The gradual rise of independent automobile companies, the most injured are some joint venture car companies, the sharp decline in sales has led to a sharp decline in profitability, and even into a huge loss, Changan Suzuki, Dongfeng Renault's eclipsed exit from the Chinese market is a typical example. In November last year, Dongfeng Group sold its 25% stake in Dongfeng Yueda Kia, sparking speculation about the future of the Korean brand.
In 2021, the total sales of all models of Dongfeng Yueda Kia are less than one-third of the peak sales of 650,000 vehicles in 2016, and the best-selling model is kia smart running, but the sales volume is only 2940 vehicles. As for the flagship sedan, the K5, it achieved only 1293 units in January, ranking outside the 20th place in the mid-size car market. Kia K5 has just been replaced, and it has also deliberately taken a Chinese name - Kaiku, but this practice of pleasing the Chinese market has not achieved corresponding results.
Through the market performance of the brand flagship model, we can often see the development trend of a car company, K5 Kaiku after the replacement, not only the appearance of the interior has been redesigned, but also the size parameters have been fully upgraded. The length of the car is close to five meters, the wheelbase has reached 2900mm, and the powertrain has changed from the original 1.6T+7DCT, 2.0L+6AT to 1.5T+7DCT and 2.0T+8AT. There are many small problems with the 2020 model, which makes its cost-effective advantage in the same class disappear in an instant. In the sales process, the implementation rules of the lifelong free maintenance service launched by the launch cannot be clearly explained to the user, which is also an important reason for complaints, and the impact on the brand is difficult to recover.
In addition to the poor market performance of the main models, the equity structure of the three-party joint venture may also be one of the reasons behind the sales quagmire. Most domestic joint ventures are two-party capital, and according to the relevant provisions of the state, the shares of independent brands shall not be less than 50%, although the equity distribution is subject to policy constraints, but in terms of major decisions within the company, the position of different enterprises in the joint venture brand is different. Especially Dongfeng Yueda Kia as a tripartite joint venture, the equity accounted for 25% of Dongfeng Group, Yueda Group 25%, Kia 50%, but the status of the three enterprises is very different, Dongfeng is a strong state-owned enterprise, Yueda although the same state-owned enterprise, but the strength and Dongfeng can not be compared, Kia is a technology transferor, as the saying goes, "a monk carries water to drink, two monks carry water to drink, three monks have no water to drink", many people in addition to the strength, but also more likely to disagree. This is also an important reason for the gradual decline of some joint venture brands, the lack of judgment on the market, the slow upgrading of products, and the chaos of development strategies, which can be seen from Kia's behavior in China in recent years.
At the end of last year, Dongfeng officially withdrew from the Dongfeng Yueda Kia joint venture, but how to distribute the 25% stake is still pending, and it is expected to be announced at this year's Beijing Auto Show. Without the "interference" of large domestic enterprises, Kia was finally able to free its hands and feet and carry out strategic layout according to its own ideas. High-end and electrification are the key directions mentioned by Yueda Kia officials, accelerating the introduction of more competitive global models, gradually stopping production of models below 100,000 yuan, and introducing at least 1 electric vehicle per year. Kia Kahua, which was introduced in the second half of last year, can actually be seen as the beginning of the implementation of the new strategy, but the sales performance is not ideal, and the high price may be one of the important reasons. From the survival status of a number of second- and third-tier luxury joint venture brands in China, it can be seen that Kia's high-end road is destined not to be smooth, and it may also fall into a conflict with the high-end of independent car brands.
Kia Motors does have a higher brand positioning than Hyundai Motor in South Korea, but is it wise to choose to take the road of high-end at a time of domestic turmoil? Time is yet to be verified. As for the sole proprietorship operation that some people expect, it may be more difficult, and Tesla's successful experience in China is not as simple and replicable as imagined. (Text/Understanding the Car Master Brother Driving the Wind)
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