Wen | Li Haoxian
As the world's largest single automobile market, the general understanding of China is that "those who win the Chinese market will win the world", and multinational car companies want to achieve continuous breakthroughs in profits, and the Chinese market is a must for contention.
Multinational giants such as Volkswagen, Mercedes-Benz, BMW, etc., without exception, regard China as an important part of the business map, mercedes-Benz Group CEO Kang Linsong once said that "the Chinese market is the cornerstone of our global success", and the proportion of profits obtained by multinational car companies in China is also increasing.
But there are always exceptions, as the world's fourth largest car company, Stellantis Group (formed by the merger of PSA and FCA), in the context of the continuous downturn in the Chinese market performance, can still achieve good results in the world, breaking the chinese market theory cognition.
1+1>2
According to the financial report, in 2021, the Stellantis Group's full-year revenue reached 152 billion euros, an increase of 14%, adjusted operating profit increased by 95% to 18 billion euros, and net profit was 13.354 billion euros, an increase of 179% year-on-year. In other key financial indicators, the Stellantis Group achieved an adjusted operating margin of 11.8% in 2021 and a net cash gain of €3.2 billion, 80% of the target.
In January last year, the combination of FCA and PSA was seen as a group warming under the epidemic. The core reason for this is that the growth of economies of scale after the merger will help reduce unit costs and better amortize the huge investments in future technologies to ensure the Group's profits in the coming years. But at that time, the industry generally questioned: can the idealized goal of 1+1>2 be achieved?
A year later, the group's CEO Tang Wei's practical results reassured everyone, "today's record results prove that even in the most uncertain market environment, Stellantis can provide strong performance." It should be known that the China, India, and Asia-Pacific markets, which are dominated by China, have contributed very little to this report card, and the net revenue accounted for only 2.62%, which means that Stellantis has achieved good results by relying on its own inherent market.
Fill in the gaps
Of course, the deterioration of the Chinese market is not something to show off, and Stellantis still has a gap of 10 billion euros compared to Mercedes-Benz's net profit of 23.4 billion euros last year. If Stellantis wants to go further, there is no doubt that the shortcomings of the Chinese and Asia-Pacific markets must be filled.
"In the Chinese automotive market, Stellantis will focus on an asset-light model for profit growth, with a target of €20 billion in revenue from the Group's operations in China by 2030." This is the future that Tang Weishi, CEO of Stellantis Group, described for him in the "Dare Forward 2030" strategy released on March 1.
The so-called asset-light model is actually "to revitalize idle production capacity and improve capacity utilization, which is mainly carried out by PSA Group and FCA Group, respectively, in China's joint venture business, namely DPCA Automobile and GAC FCA."
DPCA: Two bedrooms and one living room
Last year, the recovery plan of DPCA did achieve good results, and sales doubled, but only more than 100,000 vehicles, which means that more than one million idle production capacity has not been effectively utilized.
In this regard, the plan given by Tang Weishi is to open the Wuhan plant and Chengdu factory of DPCA automobile to a third party, and reduce costs by revitalizing idle production capacity and improving capacity utilization. Earlier, it was reported that the plant of DPCA has been sold to Dongfeng Honda, which will use the plant to increase electric vehicle production capacity. (Dongfeng Group owns shares in Stellantis Group)
In terms of internal structure, the dragon has also been adjusted. DPCA will not adjust the shareholding ratio, only change the structure, and will form a new joint venture company model that has not been seen before. Specifically, Stellantis will be responsible for Peugeot's business activities in China, while Citroën's business activities in China will be managed by Dongfeng Motor, which is internally called the 'two-bedroom, one-room' model.
"Chinese and foreign parties are each responsible for one brand, and the efficiency will definitely increase, at least at the management level will be improved than before." What kind of product does it look like next? If it is a compact car that follows the previous routine to get started, I don't think the opportunity is too big. Industry insiders believe.
Unfortunately, DPCA does not have a clear plan for the listing of new models in 2022, and it lacks a corresponding layout in the general trend of electrification. We may wish to look back, last year the dragon was restored, mainly due to Versailles became a "small hit", and now the so-called "good recipe" given by Tang Weishi is limited to various internal upheavals, and how much the actual help to sales can be is still unknown at the moment when the product is king.
KWNF: One Jeep strategy
Compared with the slightly improved Shenlong, the situation on the Guangfik side is more headache, with sales of only 20,000 vehicles in 2021, less than the sales of Haval H6 for half a month.
According to Stellantis' new plan, the joint venture's shareholding ratio will be increased from 50% to 75%, and the ONE Jeep strategy will be implemented, combining the Jeep products of the previous import channel with the Jeep products of the domestic channel, unifying the image of Jeep in the Chinese market, with the goal of becoming the largest off-road SUV brand in the Chinese market.
"Jeep will see if there will be a more rigid car like the domestic Wrangler or the Little Wrangler next, because with the rise of the chinese car market, this model has a lot of room for market growth, and the Stellantis Group also has a card in its hand." Industry insiders said.
Unfortunately, like DPCA, the official did not disclose what new models Guangfik will bring, or further product planning, the first pure electric SUV of the Jeep brand displayed at the strategy meeting, nor did it mention whether it would land in the Chinese market, but only roughly mentioned that it plans to operate six major brands in China and launch 30 products in 2030, in addition to expanding Maserati's import car business, are some invisible verbal commitments.
However, recently I noticed that the high-performance brand Abbas released the news of the return of the entire series to the Chinese market, which we regard as a new starting point for Stellantis' China strategy.
Selective ignore?
Through a series of strategic adjustments issued by Tang Weishi, Stellantis has the heart to save the Chinese market, but the group's priority or emphasis on the Chinese market is always low.
In the "Dare Forward 2030" strategy, Stellantis plans to achieve all vehicles sold in Europe as pure electric models by the end of 2030, and 50% of cars sold in the United States are pure electric models. According to the plan, by 2030, the Group will have more than 75 pure electric models, and the annual sales of pure electric vehicles will reach 5 million units worldwide.
It may be my glass heart, have you found that in this grand plan for the global market, the Chinese market with the highest share of new energy has been ignored, and the Chinese market has not been placed in a position worthy of attention.
Whether it is Volkswagen, Toyota, General Motors, Ford and other established traditional car companies, or Tesla and other pioneer forces, all of them regard China as the core of the development of electric strategy. Stellantis, which is determined to transform in this direction, selectively ignores important strategies for the future of the group.
This makes one wonder if the Chinese market is less important to Stellantis. Or are they simply not confident of winning this battle?