opinion, as a joint venture brand, Kia is difficult to match its own brand by making low-end and cost-effective models under the main theme of the transformation and transformation of China's automobile market. Faced with this situation, it is time for Kia to make a change.
In other words, how to get rid of the label of "cost performance", no longer take the route of low-price competition, and use product strength to win the recognition of consumers is a problem that Kia urgently needs to solve.
In this regard, Kia said: "In the future, it will comprehensively enhance its brand image from the aspects of 'product quality, providing better choices for Chinese users', strengthening brand building, strengthening the marketing of the target group of the MZ generation, penetrating into the young circle, and continuously promoting the brand upwards", "more closely combining with China's actual situation, paying more attention to the needs of Chinese consumers, increasing investment in technology research and development in the Chinese market, and developing more products and technologies that meet the expectations of Chinese consumers'" to comprehensively enhance the brand image." ”
Can Kia take control of her own destiny?
In fact, Dongfeng Motor's exit is only a "small thing", for Kia, whether it can take its fate in its own hands in the Chinese market is the most critical.
In the future, where Kia will go in China is a question worth exploring. But whatever the outcome, Kia today must play the spirit of twelve points. Because the market share has been as low as poor Kia, it is currently and in the future it will face the "encirclement and suppression" of various mainstream brands.
Specifically, electrification and intelligence have become the biggest features of China's automotive market. In the new energy track, new car-making forces, independent brands, mainstream Japanese brands and German brands have been or are in a strong position. In terms of intelligence, the advantages of independent brands and new car-making forces are needless to say.
In contrast, the current Kia does not have a clear product and industrial advantage on these two tracks. Just take the new energy track as an example. Leaving aside the new power brands that are soaring in the field of pure electric power, the traditional forces of Chinese brands, such as BYD's DM-i, Chery and Great Wall's DHT, Geely's Thor hybrid technology, etc., may be enough for Kia to catch up for a while.
Of course, Kia was not intimidated by the difficulties. From the current situation, in addition to playing a set of "rebranding the brand image" combination punch in 2021, Kia will also accelerate the pace of "brand upward" this year by creating high-quality products and introducing more competitive global models.
In terms of products, according to the information disclosed by Kia, it will launch a new flagship SUV Sportage and K3 mid-term modification model; in terms of new energy, in addition to the introduction of Sportage's HEV hybrid model to reshape Kia's technical image, it is also planned to introduce a new electric vehicle every year from the end of this year or the beginning of 2023.
At the same time, Kia also said that it will absorb local talents, expand local research and development investment, and optimize dealer management and operation as important tasks in the future.
Although full of confidence, it cannot be ignored that after Kia's above-mentioned new energy models enter China, the space left for them by the market or how much space is still unknown.
In addition, judging from the sales of models such as Smart Run, Proud Run, and K5 in 2021, Kia's brand high-end route may not be easy to go. Because the above models do not have much advantage in terms of sales and market share at present.
At the same time, with the rise of mainstream independent brands, especially their gradual leadership in the field of intelligence and new energy, it may bring a lot of pressure to Kia, which is trying to soar the brand.
For how to face the problem of being on the same track with independent brands again, Kia said that the new K5, smart running Ace, the fourth generation of Jawa and other models have initially changed the perception of Kia brands in the hearts of Chinese consumers, and the Chinese auto market is large and has broad prospects, independent brands are also laying out high-end, pursuing brand upwards, Kia hopes to work with more companies to make the market bigger, and provide users with more car products and services worth looking forward to.
"In 2022, with the establishment of the new joint venture, Kia will re-set sail in China as a new power startup. Based on the Turn-around strategy and "All New Kia, All New Start!" "With its business policy, Kia will organically combine global products and Chinese consumer needs, innovate more differentiated marketing activities and service experiences, enhance brand experience, and hope to achieve a leap from quantitative change to qualitative change in the Development of the Chinese Market." When it comes to expectations for the future, Kia said so.