Source of this article: Times Finance Author: Zhang Xu
After seven months of negotiations, equity closings and regulatory approvals, Leapmotor International B.V., a joint venture between Leapmotor and Stellantis Group, was officially established on May 14.
The picture is from Leapmotor.
Headquartered in Amsterdam, the Netherlands, Stellantis Group and Leapmotor hold 51% and 49% of the shares respectively, with Zhu Jiangming, founder, chairman and CEO of Leapmotor, serving as chairman, and Stellantis Group appointing Xin Tianshu as CEO of Leapmotor International.
It is worth noting that Leapmotor International is the first reverse joint venture in China's automotive industry, and the cooperation model between the two parties is that Leapmotor provides product technology and Stellantis Group provides global market resources and influence. As the parent company of Maserati, Stellantis is expected to achieve same-store sales of the Leap brand and Maserati in the future.
"Leap International should be profitable in the first year"
The day before the establishment of Leapmotor International, Tang Weishi, the global CEO of Stellantis Group, appeared at the headquarters of Leapmotor in the C16, which caused a lot of speculation from the outside world. However, judging from the statements of both sides, the C16 may not be sold in Europe as the first model.
At the press conference, Zhu Jiangming said that the first international products of Leapmotor are Leapmotor C10 and T03, and at least one new car will be launched every year for the next three years and sold overseas. Among them, the C10 is a B-segment model that is mainly positioned as a family car; The T03 is an A00 class smart pure electric vehicle suitable for urban use.
Zhu Jiangming revealed that in the next three years, Leapmotor International will launch four more cars one after another, and it is expected to launch Class C cars codenamed A12 and A03 in the first quarter of next year, and then continue to launch new models codenamed T05 and T11. "We will also complement other subdivisions in the future, and eventually the sales distribution of automobile products will become spindle-shaped, and vehicles with a price of about 100,000 yuan should be the best-seller."
Leap International Product Planning.
From the perspective of positioning, Renault Dacia Spring will be one of the main competitors of Leapmotor T03. The car is built on the CMF-A platform, and the models using the same platform include the Dongfeng Fengxing T1 EV and the Venucia e30, and the Renault Dacia Spring, which costs about 20,000 euros, is known as the "Wuling Hongguang MINI EV in Europe" due to its low purchase threshold. In comparison, the Renault Dacia Spring has a WLTP range of about 220 km, while the Leapmotor T03 has a WLTP range of up to 265 km and is equipped with Level 2 driver assistance functions.
The Leapmotor C10 is the first global model based on the Leapmotor Clover technology architecture, with technologies such as central integrated electronic and electrical architecture, CTC battery and chassis integration, and a WLTP range of 420 kilometers.
According to the plan, in September this year, the two models will be sold in France, Italy, Germany, the Netherlands, Spain, Portugal, Belgium, Greece and Romania in nine European markets, and by the end of the year to expand to five continents around the world. In the next three years, Leapmotor International will launch at least one new car for overseas sales every year.
It is worth noting that in the cooperation between Leapmotor and Stellantis Group, the former will continue to play a leading role in technology research and development and provide internationally competitive products within the joint venture, while the latter will empower Leapmotor International through its overseas marketing network, sales, after-sales service, auto finance, logistics network and other aspects.
In the eyes of industry insiders, under such a model, Leapmotor does not need to establish a large number of overseas sales channels and production bases, and can occupy the market at a faster speed. With a 51% stake in the joint venture, Stellantis Group can leverage its policy advantages and market awareness in overseas markets to meet the compliance requirements of different regions and avoid the policy risks of Chinese electric vehicles in some markets.
Tang Weishi revealed that for the European market, Leap International is equipped with a full-time team, 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, he said that the KPI set for the Leap International team is: to achieve profitability in the first year.
Scale and parts supply have become new growth points
For Leapmotor, which focuses on "cost performance", scale can effectively reduce costs and further improve gross profit margin. According to the financial report, in 2023, Leapmotor will deliver a total of about 144,000 new vehicles, and the gross profit margin of automobiles for the whole year will be 0.5%, achieving a positive gross profit margin for the first time.
For Stellantis, the search for sales growth is also one of its goals for the joint venture. "Economics is the primary issue Stellantis faces in the global expansion of electric vehicles, and Leapmotor International can help this traditional multinational automotive group that is transforming to accelerate the launch of cost-effective electric vehicle products," said Tang. ”
Leap C10.
Stellantis will invest more than 50 billion euros in electrification to achieve its "Dare Forward 2030" strategic plan for electrification: 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.
Regarding the overseas sales target, Zhu Jiangming explained: "All our EU certifications will not be completed until the third quarter, so only the fourth quarter is responsible for sales, and we hope to achieve sales of 6,000 to 10,000 units this year, and the focus is still on 2025." ”
According to its previous statement, Leapmotor aims to sell 500,000 vehicles outside the Chinese market by 2030. In addition, the external supply of parts and components is also expected to provide new financial increments.
At the press conference, Zhu Jiangming pointed out that the establishment of Leapmotor International Joint Venture Company can help the development model of Leapmotor as a "Tier1 supplier". "Leapmotor has accumulated a lot of technology through 9 years, and sold some of our core electronic components to Stellantis and other OEMs, which is also a branch of Leaprun in the future."
At present, Leapmotor is negotiating with other OEMs to enter its supply chain system. "Leapmotor will take advantage of more opportunities to play to its advantages. Because Toyota gave us a good example, parts are a very big source of income, and they are also a good direction. Zhu Jiangming said.
Wu Qiang, co-president of Leapmotor, previously revealed at the earnings conference that Leapmotor has the ability to share its technology with the outside world when seeking overseas development and mass opportunities, such as institutions in the Middle East, Europe and other places that hope to carry out technology research and development, cooperation and sharing with Leapmotor. "The gross profit brought by technical cooperation will be much higher than that of selling cars, and Leapmotor will increase the gross profit margin to 20% through the construction of multiple strategic dimensions and business models."
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 its gross profit and financial performance will continue to improve in 2024.
Zhu Jiangming expects that there will be some losses in 2024, and the goal is to achieve positive operating cash flow. "With volume growth and further improvement in gross profit in 2025, we expect to achieve our company-wide profitability target in 2025."
It has not yet been decided whether it will be produced in Europe
Leap is accelerating its overseas expansion, and other Chinese car companies are also speeding up the pace of going overseas, among which setting up factories overseas to bypass barriers such as tariffs has become a common choice.
At the 2024 Beijing Auto Show, Xpeng noted that it is considering investing in factories or suppliers in Europe to address possible challenges due to concerns about the EU's launch of a countervailing investigation into Chinese-made electric vehicles and regulatory changes, coupled with the potential risk of rising tariffs.
When Xpeng Motors considered building a factory in Europe, some car companies had already implemented the factory construction plan. BYD's first new energy vehicle plant in Europe officially landed in Hungary in December 2023, with an investment of billions of euros to produce electric vehicles and power batteries.
Chery, on the other hand, has adopted a joint venture with Ebro Electric Vehicle of Spain to acquire Nissan's former production base in Spain to produce electric vehicles locally.
Previously, it was reported that Leapmotor will cooperate with Stellantis to use Leapmotor's technology platform to produce small electric vehicles at Stellantis' Tihei factory in Poland.
In this regard, Tang Weishi said that the Leapmotor models that entered the European market in September will still be implemented in the export mode, and whether Leapmotor International will achieve localized production in Europe has not yet been finalized. At the same time, he emphasized: "Different countries have different customs tariffs, so how to avoid them ultimately depends on the different situations of each country, and the best strategy must be formulated." ”
As for the export of China's new energy vehicles to Europe, Tang Weishi said: "The cars we produce by purchasing parts in China are very efficient in economic cost, which means that we can compete with other Chinese new energy vehicle manufacturers in the European market, which is our current idea." ”
In addition, the two sides did not explicitly respond to the media on the issue of pricing. As for where the follow-up products will be produced and how to plan the production line, Tang Weishi admitted that there is no very specific guidance for the time being, and Stellantis will discuss and make a final decision with Leaprun International in a "very practical" way.