After losing the "Dongfeng", Yueda Kia opened a new era of joint ventures. On February 7, Kia and Yueda signed an expansion investment agreement, the two sides intend to form a new joint venture, planning to increase the capital of 900 million US dollars, but the new company name, the two sides of the equity ratio has not yet been announced, Kia will focus on promoting the introduction of global strategic models and new energy vehicles. Yueda Kia began to "Dongfeng" and reshape the brand image.
As we all know, with the official announcement of the completion of the 25% equity project of Dongfeng Yueda Kia on December 22, 2021, Yueda Automobile Group is the only bidder, announcing that Dongfeng Company officially bid farewell to Yueda Kia. At the end of the joint venture share ratio limit, the road to joint venture between Kia and Yueda is full of variables.
This time, Kia signed an expansion investment agreement with Yueda, promising to rapidly increase vehicle sales and capacity utilization rates by expanding investment, introducing new models, developing new energy vehicles, and setting up export bases.
20 years of ups and downs, the reason why Dongfeng Yueda Kia has finally dispersed is inseparable from the decline in sales and poor profit performance. From the initial sales of 20,000, all the way to 650,000 vehicles in 2016, dongfeng Yueda Kia sales have taken a sharp turn. Total sales in 2021 were only 152,000 units, which has been declining for five consecutive years.
With the decline in sales, in the first half of 2017-2021, the net losses of Dongfeng Yueda Kia were 1.123 billion yuan, 492 million yuan, 1.299 billion yuan, 4.75 billion yuan and 1.371 billion yuan, respectively, with a cumulative loss of more than 9.035 billion yuan in five years. It should be known that in 2014, the net profit of Dongfeng Yueda Kia has reached 4.271 billion yuan, and the continuous loss has made Dongfeng completely lose patience.
When Dongfeng announced its withdrawal, it coincided with the official relaxation of the restrictions on the foreign ownership ratio of passenger cars in 2022, and many voices in the industry believed that with the help of favorable time and place, Kia may be granted 25% of the equity held by Dongfeng Company to achieve share expansion, so as to have more right to speak. But until now, the two sides have not reached an agreement.
Liu Changsheng, general manager of Dongfeng Yueda Kia, once revealed that in the future, Kia will gradually stop production of models below 100,000 yuan in China and accelerate the introduction of more competitive global models. At the same time, the first year of electrification will be launched in 2022, and at least one electric vehicle will be introduced every year. From next year to 2027, starting from the new pure electric vehicle EV6, Kia will launch a new electric model in the Chinese market every year, gradually building a new EV matrix of six electric vehicles.
For the future plan, the new joint venture company will build a new organizational structure, establish an innovative organizational culture, actively introduce local talents and professionals, and accelerate the localization work. In January this year, Zhang Zhenglin, deputy general manager of Yueda Investment, resigned from the board of directors due to job changes.
At the same time, the new joint venture will also achieve win-win cooperation with Chinese dealer partners by formulating reasonable operating indicators, continuously optimizing business policies, and rewarding excellent dealers. The Yancheng government will fully support Kia's expansion of sales in the Chinese market and support the export trade of Kia's Yancheng plant to help Kia's development in China.
From changan Suzuki's withdrawal from the Chinese market in 2018, to the successive withdrawals of Dongfeng Renault and others, as well as the changes of Dongfeng Yueda Kia, all of which show that the period of joint venture car companies enjoying the dividends of the Chinese automobile market has passed, and many automobile brands are hovering on the verge of reshuffling and elimination. At the same time, under the general trend of automobile electrification and intelligence, independent brands have taken the lead, and consumers are no longer obsessed with joint venture brands when choosing cars.
Where misfortune and blessing depend, where blessings and misfortunes lie. Therefore, winning the large share ratio of the new joint venture company may not be a fortunate thing for Kia, and it is likely to be a "hot potato". Over the next decade, total production and sales in China will exceed 4 million units, which is a bit aggressive for a car company that sold 150,000 vehicles last year.