Author: Song Jiating
Doing the right thing at the right time and avoiding the change from a pioneer to a "martyr" is the problem that countless entrepreneurs feel the most headache.
In 2021, China's high-end electric vehicle market has opened up the situation. Under the pull effect of Tesla, Weilai and Ideal, which have experienced delivery problems and production capacity hell, have now sat at an average monthly sales level of 10,000 vehicles.
Benefiting from this, BAIC Jihu, Dongfeng Lantu, Geely Krypton, Great Wall Salon, Changan Avita, and SAIC Zhiji have all launched or will soon launch their high-end electric vehicles.
But seeing the new people laughing, the smell of the old people crying, just like the Denza brand jointly established by BYD and Daimler, has been repeatedly frustrated because it was born too early, and almost changed from a pioneer to a "martyr".
Now, led by BYD, Denza, which has undergone several ups and downs, has re-established sales service co., LTD. and announced that it will release a new model this year, priced at 500,000-1 million yuan, can it catch up with the boom of high-end electric vehicles? After the full liberalization of the joint venture share ratio this year, what enlightenment will Denza's experience bring to the cooperation between Chinese local car companies and multinational companies?
Denza Lesson: "Pioneer" Threatens to Become "Martyr"
Denza can be called China's first high-end electric vehicle brand.
In March 2010, BYD and Daimler signed a memorandum of understanding in Stuttgart, Germany, to jointly fund the creation of a new high-end new energy vehicle brand. In July of the same year, Shenzhen BYD Daimler New Technology Co., Ltd. was officially listed.
Two years later, Shenzhen BYD Daimler New Technology Co., Ltd. launched China's first brand focusing on new energy vehicles, that is, DENZA Denza. The brand was pinned high hopes on by Wang Chuanfu, chairman and president of BYD Group, who once called Denza Motors "a brand born on the shoulders of giants."
Because of this, deforestation's start can be described as a high-flying hit, both Daimler's brand power and design power as an endorsement, and BYD's "three electric" technology as a backing, it can be said that both sides of the joint venture have high hopes for it.
This is not the case. In 2014, Denza's first mass-produced model, the Denza 300, was officially launched, but it went all the way up and down, and since then Denza has successively launched several models such as Denza 400, Denza 500, Denza X pure electric SUV and new Denza X plug-in hybrid SUV, but it seems that there has been no improvement. According to public reports, from 2014 to 2020, Denza sold only 18,258 new cars.
When it comes to denza's folding, it is due to the high price of DENZA 300 yuan of 369,000-399,000 yuan, which is difficult to accept at that time when new energy vehicles were just starting out.
According to the statistics of the Association of Passenger Vehicles, as of 2017, China's new energy vehicle market is still based on low-end models, until 2018 Tesla into China to build a factory, the high-end electric vehicle market began to start, after 2018, Tesla rode the dust, the following two years "Wei Xiaoli" gradually stabilized, the launch of the new Denza 500, Denza X into the 300,000 yuan range has been too late, the market volume has been good at attacking the heart of the "special Wei Xiaoli" full coverage.
The low market performance has also made Denza lose money all the time. Public data shows that between 2014 and 2020, Denza lost more than 4 billion yuan.
During this period, BYD and Daimler repeatedly transfused hundreds of millions of yuan to support Denza, but the effect was very small, so it was once rumored that BYD and Daimler wanted to abandon the Denza brand.
In September 2018, Mercedes-Benz officially released the first mass-produced SUV Mercedes-Benz EQC of its electric sub-brand EQ in Stockholm, Sweden, announcing the official launch of its electric vehicle, and was once speculated by the market that Denza may become an outcast.
BYD is also continuing to build the "Dynasty Series" and has opened up the situation for its electric vehicle brand to rise with the listing of Han EV equipped with blade batteries.
After both sides of the joint venture have a new brand of electric vehicles, it seems imperative to abandon Denza. Therefore, although BYD and Daimler still have not completely abandoned Denza, the cooperation model was completely rewritten at the end of last year - BYD and Daimler signed an equity transfer agreement on adjusting the structure of its joint venture Shenzhen Denza New Energy Automobile Co., Ltd., and after the completion of the transfer, BYD and Daimler will hold 90% and 10% of the equity of Denza respectively.
At the same time, the two sides once again increased their capital by 1 billion yuan to Denza as the final farewell of the old days. For Daimler, it will completely turn around to build its EQ brand; for BYD, industry insiders believe that retaining Denza is another chip for the high-end of electric vehicle brands. However, the current high-end electric vehicle track has also become nearly white-hot, and it is still unknown whether Denza can restart and seize a favorable position.
New Joint Venture Experience: How to Turn Competition into Cooperation?
Compared with the technology joint venture between BYD and Daimler more than a decade ago, the current joint venture situation is completely different.
Starting from the Issuance of the Special Administrative Measures for Foreign Investment Access (Negative List) (2018 Edition) by the National Development and Reform Commission and the Ministry of Commerce in June 2018, the situation of China's automotive joint ventures has begun to change.
At the end of December 2021, after a four-year transition period, the National Development and Reform Commission and the Ministry of Commerce issued the Special Administrative Measures for Foreign Investment Access (Negative List) (2021 Edition) and the Special Administrative Measures for Foreign Investment Access in Pilot Free Trade Zones (Negative List) (2021 Edition).
According to the new version of the negative list, from January 1 this year, the mainland will abolish the restriction on foreign ownership in passenger car manufacturing and the restriction that the same foreign company can establish two or fewer joint ventures in China to produce similar vehicle products.
The opening up of the policy will undoubtedly give full impetus to multinational companies in various possibilities, and to some extent, everyone can choose what they need.
From 2018 to the present, compared with China's automotive joint ventures ten years ago, the current Chinese enterprises' voice in the process of joint ventures and cooperation with multinational companies is becoming stronger, especially in the new energy industry chain, and the situation of excessive strength of a single multinational company in the past tends to decrease, and it is more inclined to joint development and coordinated development.
For example, BYD cooperated with Toyota to establish a pure electric vehicle research and development company in 2020, still each contributing 50:50, at that time Toyota's vice president Shigeki Terashi said that Toyota hopes that the relationship with BYD can surpass the competitive relationship to become a "partner" and promote the common goal of electrification development.
In terms of the joint venture between Geely and Daimler, Chinese car companies have also played the role of "white knights".
Among them, The Zhimada Automobile Co., Ltd., established by Daimler and Geely Automobile, can be said to be a big hand to help smart come back to life.
Prior to this, Smart has lost 21 consecutive years of cumulative losses of about 4 billion euros, the cooperation between the two directly to smart full electric vehicle, of which the division of labor is that Mercedes-Benz's global design department is responsible for design, Geely Holdings Global R&D Center is responsible for engineering research and development, and the new models will be produced in new factories in China, put on the market in 2022 and plan to be sold globally.
In the electric vehicle industry chain, the joint venture status between multinational companies and domestic power battery manufacturers is also relatively flat. According to RENA's previous understanding, when Volkswagen joined hands with Guoxuan Hi-Tech, in the face of Guoxuan Hi-Tech's market value of 1.1 billion euros, Volkswagen did not bargain, and even did not mind whether it became a controlling party.
To some extent, this shows that the speed and ability of China's new energy vehicles to start on the same track have even partially led the level of multinational companies. It is also based on this that both Toyota and Daimler are bound to make certain compromises to Chinese companies in the new energy industry chain – and this is the difference between the joint venture between BYD and Daimler Technology twelve years ago.
At that time, BYD battery technology was still in the first mover advantage, but the new energy market has not yet become a climate, whether Daimler or BYD, Denza is a technical test, and thus missed the best node of development.
Therefore, under the leading edge of new energy vehicles for many years, the new round of joint venture cooperation between Chinese enterprises and multinational companies has many high-quality chips compared with the past, and de Espress's tortuous experience may end, but the lessons it has left behind are still worth learning.