On May 14, Stellantis Group and Zhejiang Leapmotor Technology Co., Ltd. (hereinafter referred to as "Leapmotor") jointly announced today that the two companies have approved the establishment of a joint venture "Leapmotor International B.V. Stellantis Group and Leapmotor hold 51% and 49% of the shares of Leapmotor International, respectively.
Headquartered in Amsterdam, the Netherlands, Leapmotor International is headed by Xin Tianshu from the Stellantis Group's China management team as the CEO of Leaprun International, and is currently preparing for the launch of two electric models, Leapmotor T03 and C10, in Europe. With the help of Stellantis Group's global distribution channels, Leapmotor International plans to launch Leapmotor products in nine countries from September this year: France, Italy, Germany, the Netherlands, Spain, Portugal, Belgium, Greece and Romania, and plans to expand a total of 200 sales outlets, including the Stellantis & You network, by the end of this year, and expand the sales network to 500 by 2026.
At the same time, by the end of 2024, Leaprun International will also launch its products in Turkey, Israel and French overseas territories in the Middle East and Africa region, Australia, New Zealand, Thailand and Malaysia in India and the Asia-Pacific region, and Brazil and Chile in South America. By the end of this year, Leapmotor International will complete its layout for Europe, the Middle East, Africa, South America and other regional markets. In the next three years, Leapmotor International will launch at least one new model every year.
Zhu Jiangming, chairman and CEO of Leapmotor, previously told the first financial reporter, "All our EU certifications will not be completed until the third quarter, so only the fourth quarter is responsible for sales, and I hope to achieve sales of 6,000 to 10,000 units this year, and the focus is still on 2025." ”
Under the wave of the electric vehicle revolution, the transformation of foreign car companies to electrification is generally not very successful, Ford, Mercedes-Benz and other companies have slowed down the pace of electric vehicle transformation due to losses or performance expectations, and cooperation with Chinese car companies has become a common choice for foreign giants such as Volkswagen and Toyota. However, among the cooperation between many multinational car companies, the cooperation model between Stellantis Group and Leapmotor is the most unique.
In October 2023, Stellantis Group announced that it will invest approximately EUR 1.5 billion to acquire approximately 21% of the equity of Leapmotor, and at the same time, Stellantis Group and Leapmotor will establish a joint venture "Leapmotor International", which will have the exclusive right to export and sell Leapmotor to all other markets in the world outside of Greater China, as well as the exclusive right to manufacture Leapmotor products locally.
According to the two parties, the partnership will not only focus on further increasing the sales of Leapmotor in China, the world's largest car market, but also rely on Stellantis Group's mature business layout in other markets around the world to significantly increase the sales of the Leapmotor brand in the local market.
At today's meeting, Carlos Tavares, CEO of Stellantis Group, reiterated the asset-light strategy. He said that the partnership with Leapmotor could expand Stellantis' global electrification model and advance the group's electrification strategy, which will increase profits for both parties. The cooperation with Leapmotor continues to consolidate the asset-light strategy, while transforming the business model and exploring export opportunities.
For Leapmotor, through the cooperation with Stellantis Group, it can also achieve rapid overseas business in an asset-light model. With the help of Stellantis Group's global sales network, distribution channels and service network, Leapmotor can enter multiple overseas markets more quickly and complete the construction of service network, logistics network and after-sales support system. Leapmotor International is 51% owned by Stellantis Group and produced in Stellantis' overseas factories, which can avoid the policy risks of Chinese electric vehicles in some markets.
It is worth mentioning that in May 1983, Beijing Jeep, a joint venture between BAIC Group and Chrysler, was the first Sino-foreign joint venture in China's automotive industry. Over the past 40 years, foreign imports of products and technologies to joint ventures have promoted the development of China's automobiles from 1 million to 30 million, dominating the pattern of China's auto market. However, today, the technology-based joint venture model has encountered more and more challenges, and the sales, market share and profitability of joint ventures have declined sharply, and many joint ventures have been shut down.
Leapmotor International is the first reverse joint venture company in China's automotive industry, and Leapmotor has played the role of brand and product export, which is a landmark event in the transformation of China's automotive industry from "bringing in" to "going out".
According to the plan, Stellantis Group will invest more than 50 billion euros in electrification to achieve the electrification goals of its "Dare Forward 2030" strategic plan: by 2030, all passenger cars sold in Europe will be fully electric, and 50% of passenger cars and light trucks sold in the United States will be fully electric.
Tang Weishi once said at a forum that China's electric vehicles have formed the advantage of the whole industry chain, and the same car, developed and produced in Europe, is 30% more expensive than China. After the partnership with Leaprun, will the Stellantis Group's brands share Leapmotor's electric vehicle technology to develop new models, or purchase Leapmotor's systems and components?
In this regard, Tang Weishi answered the first financial reporter's question and said that relevant matters are indeed being considered, but there is no news to disclose so far.
Zhu Jiangming said that Leapmotor will continue to build a development model of "Chinese market + overseas market + Tier1 supplier", and in the future, Leapmotor will continue to rely on the Chinese market to expand new business growth points, achieve breakthroughs in overseas vehicle sales and external supply of core components of electric vehicles, and accelerate Leapmotor's net profit to turn positive.
According to the financial report information, in 2023, Leapmotor will achieve a positive annual gross profit margin for the first time, at 0.5%; Operating cash flow also turned positive for the first year, at about 1.08 billion yuan. The revenue of the year was about 16.75 billion yuan, a year-on-year increase of 35.2%, but it was still in the red, with a net loss of 4.216 billion yuan in 2023, which was narrower than the net loss of 5.109 billion yuan in 2022.
Zhu Jiangming believes that global self-development, overseas markets, and external supply of parts and components are expected to provide new financial increments for Leapmotor, and gross profit and financial performance will continue to improve in 2024.
In the domestic market, Leapmotor has obtained a designated point for the external supply of many core components such as the Great Wall tank battery pack. According to NE Times New Energy data, Leapmotor ranks ninth in domestic passenger car battery pack shipments in 2023, and BMS battery management system shipments rank among the top ten.
This year, Leapmotor has a total of 5 models for the market, and will strive to achieve the sales target of 250,000~300,000 units, of which the proportion of the T03 with a lower price will gradually decrease to 20%, and the proportion of four high-priced products will gradually increase to 80%. For overseas markets, Zhu Jiangming expects sales to reach tens of thousands to 100,000 units in 2025.
"We will still have some losses in 2024, but our goal is to achieve positive operating cash flow; As for profitability, we hope to achieve the company-wide profitability target by 2025 through sales growth and further improvement in gross profit. Zhu Jiangming said.
(This article is from Yicai)
![The forgotten joint venture "good car", 250 horsepower + 8AT, comfortable and easy to drive, but unfortunately not many people understand[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)