Another joint venture car company did not survive to 2022. On December 30 last year, Renault Brilliance Filed for Bankruptcy. Not long ago, there was media exposure that the company has begun to suspend the payment of employee wages, and some factories have been suspended for more than 3 months. CEO Schgemey left the mess early and returned to Europe as the head of the Renault UK market.
It is worth mentioning that this is the second time that the Renault brand has lost the Chinese market after Dongfeng Renault announced its restructuring and withdrawal from the Chinese passenger car market on April 14, 2020. The business of France's second largest car company in China can be described as repeatedly blocked.
As early as the 1990s, Renault entered the Chinese market and established Sanjiang Renault Automobile Co., Ltd., a joint venture with Sanjiang Aerospace, mainly producing light commercial vehicles, the first model being the Trafic. However, due to the extremely low local productivity at that time, spare parts were basically imported from foreign countries and assembled at home, resulting in high costs. Originally planned to produce 40,000 units per year, the cumulative sales volume in the past eight years was only 4,112 units. In the millennium, the Sanjiang Group, which could not bear the losses of consecutive years, announced its withdrawal.
Since then, Renault has been sold in import form in the Chinese market, at its worst less than 900 units, until the introduction of Koleao, from 14,700 units in the first year to 29,700 units in the second year. The restart of the Chinese market is also on the agenda at this time, this time the object of cooperation is Dongfeng Motor, which was officially established nine years ago by Dongfeng Renault, mainly producing fuel passenger cars.
In 2016, two SUV models, The Correga and The Coreyo, were introduced, and the following year it sold 72,000 units. At that time, Dongfeng Renault was full of confidence and shouted out the bold words of increasing sales to 400,000 vehicles in 2022. Who would have thought that the peak would be so short-lived, and sales continued to decline for the next two years, until it withdrew from the Chinese fuel passenger car market.
During this period, Renault was obsessed with the light commercial vehicle market, so it had to acquire a 49% stake in Brilliance Jinbei for 1 yuan in cash. As the youngest joint venture in the Chinese auto market at that time, Renault Brilliance Jinbei plans to produce and sell light commercial vehicles under the three brands of Jinbei, Renault and Huasong, and is expected to launch seven LCVs (light passengers), including three electric vehicles, by the end of 2022, achieving annual sales of 150,000 vehicles.
This goal is not a fantasy, to know that the Jinbei Automobile, which was born in the late 1980s, is known as the "National God Car", and has hundreds of models such as Jinbei Haishi and Jinbei Geruisi that sell well throughout the country. At its peak, the market share exceeded 75%, ranking first in the sales volume of China's commercial vehicle market for 19 consecutive years, and it is undoubtedly the first brand of light passengers, with more than 1 million vehicles.
With the rise of brands such as Jiangling and SAIC Maxus, Jinbei Automobile began to decline, and even lost money. Just as the so-called "skinny camel is bigger than a horse", with the help of Renault's technology, there is still hope to return to the peak. But the development is not as smooth as imagined, the first few years of establishment has been "eating the old", relying on the product line of the Golden Cup to support.
It was not until November 2020 that the first model of the joint venture between the two sides, Jinbei Haishi King, was officially launched, but the market response was flat. The Renault Brilliance Gold Cup sold only about 23,000 vehicles in the whole year, down 42.8% year-on-year; it declined for three consecutive years, unchanged from the sales volume before the joint venture. In the first 11 months of last year, the cumulative sales volume was only about 0.7 million units, and there has been no production since September.
In addition to the protracted product rhythm, Brilliance Group's poor management, high bonds, and inability to provide financial support for Brilliance Renault are also one of the reasons for bankruptcy. It is reported that in just four years, the company has been involved in a total of 730 legal proceedings, involving an amount of up to 152 million yuan; a total of 102 times listed as an executor, the total amount of execution is 140 million yuan, most of which involves contract disputes involving suppliers.
epilogue
As a 122-year-old French brand, Renault is not satisfied in China, but they are obviously reluctant to give up this important market. Three years ago, they formed a new joint venture with Jiangling Group and launched their first pure electric vehicle, Yi, in September last year. In August, a memorandum of understanding was signed with Geely, and it was reported that the two sides would set up a joint venture company to focus on the new energy market in Asia. How effective it will be is still unknown.