Dongfeng Renault project or will be signed late Renault is not easy
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If there is no accident, the signing and ground-breaking ceremony of Dongfeng Motor’s and Renault-made domestic projects will be held this month. This means that the two sides have already planned a decade of marriage, and Renault, which has experienced twists and turns in China, will eventually achieve domestic production. At this time, it has been 30 years since the first joint venture of the Chinese automobile industry was launched.
This is somewhat sad for Renault. Up to now, the Peugeot Citroen brand, which shares Renault's French heritage, has sold 3 million vehicles in China. Dongfeng Nissan, which is in the same alliance, is also moving toward 5 million vehicles.
At present, the sales of Renault imported vehicles in China are only 30,000. Even if all goes well, Dongfeng Renault’s first joint venture product will be available in 2015. Renault's admission is really too late.
More importantly, Renault, who has missed several opportunities, will have a hard time catching up with the pioneers. When Carlos Ghosn, the head of the Renault-Nissan Alliance, for the first time put forward the idea of ​​marrying with Dongfeng, it was precisely the prelude to the start of the Chinese automobile market's golden decade. At that time, competitors were not yet full.
However, the current Chinese auto market has entered a stage of micro-growth of about 6%. Concentration of car companies is increasing, and the competitive landscape is almost solidified. At this time, Renault wants to break into the crowded Chinese auto market with new brands and channels.
1 yuan
It is reported that the State-owned Assets Supervision and Administration Commission approved China Aerospace Sanjiang Group to transfer its 55% stake in Sanjiang Renault to Dongfeng Motor's Dongfeng Motor Group Co., Ltd. (00489.HK) at the end of May. This means that the key obstacles to the Dongfeng Renault joint venture have already been cleared. For the progress of the joint venture project, Dongfeng said that it has been submitted to the relevant national ministries for approval.
At the end of 1993, Renault Automotive and China Sanjiang Space Group spent US$98 million to establish the Sanjiang Renault JV. However, since 2004, Sanjiang Renault has entered a state of production suspension, and so far only more than 4,000 commercial vehicles have been sold.
In 2000, the newly formed Renault, Nissan and Dongfeng became the “Golden Triangleâ€. Dongfeng hopes to adopt the same kind of cooperation with Dongfeng as a limited joint venture with Renault on commercial vehicle and passenger vehicle projects.
According to the domestic automobile industry policy, the Renault-Nissan Alliance has two joint ventures (Dongfeng Nissan and Sanjiang Renault) in the country. The joint venture quota has been used up. Renault must withdraw from the Sanjiang Renault project if it wants to establish a joint venture with Dongfeng.
However, in the long negotiations between Sanjiang, Renault and Dongfeng, Sanjiang hopes to retain the qualification of the entire vehicle and instead produce commercial vehicles, but Dongfeng and Renault do not accept the plan.
Another idea is that Renault gave up his equity in Sanjiang Renault, Sanjiang Renault turned into a subsidiary of Sanjiang to develop independently, leaving a joint venture for Renault-Nissan. However, taking into consideration the circumstances of the industrial policy at that time, it was difficult to re-approve the new joint venture company, and later it was over.
Since 2011, Ghosn has strongly promoted the marriage of Renault and Dongfeng, and more importantly, the Wuhan municipal government that wishes to overweight the automobile industry has become more or less an important promoter.
According to sources, in order to allow the Dongfeng Renault project to settle successfully in the Wuhan Economic and Technological Development Zone and the Sanjiang Group to withdraw as soon as possible, Wuhan City has undertaken almost all the purchase of "shell" fees.
In the first half of 2012, Wuhan City Government, Sanjiang Group and Dongfeng Company signed relevant agreements. The Wuhan Economic Development Zone and the Wuhan Municipal Government jointly shared more than 1.3 billion yuan, and then sold them to Dongfeng at the price of “1 Yuanâ€. car. The news has not yet been officially confirmed, however, according to Sanjiang Renault's shareholder Fang Sanjiang Aerospace insiders revealed that after the sale of "shell", Sanjiang Renault assets have been cleaned up, the net assets are zero, and Sanjiang Group is also divesting the Sanjiang debt Later, it was transferred to Dongfeng at the price of “1 Yuanâ€.
In June last year, Dongfeng Motor and Sanjiang Group signed an agreement to acquire a 55% stake in Sanjiang Renault. Sanjiang Renault abandons the vehicle business and its vehicle qualification is inherited from the soon-to-be established Dongfeng Renault. At that time, Sanjiang Renault was transformed into an exclusive supporting plant for engines and transmissions produced by the Dongfeng Renault joint venture.
It is reported that the investment amount of the Dongfeng Renault joint venture has increased to 11 billion yuan. Among them, the first phase of investment of 7.2 billion yuan, the main production SUV and MPV models, annual production capacity of 150,000, plans to put into production in 2014; in the first phase of profitability will be expanded after the second phase, the main production of Renault sedan.
However, as of now, Dongfeng Renault has only solved the early restructuring problems. As of July 10, the reporter landed on the website of the Wuhan Industrial and Commercial Department to inquire, and the registered information of Sanjiang Renault has not yet been renamed. The examination and approval of the competent authorities such as the National Development and Reform Commission, the Ministry of Commerce and the Ministry of Industry and Information Technology are also crucial.
In addition, the equity ratio of the joint venture partners is also pending. According to the current stock ratio, Dongfeng and Renault respectively hold 55% and 45%. Relevant sources close to Renault China said that the future will surely become 50:50. In this regard, the relevant person in charge of Dongfeng said, "There is no clear statement."
Zhang Zhiyong, an automotive analyst, said that from a number of joint venture cases, the shareholders' equity ratio is the most favorable model for the joint venture company. "In the future, Renault will probably acquire 5% of the shares through capital increase to achieve equivalence."
Latecomer opportunities
As joint-venture recruits, the chance for the continued "micro-growth" auto market to leave Dongfeng Renault is running out.
Judging from the competitive environment, the auto market concentration is getting higher and higher. According to data from the China Association of Automobile Manufacturers, in the first half of this year, the total sales volume of passenger vehicles in the top ten passenger car sales accounted for 60% of the total passenger car sales. Among them, the tenth ranked Shenlong sales in the first half reached 279,900 vehicles. Even if Dongfeng Renault can smoothly put into operation as planned in 2015, its 150,000-phase and 300,000 second phase production capacity will also need to be released gradually. In addition to product competition, Dongfeng Renault will also face pressure to reopen channels. At present, Dongfeng Renault has begun to recruit dealers, in addition to the original Renault imported car dealers can submit domestic vehicle sales qualification applications, Dongfeng Nissan and Dongfeng Motor's other joint venture dealers are Dongfeng Renault's focus on selected investors and partners. However, JDPower's survey shows that the proportion of dealers with business losses has been continuously expanding for four consecutive years, and profitable distributors have dropped from 84% to 40%.
According to the report of Xinhuaxin, as of the first quarter of 2013, the quarterly growth rate of domestic automobile dealers has been lower than that of the same period of last year for three consecutive quarters, and the overall development of domestic automobile dealer networks is not enthusiastic.
In addition, not only many brands with strong profitability are still expanding, but new brands such as GAC Mitsubishi Motors, GAC Fiat, Infiniti and Jaguar Land Rover have all thrown aggressive expansion plans. In the face of pent-up investors, how Dongfeng Renault, whose brand awareness is not high, competes with other brands is a problem.
However, Dongfeng Renault is not entirely without opportunities. In terms of enterprise management and structure, Dongfeng Renault may entirely copy the Dongfeng Nissan model. Last year, Renault once again sent an executive vice president, Nakamura Katsumi, to manage the Chinese market. He used to be the president of Dongfeng Motor Co., Ltd., and knows the Chinese market well, or it will make Dongfeng Renault avoid detours and get on track. At the marketing level, although Renault has relied on sales of imported cars, it has accumulated certain marketing experience in the Chinese market. However, in Zhang Zhiyong's view, Dongfeng Renault must also conduct marketing in a more aggressive manner in order to open the situation as soon as possible.
At the product level, Dongfeng Renault has determined that the first domestically-made model is the SUV Correo, which will cut into the largest market segment. According to the data from the national joint conference, China's SUV growth rate reached 21.8% in 2012, far higher than the overall 6% market growth. After Kore proud of domestic, its price is also expected to be reduced from the current 230,000 yuan to 290,000 yuan to 180,000 yuan to 230,000 yuan range.
Xu Changming, director of the Information Resource Department of the National Information Center, believes that the key to the success of Dongfeng Renault lies in its localization. To imitate GM, implement localization as soon as possible in many aspects such as product introduction, marketing strategy, and personnel management. In addition, Renault also confirmed that it will bring electric vehicle technology to China through Dongfeng Renault, and Wuhan, its headquarters and factory location, is also a demonstration city for electric vehicles. Dongfeng Renault can also leverage on electric vehicle projects to reshape its brand and influence. However, whether Renault’s domestic production can restore the lost opportunities, the prospects are still uncertain. 