Text | Joey
Yesterday, South Korea's Kia Co., Ltd. officially signed a contract with the Yancheng People's Government and Jiangsu Yueda Group, Yueda Group will establish a new joint venture with Kia, planning to increase capital by 900 million US dollars, further expand investment, introduce new models, develop new energy vehicles, and the name of the new joint venture company will be announced in April this year.
This bodes well for Kia in 2022 to announce the news on the first day of construction. Recalling the long time between Dongfeng and Kia for 19 years is enough to make a generation grow up, and it is enough to let more generations deeply recognize and even love a brand. Although the cooperation between the two sides has ended, the time of walking hand in hand has also left a glorious moment. It's just that when it does happen at the end of 2021, I just want to ask: So, love is really going to go away, right?
Although I have never bought a Kia car, the first car I drove in my life, and for a long time, is Kia's Maxima. In fact, in the era when Sail could still sell for 100,000 yuan, a family car was undoubtedly full of temptation for every family, a desired but hard-to-get luxury. Therefore, Kia's Maxima, such a priced within 100,000, was very competitive in price and in line with the demographic structure of Chinese families at that time, and was undoubtedly a "BMW" in that year.
From today's point of view, Maxima is obviously not a very good car. I still vividly remember that in the summer of 15 years ago, I finished eating hot pot and singing, climbing the slope with the air conditioner on, but I was hit by the lack of power in the cold, and I watched the slope in place without any way.
Since 2009, China has become the world's largest auto consumer market, and Kia has begun to take a soaring path.
From 2009 to 2016, Dongfeng Yueda Kia sales hung up in the acceleration gear, soaring from 241,300 vehicles in 2009 to 650,000 vehicles. In terms of automotive products, Dongfeng Yueda Kia launched the Kia K5, which is known as one of the three treasures of a certain silk; in the SUV model, Kia's sporting and smart running still have a large number of user groups.
As for the popularity of those Dongfeng Yueda Kia products in that year, it can be generally boiled down to two aspects.
First of all, there is no doubt that the price is value for money, and at the same price point, you can always find the product that best meets the aesthetics of Chinese consumers of that year. For example, in the segment of mid-to-high-end cars, K5 is undoubtedly the one with higher cost performance.
Secondly, Kiati has laid out corresponding products in various market segments. In the SUV market, the two models of Smart Run and Sportage also have a very distinct ladder configuration, covering two price ranges of 100,000 to 200,000; in addition, Cerato has also won a place for itself with cost performance in the competition with Products such as Kaiyue and Polo, which were named mid-level cars (now classified as compact).
Relying on these products with good strength and better cost performance, Kia can be said to have truly shared the dividends of the vigorous development of China's auto market. But the problem obviously can't be hidden.
After all, it is well known that the first decline in the overall sales volume of the Chinese auto market occurred in 2018, but Dongfeng Yueda Kia obviously touched its own sales "ceiling" earlier than the Chinese market. Since 2014, when Dongfeng Yueda Kia sold nearly 650,000 vehicles, it was difficult for their products to gain inches.
For three consecutive years, Dongfeng Yueda Kia has hovered above the annual sales data of 600,000-650,000 vehicles, and in 2017, the situation suddenly became unstoppable. Among them, there are reasons why new market forces began to emerge in 2016, and there are also reasons for the continuous improvement of domestic automobile brand product strength. All in all, Kia products, which could still compete with other joint venture cars, were already being compared with domestic cars by many consumers at that time.
In one year, Dongfeng Yueda Kia's sales have fallen from 650,000 units to almost "waist cut", from 359,000 in 2017 to 163,400 in 2021. How to understand this data? In 2005, Dongfeng Yueda Kia sold 110,000 vehicles for the whole year. Obviously, this is a sales performance that has almost fallen back to its historical origin.
So, now you must be thinking of the same question as me, is the retreat of the East Wind because Kia is no longer able to do it?
Kia is still very good, but it is lost in China
On the contrary, the Kia brand, which is tired in the Chinese market, is still performing quite strongly in the global market. In 2020, Kia sold a total of 2.6073 million vehicles worldwide; in 2021, Kia achieved sales of 2.777 million vehicles, ignoring the spread of the global epidemic and ignoring the lack of cores in the global automotive industry, ushering in a 6.5% increase.
Therefore, it can be concluded that Kia is still very good on a global scale, but not in China. Such turmoil is not only reflected in the decline in sales since 2017, but also in the turmoil of the company's revenue and overall strategy.
This swing first led to a cliff-like decline in corporate revenue. From 59.461 billion yuan in 2016 to 7.13 billion yuan in the first half of 2021; net assets even fell from 9.877 billion yuan to 842 million yuan. It is believed that even if the data in the second half of 2021 is released, its sharp downward trend is basically irreparable.
The sharp narrowing of the company's assets and revenue is obviously inseparable from the instability of the company's high-level structure. As of March last year, Dongfeng Yueda Kia announced that Liu Changsheng had replaced Li Feng, the first Chinese executive in the company's history, and the company had changed executives five times in six years since 2015. The frequent change of executives has led to frequent changes in corporate strategy, and there is basically no continuity.
But in fact, Li Feng's protection for Dongfeng Yueda in 2020 is not just sales. In 2020, the most difficult year in the national auto market, Dongfeng Yueda Kia still maintained a total sales volume of 249,000 units, which was only more than 40,000 units lower than the sales performance of 289,800 units in 2019.
The more important core point is that the average unit price of Dongfeng Yueda Kia automobile sales reached 128,700 yuan in that year, an increase of 21,000 yuan / vehicle year-on-year. That is to say, although sales have fallen slightly, the unit price has increased, which can completely stabilize the income. Under such circumstances, there is still a change of executives, which will not only affect the consistency of the company's brand operation strategy, but also lead to the strategic steps that could have stabilized Xu Tu's comeback and was directly pushed back and restarted. After all, Li Feng wanted to fight for three years, but Kia didn't seem willing to wait that long.
Of course, in addition to the impact of the marketing level, at the product level, Dongfeng Yueda Kia seems to have had no major moves for a long time. The most intuitive feeling is that before the launch of the new generation of Kia Kahua in the second half of last year, few people were able to retrieve from the impression what Kia products could be used in recent years and called famous names.
The reason why Kia has achieved such excellent sales results in overseas markets is that a large number of products that have not been introduced into China have actually played a decisive role. For example, the K9 and high-end Kia K8 sedans in the Korean market, which are in the flagship positioning of the Kia brand, as well as the fifth-generation sporting car released last year, can actually become a weapon for Dongfeng Yueda Kia to raise its brand status and expand its sales product line.
But unfortunately, as of 2021, Kia's high-quality products overseas have not been introduced, and the existing products in China have not been better updated, let alone developed "customized" products for the needs of the Chinese market like other joint venture brands. Obviously, whether it is for the sake of high-end, or for innovation, or to meet their own needs, it seems that they will not find a satisfactory answer here in Dongfeng Yueda Kia.
The question now is, as one of the shareholders, Does Dongfeng really not understand the situation in the Chinese market and really does not understand the needs of Chinese consumers? Can't they give some useful advice?
The East Wind is gone, Kia is born?
Although dongfeng's overall matrix in the joint venture brand field has shrunk greatly in recent years (including the end of Dongfeng Yulon, Dongfeng Renault, and now withdrawing from Dongfeng Yueda Kia), they still try their best to stabilize the Group's important position in the Chinese automobile sales market in terms of sales.
In 2021, Dongfeng Group sold a total of 2.7751 million products, although it fell by 3.25% year-on-year, but its overall sales data is still considerable, saying that they do not understand the needs of Chinese consumers, and no one may believe it. But in terms of Dongfeng Yueda Kia's product operation, Dongfeng really did not intervene too much.
In fact, earlier, the relevant leaders of Dongfeng had said that "in the actual operation of Dongfeng Yueda Kia, Dongfeng did not participate too much, but more to provide it with car-making qualifications." In 2015, Zhu Yanfeng, chairman of the board of directors and secretary of the party committee of Dongfeng, clearly put forward the positioning of Dongfeng Yueda Kia: to be profitable, on the basis of profit to measure. Therefore, Dongfeng only participates in the operation, and the management area is limited to production and internal process control.
On top of a series of core businesses that affect the development and operation of enterprises such as product planning and parts procurement, Dongfeng really does not have and seems to be difficult to intervene in. After all, if Kia wants to operate, Dongfeng can be completely happy to see it, after all, he also has a bunch of joint ventures and independent brands in his hands that need to be taken care of, and if these brands are done well, they can already sit firmly on the throne of the domestic automobile group giants, and Dongfeng Yueda Kia can completely become the icing on the cake.
In fact, the stock ratio relationship between Dongfeng, Yueda and Kia has always changed. In the earliest days, Yueda held 70% and Kia held 30%; later Yueda 50%, Kia 30%, Hyundai 20%; in the previous Dongfeng and Yueda each held 25%, Kia held 50%. Obviously, what Kia has always wanted to fight for is undoubtedly the right to do business (as early as 2005, Yueda had tried to acquire dongfeng's related shares for 200 million yuan).
Originally, the two sides could have reached a balance on this point, after all, Kia wanted to operate, Dongfeng wanted to make a profit, and the two sides did not have the space to compete, but after The business decline of Dongfeng Yueda Kia for many years, this seems to be difficult to do. Exiting non-performing assets and re-integrating business has become a very wise choice for Dongfeng.
Obviously, for Kia, in the era of exchanging shares for car-making qualifications, with the liberalization of China's foreign ownership ratio of joint venture car companies, it has completely lost the need to continue to exist. And for Dongfeng, leaving with dignity in this era is obviously not a very bad ending.
Today, the problems facing Dongfeng and Kia seem similar. Kia needed to restructure its brand image and product lines. Therefore, earlier, Kia changed its own car logo, and also said that it will adjust the product line in the future, abandon products below 100,000 yuan, and start the first year of electric power in 2022. It is reported that from next year to 2027, Kia will start from the new pure electric vehicle EV6 and launch a new electric model in China every year, forming a new EV matrix of 6 electric vehicles.
After all, in the European market, Kia's electric vehicles are already selling well, and the new Kia Kahua launched last year has also effectively captured the trend of changes in China's family demographic structure and bet on the MPV market. More importantly, Kia, which has gained a greater voice, can fully introduce models that are more popular overseas to boost the brand image, and at the same time begin to seriously consider whether it should create local customized products that are more suitable for Chinese consumers.
All in all, the drawbacks have long been apparent, the prescription is very clear, and the only variable is whether Yueda Kia is willing to make a drastic effort to reintegrate and start again.
For Dongfeng, after adjusting the unprofitable joint venture project in hand and reintegrating resources, whether it can revitalize the group's high-quality business and turn over against the wind in 2022 seems to be worth looking forward to.
It's just that "love" has indeed disappeared.
Although at the end, there will always be the beginning, but no matter what, we have to wish them all well in 2022.