All of the information stated in this article is based on reliable sources of information and is detailed at the end of the article.
Text: Bapro's monologue
Bapro's monologue
Today's air-conditioning industry can be said to be a "three-legged stand": Gree, Midea, and Haier. But in fact, as early as the eighties and nineties, there was also an air conditioning brand that monopolized half of the country - Chunlan air conditioning.
In 1994, Chunlan's sales were as high as 5.6 billion, and the net profit could be 600 million. At that time, Gree's turnover for a whole year was only 600 million.
However, now, it is difficult for us to see the brand Chunlan again, and even rely on selling real estate to support the air-conditioning industry.
What has happened in just a few decades?
A new broom sweeps clean
In the mid-eighties of the last century, Taizhou Refrigerator Factory (Chunlan) was just a small factory that did not pass on the name.
At that time, the annual output value of air conditioners produced every year was only about 10 million yuan.
This made it only relegated to the bottom of the rankings of many air conditioning manufacturers in the country at that time.
Due to the imperfect business philosophy and backward production equipment conditions, Taizhou Refrigerator Factory has been losing money year after year and is on the verge of bankruptcy.
The former site of Taizhou Air Conditioning Equipment Factory
And it was at this time that Tao Jianxing was ordered to take on the burden of the factory director.
At that time, Tao Jianxing was just an ordinary technician in the factory.
Many old employees in the factory are skeptical of Tao Jianxing, who is newly appointed and has no experience in corporate management.
Tao Jianxing was born in Zhenjiang, Jiangsu Province, and graduated from Nanjing University in China.
With a love of reading and research, he slowly began to develop a strong interest in advanced Western technology and household appliances.
Because of this, after graduating from university, he came to Taizhou Electromechanical Factory to devote himself to the technical work of developing air conditioners.
Faced with the common problems of large state-owned collectives, Tao Jianxing, who served as the director of the factory, began a drastic reform the following year.
"By eating a big pot of rice, those who work and those who don't work are the same, how can there be development?"
He was keenly aware that in order to save the factory from the crisis, three fires had to be lit.
The first fire he started was to reduce the number of elite soldiers and generals, and many useless and bloated departments were laid off one after another.
The second fire was burned on technology, and Tao Jianxing decisively cut down more than 30 kinds of products of poor quality produced by the company at that time.
Then the third fire was ignited, that is, all the manpower and material resources of the whole factory were put into one thing - "making air conditioning".
In fact, Tao Jianxing did not reform the enterprise as soon as he took office, but made other preparations.
He wanted to find out the problems of the factory itself, as well as the current demand in the domestic market.
Even the response plan and R&D direction, he has made full preparations.
It is precisely because of his research and analysis that fits the market this time that Tao Jianxing found a big problem.
Sure enough, a problem was found
At that time, the capacity of air conditioners on the market was basically 2000-3000 calories, and the use experience was difficult to meet the needs of current people.
So he decided to concentrate his efforts on developing large cabinets of more than 7,000 calories.
Finally, the 7,000-watt large-capacity central air conditioner led by Tao Jianxing came out. Tao Jianxing quickly put it into the market and quickly seized market share.
In this way, under the leadership of Tao Jianxing, Taizhou Refrigerator Factory turned losses into profits step by step.
Until 1989, the sales volume of air conditioners in Taizhou Electromechanical Factory has reached more than 100,000 units, and it has ranked first in the field of domestic refrigeration equipment sales.
Since then, the "Chunlan" brand air conditioner has officially come out.
By 1990, the annual output value of Chunlan company's air conditioner had reached 120 million yuan.
The reason why its production capacity has increased unprecedentedly is due to Tao Jianxing's merger of four companies and the expansion of Chunlan's production line.
In 1994, Chunlan achieved the myth of an annual output of more than one million, annual sales of 5.3 billion yuan, and a net profit of 600 million yuan.
At the time, this figure was astronomical for the general public.
Because at that time, the average monthly income of people was only 380 yuan.
At that time, Chunlan was in full swing in the air conditioning industry.
In contrast, during the same period, Haier, Gree, Oaks and other brands of air conditioners can only regard Chunlan as a benchmark and "idol".
When Chunlan made a lot of money, and the major manufacturers wanted to squeeze into the air conditioning market to get a piece of the pie, Chunlan put her attention into other fields.
Abandon the car to protect the handsome
In the winter of 1994, Chunlan's development momentum was strong, and Tao Jianxing put Chunlan into Shanghai A-shares.
Two years later, Chunlan's annual output value has reached 10.7 billion yuan.
Just when many people thought that Tao Jianxing, who was thriving in the air conditioning industry, would further expand the factory to seize market share, he made a decision that surprised everyone.
In 1994, Tao Jianxing took 2 billion yuan to invest in the motorcycle industry.
Two years later, Chunlan motorcycle came out.
Each motorcycle was priced at 5,000 yuan, which was a lot of money at the time.
But Tao Jianxing knows that in China, there are always some people who are not bad for money.
Sure enough, its two motorcycles that just entered the market sold more than 60,000 units in only half a year, with sales of up to 1 billion yuan.
And the reason why he is willing to take risks and invest across banks is precisely because he has greater ambitions in his heart.
"Build Chunlan into a universal tool in China. ”
In 1997, Tao Jianxing spent 720 million yuan to acquire Nanjing Dongfeng Motor Company and created the Chunlan Automobile brand, focusing on light trucks of 5-15 tons.
After a brief period of success, Tao Jianxing cooperated with the LG brand to launch a fluorine-free refrigerator, and also set foot in the field of televisions and liquid crystal displays.
However, no matter how energetic a person is, it is impossible to do everything. Tao Jianxing slowly began to be a little overwhelmed.
Beginning in 2000, Chunlan Display first encountered Waterloo.
Tao Jianxing lost nearly $600 million in this defeat, and this blow is just the beginning.
With the changes in the market, people are more favored for heavy trucks over 30 tons.
As a result, Chunlan's small and medium-sized trucks have gradually lost their sales.
And Chunlan's washing machine is also losing money year by year.
Tao Jianxing, who suffered a series of blows, had to choose to abandon the car to protect the handsome.
In 2008, Tao Jianxing transferred Chunlan Depot to XCMG Group.
Tao Jianxing, who has been firmly sitting in the leading position in China's air-conditioning industry, never thought that Chunlan would miss the second golden stage of air-conditioning development.
In 1998, when Gree invited Chunlan from the first place in the sales list, Midea and Haier also sprung up one after another.
At this time, Chunlan was already exhausted, and Tao Jianxing dispersed a lot of funds and manpower for the development of multiple fields.
In the face of other air conditioning manufacturers that are gaining momentum, Tao Jianxing can only sigh.
In 2005, Chunlan air conditioning suffered a loss of more than 25 million yuan for the first time.
In 2007, the revenue of its air conditioning business has dropped to 31.52%, and the net loss of the company is as high as 198 million yuan.
From 2005 to 2007, Chunlan had lost money for three consecutive years and was required to suspend trading by the Shanghai Stock Exchange.
At this time, Chunlan's loss has exceeded 500 million yuan.
Turn to the battlefield for survival
In the face of these series of blows, Tao Jianxing slowly understood that not everyone can learn the operating model of GM.
If you want to be a general purpose in China, it is not so simple.
In order to reverse the predicament, the reinvigorated Tao Jianxing began to wander around, hoping to find some partners to help him pull Chunlan out of the predicament.
However, investors have either avoided Tao Jianxing or politely rejected it.
All investors understand that Chunlan's air conditioning story is already yesterday's errand. Nowadays, no one will take this hot potato.
In 2009, Tao Jianxing, who saw that there was no hope of attracting capital, had to use accounts and equity to replace equity and land in order to keep Chunlan.
After 18 months of suspension, Chunlan is finally back on the market.
However, at this time, Chunlan is no longer the leading air-conditioning boss of the year, but is gradually transforming to the real estate industry.
Nowadays, the domestic air conditioning market has also been Midea, Haier, and Gree. Even Oaks can punch Chunlan to the ground.
Today, it is difficult for Chunlan to make a comeback in the air-conditioning market.
The span from the home appliance industry to the automobile industry can be said to be quite large, and it is this expansion that has brought Chunlan into decline.
On the 19th of last month, Chunlan shares replied to investors' concerns on the investor relations platform.
Investor:
Does your company have any new development properties in 2023?
Chunlan replied:
Hello investors, in 2023, the company will not develop new real estate, and the stock of real estate for sale will be about 130 million yuan.
The decline of Chunlan air conditioning is indeed regrettable, but we still have to wait and see what the future development prospects are......
#文章首发挑战赛#
Resources
[1] Securities Star - "Chunlan Shares: The Company Has No Plans to Participate in the Business You Mentioned at Present"
[2] Securities Star - "Chunlan Shares: The company's income includes three parts, air conditioners, real estate development and others, and the sales of accessories are part of the income of other businesses, accounting for not high"
[3] China Securities Journal - "Chunlan Shares: Net profit of 134 million yuan in the first three quarters of 2023, a year-on-year increase of 17.98%"
[4] Zhengshang Refer to - "The Decline of the King of Air Conditioners: It Has Been the Sales Champion for 8 Consecutive Years, Gree Regards It as a Model, and Now Sells Houses to Continue Its Life"
[5] Investor.com - "Known as the "King of Air Conditioners", the No. 1 Sales Seller for Many Years!