From the beginning of November last year, when it was rumored that it was going to abandon its joint venture brand with Yueda Kia, and then to the official sale of its 25% stake on November 21, Dongfeng Group staged a classic "fast knife chopping mess" for us at the end of last year. Dongfeng Yueda Kia, a joint venture brand founded in 2002, ultimately failed to celebrate its 20th birthday.
The departure of Dongfeng is a pity for Kia, but it is more of a freedom to release more discourse, and it also means that Kia will enter a new chapter with a new attitude.
Without the strong backing of Dongfeng, Kia must cheer itself up, and to a large extent, it has also given Kia a warning: if it does not jump out of the comfort zone to make changes, it may really be eliminated by the market.
Breakup event
In the domestic car market, there are not many incidents of joint venture companies "breaking up", and the reason is very simple, after all, for independent brands, joint ventures are basically like cash cows. In the automotive market, Dongfeng Motor, which relies heavily on joint venture car companies, is an example, and Dongfeng Honda and Dongfeng Nissan in its hands can make no less money.
In the same way, everyone is willing to make money lying down, and no one is willing to do the loss-making business, so another joint venture car company under Dongfeng, Dongfeng Yueda Kia, has also officially "broken up" with Dongfeng Motor due to its poor performance, which is also another foreign car company that parted ways with Dongfeng Motor after Renault left China.
Last year, Kia set a goal of selling 255,000 units a year, but it still didn't come to fruition. In fact, the reason is that the influence of Korean cars in the high-end market is far less than that of Japanese and Germans; in the low-end field, its price and configuration are competed by Chinese independent brands, and the competitiveness of Kia's product portfolio needs to be further improved.
Therefore, the withdrawal of Dongfeng Group is not difficult to understand, and today's new car sales have entered the stock market, not only the growth rate has slowed down, but also faces the "transition" of new energy vehicles and fuel vehicles.
In the face of this unknown market, Dongfeng Group, which has already shouldered too many "weak joint venture brands", even if it has a state-owned enterprise background and a strong family foundation, is also facing the problem of open source and cost reduction, and it is logical to abandon some unprofitable brands and reintegrate its resources.
Therefore, we can also see that Dongfeng terminated its cooperation with the Renault brand, integrated Infiniti into the Dongfeng Nissan system, and abandoned a series of operations such as continuing the joint venture with Yueda Kia. However, this can not be blamed on the Dongfeng Group's fierce heart, The Korean car is now exhausted, I believe everyone is very clear.
In 2014-2016, when the Korean car was at its peak, the annual sales of the Kia brand in the Chinese market once exceeded 640,000 vehicles, which was equal to the German Japanese brand in terms of volume, but with the exposure of a series of negative news, the Korean car quickly fell, and the sales plummeted by 45% in 2017, and then declined year after year, and in 2021, according to the official data, the Sales of the Kia brand were only 158,500 vehicles, and compared with 2020, there was a plunge of up to 27%.
In addition, Dongfeng Group's voice in the Dongfeng Yueda Kia joint venture company is not much, and the proportion of shares is only 25%, so giving up this "chicken rib" does not have much impact on Dongfeng.
2
Start another stove
The Kia brand, which is tired in the Chinese market, is actually still quite strong 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.
At the product level, Dongfeng Yueda Kia also seems to have had no major actions 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.
It is a pity that as of 2021, Kia's high-quality products overseas have not been introduced, and the existing products in China have not been better updated, and there is no "customized" product for the needs of the Chinese market as other joint venture brands have been developed separately. 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.
Nowadays, Yueda Kia has begun to "Dongfeng" and reshape the brand image. On February 7, Kia Co., Ltd. signed an investment expansion agreement with yancheng people's government and Jiangsu Yueda Group. Song Husheng, President of Kia Co., Ltd., Zhou Bin, Acting Mayor of Yancheng City Government, Zhang Naiwen, Chairman of Jiangsu Yueda Group, and Liu Changsheng, General Manager of Dongfeng Yueda Kia, witnessed the signing of the agreement.
Kia and Yueda plan to form a new joint venture to open a new era of joint ventures. The new joint venture plans to increase capital by USD 900 million and rapidly increase vehicle sales and capacity utilization through expanding investment, introducing new models, developing new energy vehicles, and setting up an export base. According to the plan, the new company name will be released in April this year.
Kia will focus on promoting the introduction of global strategic models and new energy vehicles. The new models launched this year will be equipped with a large number of safety configurations and new technology configurations to further enhance product performance and market competitiveness, and together with models on sale such as Jawa and SmartCar Ace, kia's global strategic model lineup will be improved.
From next year to 2027, Kia will integrate into the global system and increase investment in the Chinese market, Kia will pay more attention to the needs of Chinese consumers, and combine globalization and localization. Starting from the new EV6, Kia will launch a new electric model in the Chinese market every year, gradually building a new EV matrix of six electric vehicles.
Kia brand also revealed that in order to make the brand boutique in the future, they will gradually stop production of low-end models below 100,000 yuan in the Chinese market, if Kia can really re-introduce more global models in the future as they promised, such as telluride, a medium-sized SUV that sells well in the United States, or the EV6, an electric vehicle with high sales in Europe, etc., and treat them equally and do not discriminate, and slowly re-establish the brand image. Then I think this Korean brand actually has a chance to turn around.
3
Write at the end
Sometimes, attitude is even more important than the product. Everyone knows that Korean cars actually have strength, after all, global sales do not deceive people, but you still launch some confusing products in the Chinese market in the case of strength, which is really more diaphragm than those brands that do not have the strength to build good cars.
Korean cars were first introduced to the country to mostly cheap models, at that time most of the korean cars with good sales were low-end models, which left a cheap impression on the Chinese people, this impression is difficult to reverse once formed, so the current Korean cars in China are in a very embarrassing situation. Kia's sales decline is also a reasonable thing, but if you want to develop in the long run, the Chinese market can't give up, so we also look forward to its follow-up performance.
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