Another new car-making force is on the verge of a desperate situation, and Hechuang Automobile is "defended" by employees

Recently, a picture circulating on the Internet shows that suspected former employees of Hechuang Automobile pulled up a banner in front of the Guangzhou Automobile Center, demanding that Hechuang Automobile return the money they had previously invested.

For the above-mentioned "rights protection" incident, Hechuang Automobile has not yet made a public response. The Economic Observer sent a letter to interview Hechuang Automobile and its shareholder, Guangdong Zhujiang Investment Management Group Co., Ltd. (hereinafter referred to as "Zhujiang Investment Management"), but has not received a reply as of press time.

It is reported that Hechuang Automobile has implemented an employee stock ownership plan in batches from 2018 to 2021, and some employees have previously invested in the company's shares.

Gu Wanguo, who also attended a public event in October 2023 as the vice president of Hechuang Automobile, told the Economic Observer that he had left his job a few months ago and it was inconvenient to comment on the situation of Hechuang Auto. Coincidentally, Duran, who will become the co-president of Hechuang Auto in 2023, told the Economic Observer that she has also left Hechuang Auto.

As a new car manufacturer jointly invested by Pearl River Investment Management and Guangzhou Automobile Group, Hechuang Automobile has finally come to a desperate situation after several years of tepid development. In the past few months, Hechuang Automobile has encountered turmoil such as the management earthquake and the "full sale of cars".

The departure of the founding shareholders and the frequent upheaval of senior executives

The predecessor of Hechuang Automobile was GAC NIO, which was established as a joint venture between GAC Group and NIO in April 2018. In terms of shareholding structure, GAC and NIO each hold 45% of the shares, and the remaining 10% of the shares are held by the founding team to attract talents. Hechuang was originally a brand name launched by GAC NIO in 2019.

Only three years after its establishment, GAC NIO ushered in a great change at the shareholder level. In 2021, GAC NIO completed the capital increase and share expansion, the strategic investor Zhujiang Investment Management became the largest shareholder, GAC followed up the capital increase, but retreated to the second largest shareholder, NIO did not follow the investment, and gradually faded out of management, GAC NIO changed its name to Hechuang Automobile that year. In 2022, NIO officially withdrew from the ranks of shareholders of Hechuang Automobile.

When Zhujiang Investment Management took over, the situation faced by Hechuang Automobile was not optimistic. In May 2020, the first mass-produced model of Hechuang Automobile, the Hechuang 007, which is a medium-sized pure electric SUV priced at 259,800-400,000 yuan, began to be delivered, and the market performance of the car was less than expected.

Subsequently, the company began to significantly lower its posture. In August 2021, the second mass-produced model of Hechuang Automobile, the Hechuang Z03, was launched, with a price of only 132,800-168,800 yuan, coming to the compact pure electric SUV market of about 150,000 yuan. With the support of the Z03, the sales volume of Hechuang Automobile has increased from less than 3,000 units in 2021 to more than 20,000 units in 2022.

Before 2023, the management team of Hechuang Automobile is relatively stable. In 2018, Liao Bing, then assistant to the president of GAC Research Institute, was transferred to GAC NIO as the company's CEO. In 2021, Yang Ying, the former deputy general manager of GAC Passenger Vehicle (Hangzhou) Co., Ltd., was transferred to the position of co-president of Hechuang Automobile.

In 2023, the company will change its thinking and appoint Duran, a non-automotive industry person, as the co-president of the company. Duran's career has focused on artificial intelligence, and she was a senior vice president of iFLYTEK Co., Ltd. It is reported that under the recommendation of Duran, Hechuang Automobile also appointed Ma Shanshan, Gu Wanguo, Yue Peng and others to be responsible for the marketing or sales business of Hechuang Automobile that year. But all four, including Duran, left in a hurry within half a year of taking office. "For Hechuang Auto, management turmoil can lead to strategic instability and impaired business continuity, as well as internal communication and trust within the company, as well as the company's relationships with other partners." Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, told the Economic Observer.

From 2022 to 2023, Hechuang Automobile has successively launched the coupe model Hechuang A06 and the MPV model Hechuang V09. With four models, Hechuang Automobile will sell less than 20,000 units in 2023, becoming one of the brands that are gradually falling behind in the new energy vehicle market.

Two "backers" can't support one brand

"The layout of Hechuang Automobile covers the three mainstream markets of SUVs, sedans and MPVs, showing its comprehensiveness and forward-looking product planning, but Hechuang Automobile has not created a popular model, which reflects the lack of differentiated competitiveness of its products and low market acceptance." Huang Sheng, an expert in industrial economics, told the Economic Observer.

As the major shareholder of Hechuang Automobile after 2021, Pearl River Investment Management is a private enterprise group engaged in energy and infrastructure investment, although the scale of the enterprise is not small, but there are not many resources in the automotive industry. Therefore, in terms of products and production capacity, Hechuang Automobile is more dependent on the resources of GAC Group, the second largest shareholder.

From the product point of view, Hechuang 007 and Hechuang Z03 are aimed at the hot new energy SUV market segment, but both models are born from GAC's technology platform, the former is similar to Aion LX, the latter is similar to Aion Y, and at the same time, it is not more advantageous than GAC Aion's two models in price.

The V09 has gotten rid of the shadow of GAC Aion in terms of design, but the new energy MPV market has limited capacity and fierce competition, and the V09 needs to face many strong competitors such as Denza D9, Xpeng X9, and VOYAH Dreamer in the price range of 300,000 to 400,000 yuan.

Zhan Junhao, founder of Fujian Great Aim Brand Positioning Consulting, told the Economic Observer: "From the original GAC NIO to today's Hechuang Automobile, it has been tepid for so many years, and there are many reasons. Among them, the more critical point is that the brand image of Hechuang Automobile is not clear enough, and consumers' awareness of the brand is insufficient. ”

In fact, Hechuang Automobile has not taken many actions in brand communication, but it has not built a unified and stable brand image. In August 2022, the press conference of Hechuang A06 was full of e-sports "tide culture" elements. At that time, Yang Ying told the Economic Observer that Hechuang Automobile would use Guoman, e-sports and other two-dimensional culture to improve brand voice and link more young consumers.

The most direct factor in the relationship between Hechuang Automobile and e-sports is that Pearl River Investment Management has many layouts in the field of e-sports. It is understood that as the actual controller of Pearl River Investment Management, Zhu Yihang founded the EDG E-sports Club, which is one of the most powerful comprehensive e-sports clubs in China.

However, at the listing event of the V09 in 2023, the marketing style of the company quietly changed, and it announced the establishment of the "Unicorn Youth Entrepreneurship Fund". Duran told the Economic Observer at the time that the company wanted to provide mobility services for young strivers and entrepreneurs. At present,On the product page of the official website of Hechuang Automobile,There are almost no two-dimensional cultural elements such as Guoman and e-sports。

If you fail to save yourself, who will lend a hand

In the face of sluggish sales, Hechuang Automobile did not sit still. In March this year, a netizen on a domestic social platform whose authentication information is an employee of Hechuang Automobile broke the news that Hechuang Automobile launched a program called "In-store Assistance", and employees of various departments of the company were arranged to sell cars in stores, which caused strong dissatisfaction among employees.

Since the beginning of this year, Hechuang Automobile has no longer taken the initiative to announce sales data. According to data from the automotive information platform Pacific Automobile, from January to May, Hechuang sold 3,135 vehicles, of which only 196 were sold in May.

Recently, it was reported that the management of Hechuang Automobile has informed the company's employees that only the basic salary part of the May salary paid in June will be guaranteed, and five social insurances and one housing fund will be guaranteed, but the payment of wages in June is no longer guaranteed, and employees need to "find their own way".

It is worth noting that the "rights protection" behavior of the former employees of Hechuang Automobile in the online pictures is in front of the GAC Center. Will GAC Group come to the rescue of Hechuang Automobile?

In February 2023, the board of directors of GAC Group deliberated and passed the "Proposal on the Capital Increase of Hechuang Automobile", and director Guan Dayuan objected to the proposal and voted "abstaining", becoming the only one among the 11 directors who did not vote "yes". Guan Dayuan believes that there is uncertainty in the future development of Hechuang Automobile, and it is recommended to invest cautiously.

At GAC Group's 2023 annual results briefing in April, more than one investor suggested that GAC Group "deal with Hechuang Automobile as soon as possible". In this regard, Feng Xingya, general manager of GAC Group, said that the company will consider it as a whole in combination with the overall development strategy.

From "all employees selling cars" to employees "protecting their rights", the series of turmoil encountered by Hechuang Automobile this year is similar to the drama staged by WM Motor and Gaohe Automobile that have collapsed. Whether Hechuang Automobile will follow in the footsteps of Weimar and Gaohe, or usher in a new turnaround, may take some time to know.