After Dongfeng decided to withdraw from the joint venture company "Dongfeng Yueda Kia", Kia's fate as an international automobile brand in China also came to a crossroads. The reason for Dongfeng's exit is simple - the joint venture company can't make money, and in Dongfeng's business sequence, it is more and more like a tasteless and unfortunate chicken rib - in the end, this "chicken rib" Dongfeng only made 297 million yuan, and transferred 25% of the shares in Dongfeng Yueda Enterprise.
As a result, "Dongfeng Yueda Kia" has officially become history, can Kia achieve a new sales counterattack in the world's largest automobile market as it did in the first decade of entering China, return to the mainstream track and achieve brand take-off?
All the answers to this question are closely related to "transformation", China is no longer the same China as before, the Chinese auto market is not the same market as before, and kia, of course, it can be said that it is no longer the kia that people think of it – one of the notable features is that Kia is advancing a radical electrification strategy to cope with the wave of carbon neutrality in China and the world.
From the world, to China?
Kia's biggest problem is that its overall sales in the global market are actually rising – in 2021, Kia's global sales will be 2.777 million units, an increase of 6.5% year-on-year, which is even more than the more recognizable modern brands. Therefore, under the dual pressure of the new crown epidemic and the shortage of chips, it is actually quite difficult to achieve this achievement.
This means a fact - Kia's main problem is how to do a good job in the Chinese market, as the world's largest automobile market and the world's largest new energy vehicle market, China for Kia is a can not get around the existence, only to do a good job in the Chinese market, Kia's global performance will be more secure, similar to 2021 like the Chinese market is poor and the global market is good, in fact, it is difficult to sustain.
The Chinese market is characterized by full electrification. So as early as early 2021, Kia announced its medium- and long-term strategy "Plan S", which aims to turn itself into a provider of electric vehicles and environmentally friendly mobility solutions. In November, the corporate vision of "Sustainable Mobility Solution Provider" was released, with "Carbon Neutrality 2045" as the core task.
But to accomplish this task, the performance of the Chinese market is crucial. One of the most important points is that Kia can no longer position the cheap "cheapest joint venture car" route at the low end of the brand, and must seize the consumption upgrade opportunity that the Chinese market is experiencing, and introduce high-quality models verified by the global market into China, thereby boosting the brand.
In fact, in recent years, Kia has done so - K5, Smart Running Ace, fourth-generation Jawa and other models, almost all take the mid-range route, no longer play low-end cost-effective play.
In addition, the introduction of electric vehicles. According to Kia's latest plan, 11 electric vehicles will be launched in the next five years, and 880,000 pure electric vehicles will be sold by 2030, and Kia will also launch more than one special electric vehicle per year in China. According to China's new energy vehicle planning - "New Energy Vehicle Industry Development Plan" (2021-2035), by 2025, China's new energy vehicle sales accounted for 20% of the total sales of new cars, if Kia can achieve its own product introduction as scheduled, then it will usher in a new wave of market dividends.
This also shows that Kia's strategy is to first complete the top-level design of the global strategy, and then implement it in the Chinese market. From a technical point of view, Kia also has capital in new energy.
Invisible new energy giant?
Kia's route in new energy looks very complete, with hybrid vehicles that have caught fire in recent years, pure electric vehicles and plug-in hybrids, and fuel cell vehicles. For example, hyundai Kia hydrogen fuel cell vehicle NEXO, which has appeared many times, already has plans to introduce joint ventures in China. The ev6, a pure electric vehicle, will also be introduced into China.
For Kia, the parallel of multiple technology routes means that enough application scenarios can be found in the Chinese market, which is a differentiated advantage that other competitors do not have for the time being, and also makes it an invisible new energy giant.
Although Kia's sales in China in recent years have not been good, in fact, it has promoted the new energy strategy according to its own characteristics, for example, in 2019, the then Dongfeng Yueda Kia launched a two-line strategic layout of "new energy models + traditional models". In addition, Kia previously had a research and development center in Yantai, but in order to meet the needs of intelligence, it also established a digital research and development center in Shanghai.
In addition, it is the automatic driving assistance system that plays a key role in the era of intelligence. Kia has shown extraordinary openness in this regard - Although Kia itself is laying out the development of autonomous driving assistance systems, it has also said that it may seek cooperation with Local Autonomous Driving Technology Companies in China, which means that Kia will gain a key advantage in autonomous driving.
But harvesting the "second spring" in China is full of uncertainty, because for Kia, the previous homework is too much and needs to be accelerated.
Look at Kia's second growth curve!
Kia's biggest resistance in the Chinese market at present is actually the early market dividend period, in order to expand sales as soon as possible and choose the brand negative equity brought by the low-end cost-effective route, resulting in a weakening of appeal in the market.
The loss of this appeal is fatal to the impact on sales - 2014, 2015 and 2016, these three years are Kia's highlight moments in China, sales reached 646,000 units, 616,000 units, 650,000 vehicles, but as the Chinese market moves towards consumption upgrades, Kia's sales have fallen rapidly, and sales have begun to fall off a cliff since 2017, with sales of 359,000 units, 370,000 units and 289,800 units in the five years from 2017 to 2021, respectively. 249,000 units, 152,000 units.
From the perspective of sales trend, Kia's decline has not yet "bottomed out", which is very unfavorable for a brand that aims to quickly reverse the situation, and after superimposing the new energy wave, it is equivalent to adding uncertainties to the transformation.
Another challenge is localization. What is significantly different from joint ventures such as Volkswagen, Toyota, and GM is that Kia's joint ventures in China rarely see local executives familiar with the Chinese market. During Li Feng's helm a few years ago, Kia's business in China improved slightly, but in the end he also chose to leave. Although personnel changes are common for car companies, Li Feng, who has had a good experience in Chery, BAIC and other car companies, has resigned, which means that although Kia also knows that it takes time to reverse a brand, Li Feng's 3-year plan is still too long, and Kia wants to quickly reverse the situation, and it is best to work in the short term. It also suggests that with Yoo Chang-seung taking the helm of Kia's business in China, the Korean brand's localization executives may face another minor setback.
The people evaluate the car
It is foreseeable that Kia will obtain a majority stake in the new joint venture, which will boost Kia's confidence in introducing technology and models to some extent, but how to accurately capture and grasp the latest changes in the Chinese market and use products and technologies that can improve user experience to dock this change is also a big challenge for Kia at present.
With the introduction of many models, I look forward to Kia's rapid revitalization and take off again at the intersection!