Text丨Meng Juntao
Edit丨Yuan Guiyuan
"In the global target market, Yulong will use the model of cooperation platform with Foxconn for production, including the mainland Chinese market."
Ten years of ups and downs, Dongfeng Yulong is the first automobile manufacturer on both sides of the Taiwan Strait to position itself as a independent brand in Greater China and integrate vehicle research and development, production, sales, and after-sales service in the entire value chain, but it has not been able to withstand the test of the market and continue to overcome obstacles in the mainland.
In fact, it should have been expected that when a car has only jokes, black materials, only jokes, but no strength, and when it is on the hot searches of the news, it is probably clear that this brand has not gone far. At least Sinopec really lost its best partner this time, and the Chinese automobile circle also lacks a humorous joker Nazhijie .
Dongfeng Yulong's last resort
June 18, when I was still hesitating whether to participate in the shopping festival without any discounts, a message suddenly popped up in the notification column, "According to the latest news from the Taiwan Central News Agency, Taiwan Yulong Group has reached a preliminary consensus with Dongfeng company, and its Nazhijie brand will soon officially withdraw from the mainland Chinese market."
Although this news has not been officially confirmed yet, recalling the delisting of his brother Dongfeng Renault in April this year, the scenario of delisting of Dongfeng Renault is almost the same: Dongfeng Renault also reached an agreement with Dongfeng Motor to transfer its shares held in Dongfeng Renault to Dongfeng Motor, Dongfeng Renault stopped the business activities related to the Renault brand and announced its withdrawal from the Chinese market.
In the past ten years, compared with Dongfeng Renault, it is not easy for Nazhijie as a brand that even used car dealers to survive until now, especially in the "418" resolution to deepen the reform of independent brands passed by Dongfeng Group in 2017, Dongfeng Group has adopted a policy of "withdrawing people and not withdrawing investment" against Dongfeng Yulon. We will not discuss whether Dongfeng Company is determined to integrate independent brands, give full play to whether it is a market-driven or sales channel, and the pressure to force it to "slim down". Dongfeng Group's new management method and new ideas for reforming business units is drastic and effective.
National Passenger Car Association data shows that sold 7 vehicles in May 2020, and the cumulative sales from January to May were only 43 vehicles. As the "hind legs" of the entire enterprise, Dongfeng Yulon is better off surviving by cutting off his arms than storing necrosis.
No matter how many dividends Dongfeng Yulon enjoyed when it was established, the high fuel consumption, no strong product technology research and development system was built, and other factors such as the slow promotion of basic product technology are the main reasons why it was abandoned by consumers.
market competition is extremely fierce, which has accelerated its disappearance.
If you still have an impression, you should still remember several major events in the automotive circle "retreatment": Dongfeng Renault announced that it would stop Renault brand-related business activities in the Chinese market; Changan and PSA Group sold 50% of Changan Peugeot Citroen Automobile Co., Ltd. respectively; earlier, Suzuki Auto transferred its shares in Changan Suzuki at one yuan price and withdrew from the Chinese automobile market. Now Dongfeng Yulon's withdrawal from the Chinese market is undoubtedly a further proof that the probability of third-tier joint venture brands survival is getting smaller and smaller.
The market itself shows a "28" effect. If you look at the list of top 15 sales in recent years, there is almost no major change. The overall market share of , especially the top five brands, has increased from 35% to 38%, with the middle five basically unchanged, while the market share of the last five is declining year by year. Therefore, for second-tier/third-tier joint venture brands, it is easy to imagine the difficulty of seizing the upward gap between the independent brand and the downward trend of first-tier joint venture brands, especially now that the Matthew effect has long been formed between car companies.
We admit that China is the most huge and complex market in the world. No country has ever had hundreds of car brands at the same time. However, with the dimensionality reduction of first-tier brands, independent brands or second- and third-tier automobile joint venture brands are slowly dying or delisting. Instead of waiting to be delisted or destroyed, Dongfeng Yulon seems more like he has taken the initiative to embrace change.
After all, no matter whether it is Dongfeng or Yulong, you can stop the loss in time if it is broken.
Guo Taiming's hit-and-out
In fact, whether it is Dongfeng Yulon or any car company's delisting, there are three reasons: first, sales decline, poor production capacity; second, there is no core technology, lack of quality awareness, and the product does not have competitive advantages; third, the market, profit, and future trade-offs.
is essentially a failure, out of control and failure of the company system.
So compared to why Dongfeng Yulong delisted, I am still more curious about the cooperation between Yulong Group and Terry Gou.
Previously, in the face of delisting rumors, Yulon's official response said that Yulon Group continues to transform towards an open platform strategy; independent brands have also readjusted their strategies, among which the market strategy adjustment is being discussed with shareholders in the future; after asset loss, Nazhijie continues to develop in the open platform with Hon Hai joint venture in the form of light assets in the future.
Maybe everyone has no intuitive impression of Hon Hai Group , but the president and chairman of Hon Hai Company is Terry Gou. Who is Terry Gou? Founder of Foxconn! Before seeing this news, I didn't quite understand why Terry Gou, whose annual revenue is nearly 900 billion yuan, wanted to cooperate with Yulon. After learning about
, I realized that as a typical grassroots entrepreneur, Terry Gou also has a car dream. This dream sprouted in 2008, and has been deeply rooted in 2014.
In 2008, due to technical failures, an internal letter from Foxconn leaked, which pointed directly at the rival company BYD . In the letter, Guo Taiming said that he would "punish" BYD. In fact, the so-called "punishment" is normal business competition regardless of whether it is executed or not. Moreover, BYD did not make any statement at that time. The matter should come to an end, but the stock god Buffett bets on BYD.
Who is Buffett? Guo Taiming was very upset at the time when he was considered a stock god in the industry who turned into gold. You should know that In 2008, BYD's annual turnover was RMB 8.555 billion and its net profit was RMB 766 million. At that time, Foxconn's annual income was US$927.1 million and its net profit was US$121 million (about RMB 840 million).
Guo Taiming really couldn't stand Buffett's choice of BYD, which was smaller than himself, so he sued BYD in court on the grounds of "stealing commercial information", and even threatened to buy stocks to question why Buffett invested in BYD, which steals Foxconn's business secrets.
But as a result, Terry Gou's lawsuit was rejected. In fact, looking back at the entire "Foodby case", no matter what the specific reason for Buffett's choice of BYD, it is definitely likely to benefit from Wang Chuanfu 's own ability and BYD's profound battery manufacturing technology. This is why, even though BYD performed poorly in several years later, Buffett insisted on supporting BYD: "We have never considered selling BYD's shares."
Personal speculation, it was roughly at that time that Terry Gou formed a bond with BYD and witnessed the rapid growth and expansion of the "plagiarism" BYD to become a leader in China's new energy vehicles. Terry Gou realized the importance of technology and saw a bright future for the automobile manufacturing industry, so he also began to ride the policy dividends and began to invest in the automobile industry.
So you will see that in early 2014, a spokesperson for Hon Hai Group (a subsidiary of Foxconn Group) said at a press conference that in the field of new energy vehicles, Foxconn's R&D business group has the world's leading "research and development, testing and verification, system integration and all-round solution of core and key components", revealing its intention to electric vehicles; at the end of December 2014, Foxconn invested in Harmony Automobile with HK$600 million, and Terry Gou's "Creation Dream" was officially implemented; on March 23, 2015, Harmony Automobile and Foxconn and Tencent signed the "Strategic Cooperation Framework Agreement on "Internet + Smart Electric Vehicles" in Zhengzhou, and Foxconn, Tencent and Harmony Automobile invested US$1 billion at a ratio of 3:3:4, and "Harmony Futeng" was born.
But unfortunately, since July 2015, Harmony Futeng has been in a dilemma of "litigation for arrears of huge loans." Terry Gou and Foxconn are too eager to obtain production qualifications, but are restricted everywhere in the harmonious car manufacturing strategy. So on December 8 that year, at the Guangzhou "Xiaomian Yao" Technology Conference, Terry Gou expressed his feelings that "any industry plus the Internet of Things will become the Internet, but on the other hand, it is not easy for the Internet to be manufactured."
Although the "harmonious and prosperous" car manufacturing journey of "Harmonious and Futeng" has made Terry Gou determined not to enter the field of vehicle manufacturing, it has further strengthened Terry Gou's determination to enter the automotive industry. After abandoning Harmony Futeng's car manufacturing plan, Terry Gou focused his attention on the research and development and production of electric vehicle charging devices, multi-functional converter connectors and lithium batteries.
In June 2016, signed a "Comprehensive Deepening Strategic Cooperation Agreement" with the Kunshan Municipal Government, planning to invest 25 billion yuan to focus on the research and development and production of charging devices and lithium batteries; in October, Foxconn and venture capital company IDG Capital plan to invest US$1.5 billion to establish an automobile technology fund.
In fact, since 2016, the ranks of the car-making army have been expanding. According to incomplete statistics, there were more than 90 new car manufacturers in China at that time, which is what we have always called new forces car manufacturers. Guo Taiming, who suffered losses, set his sights on the new forces in car manufacturing.
I have to say that Terry Gou does have a plot for the automotive industry. On December 16, 2017, when NIO's first mass-produced car, ES8, was launched, Terry Gou had a two-hour secret talk with Li Bin . Of course, everyone knows the result. By the way, NIO is indeed "miserable". Just as its service is wholeheartedly like a "warm man", consumers will only say: You are very good, but I choose Tesla.
Guo Taiming is the same, but he invested his money to Xiaopeng Motors , which was born one month later.
On February 24, 2018, Foxconn Group Chairman Terry Gou personally visited the R&D headquarters of Xiaopeng Motors and participated in the test drive wearing Little Red Riding Hood. Xiaopeng Motors’ official Weibo said this is the most heartwarming "starting profit" in 2018!
At that time, regarding Guo Taiming's journey to build cars again, Xiaopeng Motors' chairman He Xiaopeng said: "I can't say much about Foxconn's withdrawal from Harmony Futeng before, but this is a very fantasy story and I have seen some problems. Manufacturing is a very long process."
Compared with the previous turbulent momentum, Guo Taiming's cooperation with Xiaopeng Motors seems particularly quiet. Just after we all thought that Terry Gou was really going to wait for profit as a behind-the-scenes investor this time, Terry Gou threw two more bombs into the car circle in this special year in 2020.
After announcing its cooperation with Fiat Chrysler (FCA) at the end of January 2020, it announced on February 7 that it signed a cooperation agreement with Yulon Auto . In the future, it will establish a joint venture with a total capital of NT$15.576 billion. Hon Hai invested 7.944 billion in cash, accounting for 51% of the shares, and Yulon invested 7.632 billion in open platform assets, accounting for 49%. The new joint venture will combine the development of Huachuang Automobile Electric Vehicle Technology under Yulon and Hon Hai's manufacturing and design capabilities in electronic components to give full play to its complementary resources and jointly develop automobile-related businesses.
Guo Taiming is now FCA in the left hand and Yulon in the right hand, which also means that Foxconn's transformation and upgrading electrification campaign has been fully launched.
Yulon's Way Out
As a car brand with a history of nearly 70 years, as a traditional car, Nazhijie does rarely have the core competitiveness. In addition to its solid appearance, its performance in materials, configuration or engine performance is average, but this does not prevent it from entering an electric car. Yulon has long wanted to transform, but it has suffered from no opportunity.
So in 2005, Yulon established Huachuang Car Electric. At that time, electronics industry operators including , Quanta , Hon Hai, etc. expressed their willingness to participate, but in the end, the plan was terminated due to disagreement of ideas.
(Huachuang Car Dial logo meaning)
But this time Dongfeng Yulong withdrew from the mainland market. In 2019, Yulon promoted the transformation of the value chain strategy. Huachuang Car Dial's automobile R&D platform adopted an open model, transforming from the past "single customer, heavy asset" to a new direction of "full open and diversified customers".
Huachuang Automobile 15 years after its establishment, it also reached a critical period of transformation. Yulon once again "paied" and was planning to make a difference in the automotive industry. This matched the two companies. After the failure of entering the entire vehicle, Hon Hai reflected on it. Liu Yangwei, chairman of Hon Hai Group, once said: "The automobile market and industry have entered the fast lane of transformation, and it is a general trend to design vehicles through platform-based models. Hon Hai hopes to use the successful experience in the communications industry in the past to create a new IDM (Integrated Device Manufacture) business model for the automobile industry."
In fact, it is not a new thing for bigwigs to enter the automobile circle, including Xu Jiayin , Dong Mingzhu, and Jia Yueting. In addition to interests, the most essential driving force for entering the automobile circle may be more or less a true love for cars. There is a kind of automobile plot, such as Xu Jiayin.
But Terry Gou’s “plot” may be different. He also has a “war” meaning against BYD, and Foxconn is no longer satisfied with just OEM. After all, all companies are currently moving towards electrification, just like BYD back then, Terry Gou also has his own little plan.
Looking back, it is accidental and inevitable that Yulong and Hon Hai will establish a joint venture. As the best car company in Taiwan, Yulon is also in Taiwan and has always had natural technological attributes. Whether it is the first time to get the moon, or Terry Gou needs a traditional car company as the technical endorsement, they are all facing changes and explore the possibility of cooperation in an uncertain era.
And in terms of brand image, Foxconn's "favorite review" is not very good. In the traditional public impression, Foxconn is nothing more than an OEM factory for digital products such as Apple, , Huawei , and Xiaomi mobile phones. A little more stereotyped, that is, the "human-eating factory" caused by high-intensity work pressure, which causes employees to strike and jump off buildings.
And Yulon is not bad either. Yulon Group has many years of experience and resources in R&D, design, production and manufacturing of automobiles, and has invested in open platforms and R&D resources and technologies for future development trends of the automobile industry such as new energy vehicles, Internet of Vehicles, and autonomous driving.
So when it comes to all the big guys entering the automotive circle, I am also optimistic about Terry Gou. Compared with Xu Jiayin's shopping, Terry Gou has his own considerations and plans, because Terry Gou, who comes from the manufacturing industry, knows very well what he is better at. His cooperation with FCA and Yulon is also responsible for product design, component research and development, and supply chain management, and does not participate in the process of automobile assembly. And it focuses on electric cars, and hopes to have a more possibility of rising than building traditional cars.
After all, from the perspective of Nazhijie alone, it is really not very good as a fuel car, but it is not impossible to change the track. Just like Dongfeng Renault gave up fuel vehicles and transformed into electric vehicles, on the electric vehicle track, everyone rounded up or was at the same starting line, and the threshold was not too high. Whether Dongfeng Yulon cut off his arm to survive, stop losses in time, or wants to enjoy the market dividend again, although the transformation is not the best time, it is not too late.
Che Tanjun Observation
Currently, the inclusiveness of the Chinese market exceeds that of any country in the world, and the competition is also the same.
The United States and Europe have experienced the stage of coexistence of hundreds of automobile brands. After decades or even hundreds of years of reshuffle, the total number of automobile companies has remained at about 20.
I still believe that the Chinese automobile industry will evolve into a similar pattern in the future. The closure, merger and reorganization of car companies is no longer uncommon, and most brands will be eliminated.
If Yulon will adopt the model of cooperation with Hon Hai platform for production, cooperation with Hon Hai Precision will become Yulon Automobile's new strategic direction in the global market. Then the new trends of electrification, intelligence, lightweight and sharing are the best catalysts for Yulon Hon Hai cooperation.
Because the entire era is actually changing, Volkswagen is electrified, Dongfeng Renault is electrified, and Dongfeng Yulon is no exception. Dongfeng Yulon's withdrawal from the mainland market does not mean that it is dead, but seeks another path.
has opportunities and risks. Because whether it is Terry Gou or the deceased Yulong founder, Yan Qingling, and his wife, it is easy to renew their equipment technology, but it is difficult to change their thinking.
The automotive field is different from other industries. It requires that the management team have user thinking and higher sensitivity to the market, and also that traditional automobile companies have a stable supply chain system, annual production and sales scale of hundreds of thousands to millions of vehicles, firm adjustment skills and other resources. Yulon's sales chain in mainland China is almost in a "sparse state", and its spare parts supply chain system is not perfect, which is a test for them.
But at least there is one exciting point, Terry Gou is on the court. Yulong held this little bit of hope tightly.
#The pictures in this article are from the Internet
