Shenlong Car stood at the crossroads of fate| Tang Yan Liuyu

The DPCA in the difficult self-rescue ushered in good news.

According to the 2030 strategy conference of Stellantis Group on the evening of March 1, the group and Dongfeng Motor reached a consensus that the share ratio of Dongfeng Dongfeng Automobile remained unchanged. In order to coordinate the differences in business philosophy between the two sides and the need for flat organization, the Chinese side and the French side will lead the two sales companies of Dongfeng Citroen and Dongfeng Peugeot respectively. Inside Dongfeng Motor, this new model is called "two rooms and one living room".

Prior to this, it was widely speculated that DPCA would follow in the footsteps of BMW Brilliance, JAC Volkswagen, Guangfeik, Dongfeng Yueda Kia and other companies, and be absolutely controlled by foreign parties. If this situation occurs, it means that DPCA will no longer exist, just as JAC Volkswagen has changed its name to "Volkswagen China (Anhui) Company".

Today's results are the best situation for the DPCA auto team that has been trying to save itself. The "two-room, one-room model" systematically avoids the management inefficiency and internal friction caused by reciprocal decision-making and the dual-signature system under the 50:50 joint venture model, and also defends the rights and interests of the Chinese side in the joint venture. The concession of foreign parties in equity reflects the recognition of the adversity of Dongfeng DPCA, and also reflects the importance Stellantis relies on Dongfeng Motor in terms of technology and Understanding of the Chinese Market when the era of intelligent electric vehicles comes.

In the past few years, French cars have been defeated in China, Dongfeng Renault divested, Changan PSA was sold as a whole, Renault Brilliance went bankrupt and reorganized, and French cars were left with only one seedling of DPCA in China.

Time back to 2016, under the dual market squeeze of consumption upgrading and sales decline, second-tier joint venture brands such as Dongfeng Dongfeng Peugeot Citroen Automobile, Beijing Hyundai, GAC FCA, Changan Ford, and Dongfeng Yueda Kia collectively entered a cliff-like downward channel. Among them, DPCA has fallen from the highest annual sales of 700,000 vehicles to 50,000 vehicles per year.

To this day, Beijing Hyundai, Dongfeng Yueda Kia, and Guangfeike are still in a continuous decline, such as Guangfeike only sold more than 20,000 cars in 2021. DPCA crossed the threshold of 100,000 vehicles in 2021 with a year-on-year growth rate of 100.07%, and finally paid employees a year-end bonus of 5 months' wages after several years.

Objectively speaking, one of the reasons for the doubling of DPCA's sales is the low base, but it is also necessary to see that the changes in the entire market have worsened the second-tier brands.

After 2017, China's fuel vehicle market continued to decline, even if the entire car market achieved positive year-on-year growth in 2021, but the vast majority of the increase came from new energy vehicles, and the total sales of fuel vehicles were still lower than in 2017. At the same time, luxury car companies have aggressively advanced into the hinterland of joint ventures through compact products, and the head independent car companies are also attacking in a big way, from dealer outlets to users, comprehensively cutting the market share of second-tier joint venture brands. The outbreak of the new crown epidemic in Wuhan in 2020 is even worse for DPCA.

Within the company, DPCA also faces multiple difficulties such as continuous loss of personnel, unstable military morale, and lack of chips. Last summer, after the outbreak of the epidemic in Malaysia, Bosch ESP chip was cut off in a large area.

Chen Bin, general manager of DPCA, once told this writer that the company had purchased Bosch ESP chips on the black market at a price 300 times higher than the normal price (up to about 4,000 yuan / piece). When the author asked why DPCA was willing to bear such a huge cost to purchase chips, Chen Bin said: "For other companies, if they reduce production due to lack of chips, they only lose a little production and sales. For DPCA, if it cannot hand over the car because of the chip, it is facing an existential crisis of cash flow disruption and employee wages. ”

Looking back at the desperate changes in DPCA, the author believes that DPCA has done at least 5 things correctly: to unite people's hearts and boost morale at the lowest point of the enterprise; the two shareholders give up the difference in ideas, the foreign shareholders fully delegate the power of the Chinese team, cancel the double-signature system, reduce management run-in; from the enterprise internal, dealer channel outlets and other system-wide customer-centric transformation; adhere to the investment in new products and technologies; innovation in the field of marketing and service. When the recovery of the whole system is insufficient, the innovation of marketing and service has played a key role in promoting the development of new customers and the stimulation of customer re-purchase of cars, and the bold use of "Versailles" as the car name is a typical case.

Although the annual sales of 100,000 vehicles are not remarkable in the Chinese auto market, the detailed data can see that the sales of DPCA have increased positively year-on-year for 13 consecutive months. Among them, the Versailles C5 X, which has been on the market for only 3 months, sold 12,100 units last year, and DPCA finally has a pillar product. Dongfeng Peugeot 4008, 5008 and other product sales figures are not high in the industry, but the proportion of high-value goods has increased and improved significantly, and the sales volume of 508L has exceeded the achievements of the peak of Shenlong.

What is even more valuable is that the senior management of DPCA is more calm and sober about the future goals. CbN published an article in 2019 pointing out that the defeat of DPCA was largely due to blind strategic adventurism. In a recent communication, Chen Bin said that the goal of DPCA in 2022 is to achieve a break-even point of 170,000 vehicles, and then stabilize it, consolidate the foundation of the enterprise, and not pursue the sales targets of 500,000 vehicles and 700,000 vehicles in the future, but pay attention to the quality of operation.

In the 30th year of its establishment, DPCA came to the crossroads of destiny. In the "two rooms and one hall" model, the foreign side will dominate the future of Dongfeng Peugeot, and the Chinese side will lead the development of Dongfeng Citroen.

The author believes that this design is a very meaningful attempt for DPCA and the shareholders of both sides. All along, although Dongfeng Citroen and Dongfeng Peugeot are two brands, all products are of the same root, regardless of body size, powertrain, cockpit layout and configuration scheme are highly similar, can only be distinguished in shape, the two brands in the market not only did not form a synergy, but also have a large internal friction with each other.

Chinese and foreign shareholders lead a brand, and under the introduction of their respective technologies, Dongfeng Citroen and Dongfeng Peugeot may form a real differentiation in products and technologies. Dongfeng Motor can amortize R&D costs in the process of technology output, in line with the globalization system and standards of foreign capital; Stellantis Group can use Dongfeng Motor to make up for its shortcomings in electric vehicles, automatic driving, intelligent cockpit, and grasp of Chinese user needs.

In the era of fuel vehicles, the products and technologies of the Chinese automobile market are mainly based on the introduction of foreign capital, and the preferences of European and American users are used to cover the needs of Chinese users. However, in the era of intelligent electric vehicles, the attributes of automobiles in consumer electronics are getting stronger and stronger, and the market leadership and transformation will start from China. Embracing Dongfeng Motor will be an opportunity for Stellantis to usher in a new era.

It should be pointed out that although DPCA has achieved a hard-won performance reversal and maintained the proportion of Chinese shareholders, it is still not able to talk about stable and sustainable and profitable operation. At the same time, the first year of China's new energy vehicles will open in 2021, and in the next few years, there will be a drastic structural adjustment in the Chinese auto market, and DPCA will face the pressure of the continuous rapid decline of the fuel vehicle market and the dual-line combat of the new intelligent electric vehicle track.

In 2021, DPCA has temporarily survived the challenge of survival, but because of the upcoming changes in corporate governance structure, it has entered a crossroads of fate, and there are still many challenges to be overcome on the road ahead.