On February 11, 2022, with the official entry into force of the new joint venture contract of BMW Brilliance Automotive Co., Ltd., a joint venture of BMW Brilliance Group in China, the future fate of Brilliance has once again become the focus of attention.
Pursuant to the agreement reached between the parties in October 2018, the BMW Group's stake in BMW Brilliance was changed to 75%, while Brilliance China Automotive Holdings Limited indirectly held the remaining 25%. The transfer of BMW Brilliance's equity to bmw group also means that brilliance's income from this "profit cow" will be greatly reduced. This has exacerbated the already worrying business situation of the enterprise.
On the one hand, its main business unit, Brilliance Automotive Group Holdings Co., Ltd., has entered bankruptcy reorganization procedures since November 2020; on the other hand, The company's commercial vehicle joint venture with French automaker Renault Group, Renault Brilliance Jinbei Automobile Co., Ltd., also submitted a bankruptcy reorganization application to the Intermediate People's Court of Shenyang City, Liaoning Province, on December 30 last year. In January, the latter ruled to accept the reorganization application.
In fact, Renault Brilliance's move is not surprising, since the beginning of last year, Renault Brilliance has successively exposed the news of large-scale layoffs, and internal employees are pessimistic about the company's prospects. According to internal sources, Renault Brilliance began to suspend the payment of wages on December 20 last year, and Renault Brilliance French CEO Schgemey has also left China. Renault Brilliance, which has been caught in the whirlpool of public opinion, finally failed to reverse the fate of bankruptcy, and after only 4 years, it quickly retreated.
dire straits
Let's pull the timeline back 4 years. On December 15, 2017, after a year and a half of negotiations, Renault agreed to acquire a 49% stake in Shenyang Brilliance Jinbei Automobile Co., Ltd. in the hands of Brilliance China for 1 yuan in cash. After the official completion of the share change, Brilliance Automobile and the Renault brand jointly established and managed Renault Brilliance Jinbei Co., Ltd. with 51:49 shares, and produced and sold light commercial vehicles under the three brands of Jinbei, Renault and Huasong.
At that time, brilliance gold cup can be described as in the "deep water", not only facing huge losses, but also accumulated debt of more than 1 billion yuan. Brilliance "sold" to Renault at a symbolic price of 1 yuan, hoping that Renault could provide more funds and technology to achieve a turnaround.
But since then, Renault Brilliance's development has not been as good as imagined. Looking back at 2017, Carlos Ghosn, then global president of Renault-Nissan Alliance and chairman and CEO of Renault Group, proposed a goal at the site of Renault Brilliance's inauguration celebration that by 2022, Renault Brilliance's annual sales are expected to reach 150,000 vehicles.
However, since 2018, Renault Brilliance sales have declined year by year. By 2020, Renault Brilliance will sell only 23,000 units, down 42.8% year-on-year compared to 2019. It should be clear that the market ownership of Jinbei buses exceeds 1 million, and its peak market share exceeds 75%, ranking first in the sales list of China's commercial vehicle market for 19 consecutive years, and is undoubtedly the first brand of light passengers in China.
Subsequently, from the second half of 2021, renault Brilliance Gold Cup stopped publishing sales data, and the news update of its official website also stopped in June last year. In addition, the ambiguity of the statistical caliber often makes the outside world have a wrong perception of the actual sales of the Renault Brilliance Gold Cup. In fact, the small gold cups commonly founded on the road today are produced by Brilliance Xinyuan, a commercial vehicle company founded in 2008 by Chongqing entrepreneur Gong Daxing.
The biggest problem with the joint venture is that there is no new product introduction, which makes it impossible for the company to achieve "hematopoiesis". In fact, at the beginning of the establishment of the company, the introduction of Renault's two light passenger Masters and Traffic has been included in the plan. However, Renault's management team and technical experts, although enjoying high salaries, are poorly managed in product research and development, sales, procurement, etc., resulting in more than three years of failure to import new products, and can only rely on the original Jinbei brand Haishi, Grace and other model changes to support bitterly.
In the face of the difficulties encountered by the joint venture company, the attitudes of the two parties to the joint venture are very different. In the case of extreme financial difficulties last year, Brilliance and Renault jointly injected 600 million yuan into the joint venture company according to the share ratio. And Renault has drawn salaries again and again, so that the joint venture company can achieve a reversal of the heart has been powerless. Since the end of May, a number of important projects of the joint venture company that are currently in progress have been suspended one after another, and French experts have begun to withdraw one after another. In early December, Renault Group preemptively disclosed to overseas media that "in view of the inability of the joint venture company (Renault Brilliance) to meet its current financial obligations, the company's board of directors has decided to initiate restructuring proceedings." This means that Renault has already abandoned Renault Brilliance.
Renault Brilliance's current situation is inevitably regrettable, but it is even more deplorable if the reason is deeply investigated. To some extent, Renault Brilliance is another version of Dongfeng Renault, it can be seen that Renault's failure in the Chinese market is not accidental, this time in a disgraceful form, is about to withdraw from the Chinese commercial vehicle market, but Jinbei has borne the cost of losing years of development opportunities.
It's hard to get back
Limited by the shortage of funds, Renault Brilliance's upstream supply chain has frequent problems. Since September 2020, the company has been repeatedly exposed to being "cut off" by suppliers due to arrears of payments, which has affected normal production work. In addition, there are a number of suppliers said that Renault Brilliance has been in arrears for several months, and some suppliers have sued Renault Brilliance in court and have won the lawsuit, but Renault Brilliance still has not released the news.
According to the data, Brilliance Renault Jinbei Automobile Co., Ltd. was listed as a "high risk level" for its involvement in 1990 legal risks. As of February 2022, the company has twice been enforced by the courts for failing to meet its legal obligations on time. In addition, the number of court announcements against the company reached 408. Among them, most of the cases are related to the procurement of parts and components and the purchase of Internet services.
In addition to the huge funding gap that drags down the company's normal automobile production and sales business, the continuous cost contraction has also caused negative effects such as personnel turmoil and a large number of talent losses within Renault Brilliance.
Since the beginning of 2020, Renault Brilliance has made at least two consecutive large-scale layoffs. According to a personnel optimization contract document exposed by the company in July 2020, by the end of April 2021, Renault Brilliance Plans to "optimize" 650 employees, accounting for about 20% of the employees at the Shenyang plant at that time.
After several rounds of layoffs, there was even a "wave of resignations" within Renault Brilliance - under the influence of pessimistic expectations, the company's internal employees began to shift from "passive departure" to "active departure". Under the intertwining of the above multiple factors, the bankruptcy of Renault Brilliance is like a rout that has been written as early as 4 years ago. At the same time, it has also made Renault's career footprint in China more and more shallow.
In the past, Renault was a powerful group in China with four joint ventures of Dongfeng Renault, Brilliance Renault, EasyJet and Jiangling Renault, but now only EasyJet and Jiangling Renault are shivering in the cold wind of the car market. Specific to the model, Jiangling Renault has only launched one model at present - Yi. Judging from the recently released test drive report, many media have praised the product strength of this model.
But Renault doesn't seem content with just "leaning" on the Jiangling Group. On August 9, 2021, Renault and Geely signed a memorandum of understanding to establish a long-term partnership. In China, the two parties will jointly develop Renault brand hybrid models based on Geely Holdings' platform technology, and in South Korea, the two parties will jointly develop energy-saving models suitable for the Korean market based on the Lynk & Co energy-saving platform.
Obviously, Renault wants to use Geely's existing platform to build cars, further reduce production costs, and develop products that are more in line with the Chinese market; Geely can further share the cost of developing the platform, while absorbing the technology and production models brought by Renault from overseas. For both, it is a win-win cooperation.
Write at the end
Isn't it familiar to look at? Isn't this the brand vision of Brilliance and Renault when they announced their "marriage"? However, Jiangling is much more reliable than Brilliance in the field of commercial vehicles, and Geely is also rising in the field of passenger cars.
Will it be the next "Renault Brilliance" or the next "BMW Brilliance"? We'll see.
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