Will focus on profit growth.
Text | Du Qiaomei
"In the Chinese automotive market, it will focus on an asset-light model for profit growth, with the Group's revenue in China reaching US$22 billion by 2030."
On March 1, local time, Carlos Tavares, CEO of Stellantis Group, redesigned his business in the Chinese market in the group's "Dare Forward 2030" strategic plan.
Previous speculations in the industry about the change of the shareholding ratio and business model of Stellantis Group's joint venture in China have also been further confirmed.
According to the data, Stellantis Group has an independently operated brand DS in the Chinese automotive market, citroën and Peugeot, a joint venture with Dongfeng Group, citroen and Peugeot, as well as a joint venture with gazing automobile group (601238. SH, 02238.HK) is a brand JEEP operated by GAC Fiat Chrysler Automobile Co., Ltd. (hereinafter referred to as "GAC FICA"), a joint venture.
Among them, DPCA was founded in 1992, is one of the earliest joint venture car companies in the mainland, currently has four major automakers, three in Wuhan, one in Chengdu, with a planned production capacity of 1 million vehicles; GAC FCA was established in 2010, with a total investment of about 17 billion yuan, the company is headquartered in Changsha National Economic and Technological Development Zone, Hunan, with two vehicle factories in Changsha factory and Guangzhou factory, with an overall design capacity of 328,000 vehicles.
However, with the continuous adjustment of China's auto market in recent years, whether it is DPCA or GAC FCA, it is facing the test of survival.
From the sales point of view, in the whole year of 2021, the wholesale volume of the Peugeot and Citroen brands in China was 100567 units, although it increased by 100.07% year-on-year, but compared with the annual sales of 700,000 vehicles at its peak, it was not the same; while in 2021, the production and sales of GAC FCA were 16,300 units and 20,100 units, respectively, down 57.78% and 50.33% year-on-year, with an average monthly sales of less than 2,000 vehicles; the group's independently operated luxury brand DS, Sales in China in 2021 will be only 1528 units.
According to the financial report released by Stellantis Group a few days ago, for the whole year of 2021, Stellantis Group's revenue in China, India and Asia Pacific was $4.3 billion.
Reform is imminent.
Adjust the mode of joint venture cooperation in China
Judging from the long-term strategic plan released that night, the previous rumors about Stellantis Group's business in China and the adjustment of the joint venture share ratio were confirmed, including the adjustment of the "two rooms and one hall" structure of DPCA, the adjustment of the share ratio of GAC FCA and the revitalization of production capacity.
At the end of 2021, the National Development and Reform Commission and the Ministry of Commerce issued the Special Administrative Measures for Foreign Investment Access (Negative List) (2021 Edition), announcing that from 1 January 2022, the mainland will abolish the restrictions on foreign ownership in passenger car manufacturing and the restriction that the same foreign investor can establish two or less joint ventures in China to produce similar vehicle products.
This means that in 2022 and beyond, foreign car companies can increase their shareholding ratio to more than 50% or even achieve sole proprietorship, and they can also establish more than two joint ventures, which will have a significant impact on the traditional joint venture car camp.
In fact, as early as the beginning of this year, the rumors of the adjustment of the "two rooms and one hall" structure of DPCA automobile have aroused market attention. The so-called "two rooms and one hall" scheme, "two rooms" refers to the fact that under the condition that the existing share ratio remains unchanged, china and France respectively dominate the two brands of Dongfeng Citroen and Dongfeng Peugeot. "One hall" refers to the sharing of existing public areas such as commodity planning, technology, quality, and industrial production. It is also reported that under the premise of maintaining a 50%:50% shareholding ratio between China and France, the French side will account for 75% of the equity of Dongfeng Peugeot, and the Chinese side will account for 75% of the equity of Dongfeng Citroen.
"The 'two-bedroom, one-bedroom' scheme is not yet conclusive, but it is only an option for both shareholders to discuss." Earlier, Shenlong insiders said in an interview with the think tank Jun, "In fact, as the earliest batch of joint ventures in China, the liberalization of the stock ratio may also be an opportunity for Shenlong." ”
According to the latest data, the sales volume of DPCA in February this year increased by 154% year-on-year, and the cumulative sales volume from January to February was 20,633 vehicles, an increase of 106% year-on-year.
According to the latest strategy, although the DPCA share ratio adjustment plan has not been confirmed, The Stellantis Group and Dongfeng Group will "divide and rule" the Citroen and Peugeot brands under the DPCA Company, with the Peugeot brand led by the Stellantis Group and the Citroen brand dominated by the Dongfeng Group.
At the same time, as one of the Salesantis Group's plans to upgrade the Chinese market, it will also revitalize idle capacity, improve capacity utilization, and open the manufacturing field to third parties.
It is understood that in January this year, the second plant of Dongfeng Honda in the Wuhan Economic and Technological Development Zone has been taken over by Dongfeng Honda, which will be transformed from Dongfeng Honda into a new factory specializing in the production of pure electric models.
According to data from the China Automobile Association, in 2021, DPCA will increase by 100% year-on-year, with cumulative sales of about 101,000 vehicles. Although the growth has doubled, the existing capacity utilization rate of DPCA is only about 10%. In addition, dongfeng Citroen Versailles C5X, the main sales model, will sell about 13,000 units in 2021, all of which will be manufactured by the DPCA 4 plant in Chengdu, Sichuan Province.
In addition, on March 1, Dongfeng Group (00489.HK) announced that the group is now in consultation with Stellantis Group on a new business arrangement for Dongfeng Dongfengn Automobile Co., Ltd.
For the rumors of GAC FCA's stock ratio adjustment, Tang Weishi also further confirmed in the long-term strategic plan: adopt the "One Jeep" strategy, reach an agreement with GAC Group, and increase the shares of GAC FCA from the current 50% to 75% under the approval of the government.
However, this news has not yet been confirmed by GAC Group.
It is worth noting that as early as January 27 this year, Stellantis Group announced that it plans to increase its shareholding in GAC FCA from 50% to 75%, and said that "GAC Group and Stellantis have agreed to the relevant procedures for the transaction, but still need to be approved by the regulatory authorities." Stellantis Group said that the increase in holdings is a key step in laying a new foundation for the Group's business in China.
However, it is worth looking for that on the evening of January 27, GAC Group issued a statement saying: "This release is not approved by our side, and GAC Group deeply regrets it." Regarding foreign joint venture cooperation, GAC Group will strictly abide by national policies and regulations and promote it in accordance with the principles of mutual trust and win-win results. GAC Group said.
On January 28, GAC Group issued an announcement that in recent years, due to the great difficulties in the operation of GAC FCA, the shareholders of the two sides of the joint venture have conducted in-depth communication and consultation on their joint venture and cooperation operation and the revitalization plan of GAC FCA, and at present, the two sides have not signed a formal agreement on the adjustment of GAC FCA's equity.
In terms of brands, Jeep will adhere to the brand strategy of off-road SUVs in the Chinese automotive market in the future, and it is understood that the first pure electric SUV model of the Jeep brand will be released in early 2023.
A comprehensive transformation towards electrification
In addition to reorganizing its business in China, stellantis Group has set the direction for the transformation of the next decade in the "Dare Forward 2030" strategic plan – becoming an industry leader in the fight against climate change and achieving net zero carbon emissions by 2038.
"'Leading the way global mobility is driven by diversity' will be achieved by providing innovative, clean, safe and affordable mobility solutions." Tang Weishi said that the goal is to achieve that all cars sold by the group in Europe are pure electric models by the end of 2030, and 50% of the cars sold in the United States are pure electric models. According to the plan, by 2030, the Group will have more than 75 pure electric vehicle models, reach 5 million pure electric vehicles worldwide annual sales, and reduce carbon emissions by 50%.
In addition to the jeep brand's first pure electric SUV model unveiled on the same day, Tang Weishi also released a preview version of the new Ram 1500 pure electric pickup model, which will be released in 2024.
In terms of finance, Tang Weishi said that operational capabilities, execution speed and maintaining the break-even point below 50% of shipments will continue to be characteristics of the Group's development.
According to the financial report, despite the impact of various uncertainties, the group's net revenue in 2021 was 152 billion euros, an increase of 14% over the pre-merger period; the operating profit after the whole period increased by 18 billion euros, and the adjusted operating profit margin reached 11.8%, and the full profit of each sector was profitable; and the net profit was as high as 13.4 billion euros, an increase of nearly twice as much as the year-on-year.
In line with the latest strategic plan, the Group's net revenue will double by 2030, while the Group will maintain double-digit adjusted operating margins throughout the strategic planning period.