Denza, born with a "golden spoon", is like the indisputable child raised by BYD and Daimler, and the two "parents" are also considering who will continue to "support" the 11-year-old Denza. The Beijing Business Daily reporter learned that BYD has signed an equity transfer agreement with Daimler on adjusting the structure of its joint venture company, Shenzhen Denza New Energy Automobile Co., Ltd. (hereinafter referred to as "Denza"). After the completion of the transfer, BYD and Daimler will hold 90% and 10% of the equity of Denza respectively, and the equity transfer is scheduled to be completed next year.
With the two major endorsements of Daimler and BYD, Denza was once one of the representatives of China's high-end electric vehicles. However, due to the lag of products and insufficient brand power, although the shareholders have repeatedly "transfused" blood, they have not been able to send Denza into the growth track. In 2019, Denza launched a new model and Mercedes-Benz took over the sales network, but failed to pull Denza back from the edge of the car market. Today, both shareholders adjust the proportion of equity, and BYD dominates Denza, which is considered to be the last attempt in the industry. However, the current new energy vehicle market does not seem to have much time left for Denza.
Holding hands for 11 years of equity changes
BYD and Daimler jointly announced that the two sides have signed an equity transfer agreement on adjusting denza's structure and intend to complete the equity transfer of the two parties in Denza. After the completion of the transfer, Daimler and BYD will hold 10% and 90% of depressing shares respectively, and the equity structure that has been equally held between the two sides has been broken.
It is revealed that after this adjustment, the development of Denza will be led by BYD. "The relevant matters are subject to the approval of the relevant regulatory authorities and are scheduled to be completed by the middle of next year." The relevant person in charge of Daimler said that as the forerunner of new energy vehicles, Denza has achieved steady development with the joint efforts of both shareholders. BYD will give Denza greater support in operations to promote its future success. Daimler will continue to support Denza's continued development as a shareholder. Daimler and BYD will continue to advance their successful long-term partnership.
It is understood that in May 2010, BYD signed a contract with Daimler to establish Shenzhen BYD Daimler New Technology Co., Ltd. with a 50%:50% equal share ratio; in March 2012, the Denza brand was officially released; in 2014, Denza's first new car was listed, and the product positioning was a high-end new energy model. At that time, Daimler and BYD jointly launched the Denza brand, hoping that the brand could become a new profit point for both sides on the one hand, and on the other hand, it could also enable both sides to learn from each other's strong points in technology.
However, the shareholders have held hands for 11 years, but they have not been able to make Denza a first-line new energy vehicle brand in China. In terms of product update iteration, sales performance and marketing, Denza has developed slowly. Although Denza has launched denza 300, Denza 400 and Denza 500 models, they are actually based on the first model improvement. In the context of no replacement models, Denza's sales continued to be sluggish.
In order to pull Denza back from the edge of the market, in 2019 Daimler chose to sell, announcing that Beijing Benz Sales Company would take over some of Denza's business. In addition to product development and manufacturing, Denza's sales, service, marketing and communication, network construction and other businesses are integrated into the Mercedes-Benz sales company. Subsequently, Denza launched a new model, Denza X, which is divided into pure electric version and hybrid version. However, Mercedes-Benz's sales channels have not become a plus for this "homologous" model with BYD Tang, and the data shows that depress X sales in the first 11 months of this year were only 4268 units. A Mercedes-Benz 4S store sales staff told the Beijing Business Daily reporter: "The sales of the Denza X pure electric version model after the listing are not ideal, and several vehicles cannot be sold in a month, and it has been discontinued." ”
Yan Jinghui, a member of the expert committee of the China Automobile Dealers Association, said that the Denza brand has not returned on Daimler's investment for many years, and the Use of Mercedes-Benz channels has not improved since 2019. Now adjusting the proportion of equity and handing over the main control to BYD, which knows more about the Chinese market, can reduce its own burden on the one hand, and hope that Denza can find a more flexible development path on the other hand.
"Blood transfusion" to make up for the loss and find vitality
While BYD and Daimler adjusted the equity structure of Denza, how to awaken the brand became the focus of attention.
In this regard, at the same time that the shareholders signed the equity transfer agreement, BYD issued an announcement that bystander's board of directors has considered and approved its holding subsidiaries BYD Automobile Industry and Daimler to increase depressance by 1 billion yuan in monetary terms. This means that Denza will receive a total of 2 billion yuan in capital injection from both shareholders.
In the face of sluggish sales, Denza continued to lose money. According to statistics, from 2016 to 2018, Denza lost 1.3 billion yuan, 477 million yuan and 888 million yuan respectively, and the cumulative loss of Denza in the past five years has exceeded 3.5 billion yuan. And BYD and Daimler also continue to "transfuse" for Denza. From 2012 to 2021, both shareholders have increased the capital of Denza for 12 times, with a total capital increase of more than 7 billion yuan. In the view of industry insiders, with the adjustment of the equity structure, the 2 billion yuan of capital injection obtained by Denza this time may be the last effort of Daimler and BYD to make for Denza in terms of funds.
According to the announcement, the 2 billion yuan capital increase will be mainly used for Denza's daily operating funds, which is conducive to promoting the sustainable development of Denza's new energy vehicle business and providing financial support for Denza New Energy to create better and more competitive products.
It is worth mentioning that with the funds in place, Denza's product planning has also been put on the agenda. It is understood that at present, denza has only one denza X model on sale, which is mainly sold by Mercedes-Benz dealers and after-sales service. The relevant person in charge of Daimler said that Denza will launch new models next year to further expand the new energy vehicle market, and the Denza operation team will ensure that existing Denza customers can continue to receive relevant customer service. In addition, it is reported that desmoO will launch three new models in the next two years, including MPV and SUVs.
In fact, BYD has always been imperative to the high-end new energy vehicle market. It is reported that next year, BYD will launch a new high-end brand. The price range of the high-end brand model is expected to be 500,000-1 million yuan, and it will operate independently in terms of brand, product, sales service network, operation team and so on. At the same time, BYD's automotive business will be composed of four sectors: "Dynasty Network", "Ocean Network", Denza and high-end brands.
Yan Jinghui said that in recent years, BYD has been planning to attack the high-end market, in addition to the future will launch new brands, Denza has also become one of the points of strength. Although depressing development has not been smooth for many years, but mainly due to the lag in the promotion of models, BYD is bound to use its own technical advantages after control to help Denza improve in product research and development and intelligent manufacturing.
Beijing Business Daily reporter Liu Xiaomeng
![After four capital increases, Daimler transferred 40% of Denza's equity to BYD[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)