Just when Shenlong Company just announced that its cumulative sales from January to September had recovered to 100,000 vehicles, it suddenly encountered a bolt from the blue. On October 18, Stellantis Group's foreign shareholder Stellantis Group CEO Tang Weishi (Carlos Tavares), said that stellantis may adopt an "asset-light" model for brands such as Peugeot and Citroon in the Chinese market. As soon as this statement was made, it caused an uproar in public opinion. Because this means the group may stop production of automobiles in China. Earlier this year, he used the same wording when describing the group's decision to close its only Jeep factory in China.
According to AFP and Bloomberg , Tang Weishi said at the Paris Auto Show: "If we advance the strategy we are taking now, then we don't need to set up factories in China." He said that the company can export cars made in its European and American factories to China, just like Jeep and Alfa Romeo . Tang Weishi said that he is currently negotiating with China's partner Dongfeng on this decision. At the beginning of this year, Stellantis Group and GAC Group's negotiations broke down. The group's Jeep brand withdrew from the domestic array and returned to the era of imported cars. This is the new meaning of the operation of "light assets" that Tang Weishi mentioned.
In addition to withdrawing Jeep, another car brand that had previously planned to return to China, Opel also canceled its return plan. Opel's return was once included in the revitalization plan of Shenlong Auto . According to the PSA Group (before the merger), the group judged that the Chinese market had a special liking for German cars, so it planned to bring it to China in 20014 by Opel Auto , which had withdrawn from the Chinese market, and even proposed a domestic plan at that time.
And on September 17 this year, according to the Frankfurt Report, an Opel spokesperson said that due to the current challenges in the automotive industry, Opel needs to pay more than ever to pay attention to clear priorities - quality, profitability, customer satisfaction and sustainability. Against this backdrop, Opel shelved its plans to enter China. In Tang Weishi's view, the profit principle applies to all processes, whether it is new products, new technologies, new markets, or brand promotion activities such as racing , auto show, and any proposal that does not see the reward is unrealistic.
In fact, Stellantis Group has long been the group's established strategy for implementing the asset light model in China. Previously, on March 1, 2022, the "2030 Strategic Plan" released by Stellantis Group made a marginalized setting for the Chinese market. Interestingly, unlike other multinational automakers who are desperately increasing their investment in the development of new energy vehicles in China, Tang Weishi's new energy focus is the United States and Europe. His plan for the Chinese market is to operate in a light asset model, hoping to improve his business in China by reducing production capacity and relying on the "light asset" strategy.
By 2030, Stellantis hopes that its revenue in the Chinese market will be 20 billion euros, operate six major brands, launch 30 products, and adopt user-centered and innovative distribution methods. In addition, the two major companies in China jointly operated different strategies, increasing their shareholding ratio to 75% on Guangfike, while the Shenlong Automobile adopted a new model - the "two-bedroom and one-living" model, with Peugeot being fully responsible for the foreign party, while Citroen is managed by Dongfeng Motor .
However, Stellantis broke up with GAC shortly afterwards, and Jeep bid farewell to the domestic era. And now, will Shenlong Automobile face such a fate? If the light asset statement was expressed in March, Shenlong Domestic will not change, because when the plan was announced at that time, Stellantis only determined the "two-bedroom and one-living room" model and planned to open Shenlong's factory to third parties to revitalize assets. After the Jeep incident, "light asset operation" has a new meaning. However, Tang Weishi emphasized that cars can be sold in China through the import model, which ultimately determines the definition of light assets.
In recent years, various brands under the Stellantis Group in the Chinese market, including Peugeot, Citroen, Alfa Romeo, Jeep, DS, have performed poorly. Shenlong's sales have recovered to 100,000 vehicles. According to this year's development, the brand may return to the scale of 150,000 vehicles. With the launch of new products, Shenlong Automobile may return to the scale of 200,000 next year - this scale can ensure the basic operation of the two major brands of Shenlong and have the ability to make self-produce. However, if Peugeot and Citroen return to the era of imported cars, this will completely reduce their sales. Moreover, the imported version of Peugeot and Citroen will not be big, and may drop to the era of 10,000 vehicles.
Of course, under this model, Stellantis will not invest too much, but will just ship the car to China for sale. However, in a huge market like China, Stellantis, a top-ranked large group, has lost one after another, and the last brand is not left. The reason may not be the choice of consumers in the Chinese market. Stellantis needs to reflect on its strategy and positioning in the Chinese market, despise a market and a swing strategy, and ultimately lead to its continuous defeat.
The market this year is not good, and under such circumstances, it is not easy for Shenlong to "resurrect" and maintain positive growth for 23 consecutive months. It confirms that its "Yuan+" revival plan continues to take effect. But in the next step, how should the Dragon’s revival be taken? The "yuan" plan released by Shenlong in 2019 mentioned that by 2025, it will strive to increase annual sales to 400,000 vehicles and return to the healthy track. If the company declares the death penalty for as soon as it leaves ICU, it may be a regret and a loss for both shareholders.
