Phoenix Network "Eye of the Storm" produced
While other car companies continue to increase their business investment, GAC FCA's Jeep brand, its foreign shareholder Stellantis Group, is doing the opposite, wanting to "reconstruct its business in China with an asset-light business model, with the goal of achieving a revenue of $22 billion in China by 2030." ”
However, on April 8, GAC Group released production and sales data for March, showing that GAC FCA only produced and sold one new car in March.
With dismal sales and a revenue target of up to $22 billion, can Stellantis' asset-light strategy work? How long can the Jeep brand survive under the new strategy?
4 years shrinkage of 6 billion net assets to 0
At present, Stellantis Group has a total of 4 major brands in China, including the DS brand, which has been operating independently since 2020, Citroën and Peugeot, which are operated by Dongfeng Group's joint venture company DPCA, and the Jeep brand operated by GAC Fiat Chrysler Automobile Co., Ltd. (hereinafter referred to as "GAC FCA"), a joint venture with GAC Group.
On March 1, stellantis Group released the "Dare Forward 2030" long-term strategic plan, saying that its joint venture in China, DPCA, will adopt a "two-bedroom, one-room" model, with the Chinese side leading Citroën and the French side leading Peugeot, sharing public resources and fields, including manufacturing. At the same time, as one of the upgrading plans of The Stellantis Group in the Chinese market, DPCA will also open the manufacturing field to third parties, aiming to effectively revitalize idle capacity and improve capacity utilization.
From the independent operation of DS to the "two bedrooms and one hall" of DPCA, the Stellantis Group's joint venture in China is only left in the balance of GAC FCA.
But the "war" between the joint venture parties, The Stellantis Group and the GAC Group, has already begun.
On January 27 this year, Stellantis Group announced that it plans to increase its shareholding in GAC FCA from 50% to 75%, saying that "GAC Group and Stellantis have agreed to the relevant procedures for the transaction, but still need to be approved by regulatory authorities."
Stellantis Group said that increasing its shareholding in the GAC FCA joint venture is a key step in laying a new foundation for the group's business in China. This move shows the great importance that the Stellantis Group attaches to the Jeep brand.
However, shortly after the news of the increase in the shareholding ratio was issued, (on the night of January 27), it was slapped in the face by the GAC Group.
GAC Group issued a statement saying: "(Increasing the shareholding ratio) This announcement is not approved by us, and GAC Group deeply regrets this. 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. ”
The change in the shareholding ratio of automobile joint venture companies is not a new thing, especially since January 1 this year, the policy has officially relaxed the restrictions on joint ventures of foreign automobile companies in China. However, as an important cooperation matter between the two major groups, the reversal drama sung by Stellantis Group and GAC Group put the contradiction between the two on the surface.
On the second day after the announcement of the adjustment of the stock ratio of Theellantis Group, GAC Group issued another announcement saying, "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 FCA revitalization plan. At present, the two sides have not signed a formal agreement on the equity adjustment of GAC FCA. ”
Judging from the response of GAC Group, raising the GAC FCA shareholding ratio from 50% to 75% seems to be just a wishful thinking of the Stellantis Group.
But the game between GAC Group and Stellantis Group on the share ratio also has something that people can't understand.
The data shows that GAC FCA has begun to enter a downward channel since 2018. In 2018, GAC FCA's annual sales volume was 125,200 units, down 38.99% year-on-year; in 2019, it was 73,900 units, down 40.96% year-on-year; in 2020, it was 40,500 units, down 45.18% year-on-year; and in 2021, it was 20,100 units, down 50.33% year-on-year.
Sales continued for 4 years.
However, this is not the time when GAC FCA fell the fastest.
According to the data, GAC FCA sold a total of 1860 vehicles in the first three months of this year, down 75.29% year-on-year. Among them, the production volume in February was 35 units, and the sales volume was 134 vehicles, and the production and sales fell by more than 90% year-on-year. In March, production and sales were both 1 unit, down more than 99% year-on-year.
Apparently, this year's GAC FCA has done a free landing movement with its face to the ground.
The rapid decline in sales will inevitably lead to losses.
According to public data, gaz fcacia fca, at its peak in 2017, had a net asset of 4.422 billion yuan. Gac Motor Group's 2021 semi-annual report shows that GAC FCA's net assets are -1.438 billion yuan. In just 4 years, GAC FCA's net assets shrank by nearly 6 billion. According to the 2021 annual report of GAC Group, GAC FCA's total assets were 8.681 billion yuan and total liabilities were 8.679 billion yuan, which was offset by two phases, although the decline in net assets has improved, but the net assets of GAC FCA are about 0.
According to the data, the DS brand sold 95 vehicles in January-February this year, while Peugeot and Citroen sold a total of 20,000 vehicles in the first two months. GAC FCA, which sold 1,860 vehicles in the previous Three months, is not the worst business segment of the Stellantis Group, but THE GAC FCA, which is on the edge, seems to have no potential at all.
According to public information, GAC FCA was established in 2010 and plans to invest 17 billion yuan. Since the official domestic listing in 2015, the net assets have been 0, which is a loss-making transaction for both shareholders, and at this time, The Stellantis Group wants to grasp more equity, and it is inevitable to pay a certain price.
Success is also domestic or not domestic?
"Not all SUVs are called Jeep", this advertising slogan once made GAC FCA set a highlight moment of more than 200,000 vehicles sold annually. However, the decline of GAC FCA is also inseparable from this advertising slogan.
GAC FCA, which entered the Chinese market in 2014, is catching up with the SUV boom in the Chinese auto market.
According to the data, the total sales of SUVs in China exceeded 4.1 million units in 2014, an increase of 36.4% year-on-year, while the overall passenger car growth rate in that year was only 9.9%. In 2017, China's total SUV sales were 10.253 million units, an increase of 8.4% year-on-year, while overall passenger car sales fell by 0.7% that year.
From 2014 to 2017, although the annual sales growth rate of SUVs slowed down, in four years, the size of the SUV market increased by 2.5 times.
As a focus on SUV products, GAC FCA has stepped on the outlet of China's SUVs, and its annual sales have also risen in the past 4 years.
From 2018, the SUV market ushered in a correction. According to the data, the total sales of SUVs in 2018 were 9.959 million units, 9.353 million units in 2019, and 9.461 million units in 2020, and it was not until 2021 that the total sales of SUVs recovered to more than 10 million units (10.03 million units).
The slight adjustment of the overall SUV market has become an insurmountable mountain that fell on GAC FCA. According to the data, GAC FCA's annual sales from 2018 to 2021 were 125,200 units, 73,900 units, 40,500 units and 20,100 units, respectively.
Obviously, GAC FCA, which has grown too smoothly, has not been able to withstand the fluctuations of this market. Some people commented that "from the moment of domestic production, Jeep was destined to be played badly by GAC FCA." ”
"Jeep running on the domestic road is mostly more than 100,000 free men and 200,000 guides, which is significantly lower than the 600,000 grades of the Grand Cherokee at that time." GAC FCA, which has a lower positioning of domestic products, has lost the soul of the Jeep brand in the eyes of some consumers.
From January to March 2022, gac motor FCA cumulative sales of 1860 vehicles, from the data of the association can be seen, the first two months of the Jeep brand under the free man, guide have no sales. Under the big wave of sand, the new models of the Free Hero and the Guide launched after domestic production are no longer bought by consumers.
In addition to product positioning problems, GAC FCA's quality problems have also erupted intensively since 2018. Large-scale burning of engine oil, lying nest and other product quality problems, so that GAC FCA has been questioned.
"Sales have declined, profitability has been worrying, operations have continued to deteriorate, and GAC FCA has been in a dead loop in recent years." An auto industry observer said, "If there is no change, Jeep is likely to withdraw from the Chinese market." ”
Marginalization in China,
"Asset-light model" or China-light?
In fact, in 2021, GAC Group has already planned to get rid of the burden of GAC FCA.
According to the data, GAC Group's total sales last year were 2.1417 million units, of which GAC Toyota sold 828,000 vehicles, GAC Honda sold 780,000 vehicles, GAC Chuanqi sold 324,200 vehicles, GAC Aean sold 120,200 vehicles, while GAC FCA sold only 20,100 vehicles.
In the entire business segment of GAC Group, GAC FCA has become a laggard.
In addition, under the great boom of the global automotive "new four modernizations", GAC Group is actively accelerating the electrification transformation of its business. At present, GAC Aegon is undertaking the heavy responsibility of the electrification transformation of GAC Group and is planning to go public.
According to public information, on March 17, GAC Group announced that GAC Aeg, a wholly-owned subsidiary of the group, has completed a total financing of 2.566 billion yuan. GAC Group said that it intends to introduce market-oriented strategic investors with strategic synergy, policy guidance and market influence, and will actively seek appropriate opportunities to list in the future.
In addition to the transformation of its own brands to electrification, GAC Group's joint venture brands GAC Honda, GAC Toyota and GAC Mitsubishi have all released pure electric brands or pure electric vehicle models, and have also launched the electrification transformation.
GAC FCA, which has been unable to protect itself, is obviously lagging behind in the electrification reform.
In March this year, when Stellantis Group released its long-term strategic plan, CEO Tang Weishi not only said that he would increase the share ratio of GAC FCA from 50% to 75%, but also said that Jeep would adhere to the brand strategy of off-road SUVs in the Chinese auto market in the future. And, the Jeep brand's first all-electric SUV model will be released in early 2023.
Tang Weishi not only wants to start Jeep's electrification transformation, but also lead the entire Stellantis Group to a comprehensive transformation to electrification.
By the end of 2030, the group's vehicles sold in Europe will be pure electric models, with 50% of cars sold in the United States being pure electric, it said. In addition, by 2030, the Group will have more than 75 pure electric vehicle models, with annual sales of pure electric vehicles reaching 5 million units worldwide.
To demonstrate its determination to transition to electrification, the Stellantis Group unveiled the first pure electric SUV model of the Jeep brand on the same day.
As the world's fourth-largest car group, such an ambitious transformation plan seems to have little to do with the Chinese market.
At present, among the four major brands of Stellantis Group in China, the DS brand will sell only 1528 vehicles in China in 2021. In terms of joint venture brands, GAC FCA will sell 20,100 units in 2021, and Peugeot and Citroen, a subsidiary of Peugeot and Citroen, sold a total of 100,000 units last year.
According to the data, the global sales of Stellantis Group in 2021 will be 6.14 million vehicles, and all the four major brands in the Chinese market will sell less than 130,000 vehicles, which is only a fraction of its global sales.
However, looking at the Chinese auto market, Tesla and some Chinese brands have seized the opportunity in the field of electrification, while giants such as Volkswagen, Ford, Toyota, and Honda have also accelerated the transformation of electrification.
Time and opportunities are running out for the Stellantis Group and the Jeep brand.
As a result, the Stellantis Group is currently faced with the dual responsibility of boosting sales and electrifying in the Chinese market. But this time, the Stellantis Group, which operates in China in an asset-light model, can realize the "empty glove white wolf" plan in the field of electrification that relies on a large number of new technologies and high investment without occupying any "time and place advantages"?