Since November last year, Dongfeng Motor officially transferred its 25% stake in Dongfeng Yueda Kia for 297 million yuan on the Shanghai United Assets and Equity Exchange, and the "movie" of dongfeng Yueda Kia for three people has come to an end.
However, Dongfeng's withdrawal did not affect the cooperation between Kia and Yueda, and the two sides even increased their capital by 900 million US dollars, setting a target of more than 4 million vehicles in China in the next decade. This confidence also allows the outside world to see the determination of both sides to win the Chinese market. As for the information about the new joint venture, it is reported that it will be officially announced in April.
Integrate global resources and feed back the Chinese market
On February 7, Kia Co., Ltd. signed an investment expansion agreement with yancheng people's government and Jiangsu Yueda Group. According to the agreement, Kia and Yueda Group intend to form a joint venture company, which plans to increase capital by 900 million US dollars, which will focus on promoting the introduction of global strategic models and new energy vehicles, and at the same time increase vehicle sales and capacity utilization rates by expanding investment and increasing exports.
With this signing as an opportunity, Yancheng will continue to serve as a base for Kia's future business in China. It is understood that in the next ten years, Since Asia plans to achieve a total production and sales target of more than 4 million units in China, for which Kia has also laid out a layout in integrating resources and product matrix.
According to the data, in 2021, Kia's global sales volume was 2.777 million units, an increase of 6.5% year-on-year, of which the performance of overseas markets was more prominent, with sales reaching 2.242 million units, an increase of 9.1% year-on-year. However, unlike other car companies that have won most of their sales in China, Kia sold 152,000 units in China in 2021, down 39% from 249,000 in 2020 and accounting for only 6.8% of overseas markets.
In order to reverse the sluggish sales in China, Kia said that it will integrate global superior resources, focus on promoting the introduction of global strategic models and new energy models, better feed the Chinese market, and enhance Kia's competitiveness in the Chinese market.
In fact, as early as February 2021, Kia announced an updated medium- and long-term strategy "Plan S", which began a future development route focusing on electric vehicles and mobility solutions. According to the plan, by 2026, Kia's electric models will be expanded to 11 models, including 7 exclusive electric models based on E-GMP, Kia's dedicated platform for electric vehicles.
Specific to the Chinese market, Kia launched the first exclusive pure electric vehicle model EV6 last year, which has plans for localization. It is understood that from next year to 2027, starting from the new pure electric vehicle EV6, Kia will launch a new electric vehicle model in the Chinese market every year, gradually building a new EV matrix of 6 electric vehicles, and accelerating the electrification transformation of the Kia brand in China.
In addition, Kia's joint venture in China will also build a new organizational structure, establish an innovative organizational culture, actively introduce local talents and professionals, accelerate localization, and face Chinese consumers with the new brand image of "New Kia".
According to South Korean media reports, Kia will announce the mission and name of the new joint venture at the Beijing Auto Show in April this year, and at the same time, it will also improve and adjust the dealer storefront to face the market with a new image.
Both shareholders want to expand their shareholding ratio
After the formation of the new joint venture, Yueda and Kia are also looking for opportunities in the new period of change.
According to public information, the operating period of Dongfeng Yueda Kia is from September 12, 1992 to September 11, 2022. It is reported that generally before the arrival of the joint venture period, the Chinese and foreign parties will once again discuss whether the joint venture is joint venture or not, and in what way to carry out the joint venture in the new era and new model.
The remaining joint venture period of Dongfeng Yueda Kia is just stepping on the moment when the equity ratio of the joint venture car companies in the passenger car segment is no longer limited in 2022, that is to say, the three shareholders of Dongfeng Yueda Kia can freely choose whether to joint venture or not, and negotiate the proportion of their respective equity without weighing the pros and cons.
However, unlike Dongfeng, which chose to withdraw, Yueda chose to increase the proportion of equity. On December 17 last year, the official website of the Shanghai United Assets and Equity Exchange announced that the 25% equity transfer project of Dongfeng Yueda Kia has been delisted, and some media reports have reported that recently, Jiangsu Yueda Group has completed the acquisition of 25% of the shares of Dongfeng Yueda Kia held by Dongfeng.
The share ratio structure on Tianyan also further confirmed the authenticity of the news. However, it is worth noting that at present, Dongfeng Yueda Kia has only disclosed the share ratio of the original shareholder Yueda Investment, and the share ratio of Kia and Yueda Group (the parent company of Yueda Investment) has not been announced.
It is understood that Kia is also considering expanding equity investment, and they believe that with the recovery of sales, in order to further conquer the Chinese market, it is necessary to take the lead of the joint venture company.