Japan's wildly rising Korean team warms up Dongfeng’s joint venture with a full recovery

Although the development of independent brands has now become the focus of major state-owned auto groups, the performance of the joint venture, which is also supported by profits, is also the lifeline that can't be ignored by various auto groups.

For Dongfeng Motor's chairman and party committee secretary for two years, Yan Dongfeng, Dongfeng Motor's own plate trend is gradually clear, but the performance of the joint venture plate has a greater deviation. To this end, in the case of joint ventures, in the first half of this year, after large-scale personnel adjustments by BAIC, GAC, Nissan and Mitsubishi, Dongfeng Motor also conducted a large-scale high-level "exchange of blood."

After a series of personnel adjustments, the Dongfeng Group’s joint venture segment performed well in September, except for Shenlong Automobile, which is still in the depth adjustment stage. Others include Dongfeng Nissan, Dongfeng Honda, Dongfeng Renault and Dongfeng Yueda. Companies such as Kia are showing different degrees of sales growth or recovery.

Some industry analysts said that although the adjustment of Yan Yanfeng was mainly aimed at boosting the vitality of the independent sector, it was apparent that the Dongfeng Group’s important source of profit-making joint ventures did not relax. After several large state-owned auto groups have entered into deep adjustments, the performance of Dongfeng Group, which has the largest number of joint venture brands, has almost become a barometer of the performance of joint venture brands in China.

The joint venture was dragged by Shenlong

Although the primary task of Yan Yanfeng after being transferred to Dongfeng Group was to boost the performance of the Dongfeng Group's independent segment, Dongfeng Motor, which has the largest number of joint venture projects, is also an important part of the overall performance of the entire group.

According to the financial report for the first half of 2017 issued by Dongfeng Motor Group on August 28 of this year, it can be seen that the Dongfeng Motor Group’s sales volume of autonomous commercial vehicles is on the one hand leaping ahead; on the other hand, the sales volume of joint venture Shenlong’s sales falls down and drags down the passenger vehicle segment. The hind legs led to a sharp drop in passenger car revenue.

Dongfeng Motor Group Chairman and Secretary of the Party Committee Yan Yanfeng pointed out in his analysis that in the first half of the year, the Chinese automobile market as a whole showed the characteristics of a slowdown in growth and differentiation, mainly reflected in the overall downturn in the passenger car market and the higher growth rate of commercial vehicles. The trend of consumption upgrade is obvious, and the segmentation of passenger car segments has differentiated; joint venture brands have performed differently, independent brands have developed rapidly, market competition has intensified, terminal prices have fallen sharply, and corporate earnings have been greatly affected.

For Dongfeng Motor Group, profit growth in the first half of the year was due to Dongfeng Commercial Vehicle Co., Ltd., Dongfeng Liuzhou Automobile Co., Ltd. business growth, Dongfeng Motor Group sales of commercial vehicles increased 48.7% from the same period last year (for 20.135 billion yuan) to 299.49 100 million yuan. The passenger car segment, especially the joint venture segment, was subject to a decrease in revenue. In the first half of the year, sales revenue decreased by RMB 26.3 billion to RMB 26.16 billion from RMB 35.79 billion in the same period of last year, representing a decrease of approximately 26.9%.

Therefore, when Yan Yanfeng recruits troops for self-employment, it also needs to make reasonable personnel arrangements for the joint venture. After all, Dongfeng Motor’s autonomous plates are numerous and scattered. Although the Dongfeng Fengshen of the main force is in the ascending period, it is difficult to be a single player in a short time.

After Yan Yanfeng’s personnel adjustment in the first half of this year, the main joint ventures of the Dongfeng Motor Group began to show new vitality. The sales of Dongfeng Nissan, Dongfeng Honda, and Dongfeng Yueda Kia, the main joint ventures of the Dongfeng Motor Group, to varying degrees. As for the recovery trend, Shenlong Motor's sales performance is flat as senior executives are still adjusting and belong to the small product year for a new generation of product changes. Overall, the Dongfeng Motor Group's joint venture segment began to show signs of a stable recovery. The original profit cows Dongfeng Nissan and Dongfeng Honda continued to strengthen. The troubled Dongfeng Yueda Kia and the growing concern Dongfeng Renault have a new improvement.

Japanese joint venture continues to strengthen

As the most important sales volume of Dongfeng Motor Group, Dongfeng Nissan’s contribution to sales is self-evident.

According to data provided by the Dongfeng Nissan official to the Times Weekly, just after the end of September, the wholesale volume and terminal sales of the Dongfeng Nissan Automobile exceeded the 100,000 mark. Dongfeng Nissan has sold a total of 614,000 units from January to August this year, completing 60% of the annual target.

Among them, the Dongfeng Nissan and Qichen dual-brand terminal units sold 102,900 units in September, a year-on-year increase of more than 30%, and the number of wholesales exceeded 110,000 for the first time; from January to September 2017, the cumulative terminal sales volume was 772,000 units (including imported vehicles), which represented a year-on-year increase of 11.4. %, of which the Nissan brand sold 92,508 units in September, an increase of 32.6% year-on-year.

The Dongfeng Nissan Market Department official told the Times Weekly that he was confident that the sales target of 1.08 million units scheduled for the beginning of this year would not be ruled out.

Since the beginning of 2015, Dongfeng Nissan has started the strategy of “Young Nissan” brand rejuvenation. Today, it has entered the YOUNG NISSAN 3.0 era and has evolved from age to attitude, from technology to value, and from contact to experience. From the sales in September, it can be seen that Dongfeng Nissan’s brand is younger, and its products, technologies, services, marketing and other aspects are fully upgraded, so that it ushered in new sales growth.

Dongfeng Honda, another important joint venture brand of Dongfeng Motor Group, performed equally well. After the new models such as the Tenth Generation Civic and the new CR-V were successively listed, Dongfeng Honda's sales continued to rise this year. Times Weekly reporter learned from the Dongfeng Honda official that in September just ended, sales of Dongfeng Honda Terminal exceeded 74,000 units, an increase of 29.3% year-on-year. The new CR-V, just listed, achieved a sales volume of 21,000 units in a single month, while the new Civic grew by more than 50% year-on-year.

Dongfeng Honda Motor Co., Ltd. accumulated terminal sales of 517,021 vehicles from January to September this year, a year-on-year increase of 27.3%. Based on the brand's "adjustment of production plans based on orders", Dongfeng Honda's dealers had an inventory factor of zero in September.

Dongfeng Honda's public relations department told Time Weekly that this year it will challenge more than 700,000 sales targets.

It is reported that Dongfeng Honda's third plant will be officially completed and put into operation next year. The new annual production capacity of 240,000 vehicles can further supplement market demand, while the flexible production platform can meet the co-manufacture of cars, SUVs, MPVs, and new energy models.

Some industry analysts commented that Dongfeng Nissan and Dongfeng Honda each have different focuses, and Dongfeng Nissan is mainly responsible for the growth in sales volume, while Dongfeng Honda is pursuing the increase in profit as the two most important joint ventures under the Dongfeng Motor Group.

Kia and Renault begin to warm up

The Dongfeng Yueda Kia brand, which was originally also used as a supplement to sales growth, suffered from a continuous market cold weather. This year's market performance was even worse than the predicament of the company.

According to official data, Dongfeng Yueda Kia sold a total of about 130,000 vehicles in the first half of this year, which is a 55% drop from the 285,600 vehicles sold in the same period of last year. The reason is that in addition to well-known objective factors, the Korean brands used to The successful development of several years, such as brilliant design, the main cost-effective, and the pursuit of pressure on inventory and other means, in the targeted attack of independent brands and Japanese brands under the gradual loss of advantage, this is the important reason for the sales of KIA.

Dongfeng Yueda Kia has made a series of adjustments to this year's situation. From the personnel and management methods to the attitude, although it may be difficult to restore to the previous full-height within a short time, the downward trend has improved.

In this regard, Dongfeng Yueda Kia Communications Minister Ji Tongshun told the Times Weekly reporter that Dongfeng Yueda Kia sold in China in September for 40003 units, which was more than 70% higher than in August 2017. This year due to well-known reasons, the current sales task for the year does not determine how much it will eventually complete. The monthly indicators are also based on actual conditions. "Basically, the target for the completion of the month will prevail. Now it is basically achieved."

Some industry insiders pointed out that Dongfeng Yueda Kia is a selling point of the Korean brand in terms of value and cost-effectiveness. When the value of its own brand is comparable with that of the Japanese joint venture, its survival space is squeezed. It is already a foregone conclusion. Kyodo Kia wants to restore its strength and strengthen its own quality.

Dongfeng Renault, a rising star of the Dongfeng Motor Group, has performed well this year. The Times Weekly reporter learned from Dongfeng Renault official that due to the excellent performance of domestic double cars, the accumulated sales in the first three quarters of the year reached 53,454, and the full-year booking was completed. More than 80% of sales target.

In September, Dongfeng Renault sold a total of 6,566 new cars, a 35.9% increase from the previous quarter. At the same time, Dongfeng Renault will officially introduce the sedan into the car next year. It is reported that the Dongfeng Renault passenger car project approved by the National Development and Reform Commission at the end of 2013 was not included in the sedan products. Therefore, the precondition for Dongfeng Renault to apply for car production qualifications to related departments is that it must achieve an annual revenue of RMB 1 billion within 3 years of production. This poses a certain risk to Dongfeng Renault in a short period of time, and it is also an internal cause to encourage Dongfeng Renault to quickly promote SUVs.

Some analysts pointed out that although the performance of French cars has not been considered mainstream in China, Renault Renault, which has the endorsement and support of the Japanese product brand, should have a better market outlook than the relatively stubborn PSA.