In fact, the problems facing Jianghuai may be more serious than the above data: each product line is in a serious downturn. In terms of passenger cars, sales of Jianghuai cars in July were 1071, down 77.49% from the same period last year. Sales of SUVs were 6 691, down 44.6% year-on-year; sales of MPVs were 2 094, down 41.85% year-on-year. For commercial vehicles, sales of Jianghuai automobiles in July were 27,555, down 27.29% from a year earlier.
Former commercial car powerhouse
Looking back on the past development process, Jianghuai Autobots may sigh: Who knows the bitterness of 30 years?
In the late 1980s, Chinas automobile market was still in a state of poverty and white, and the automobile technology mastered by major automobile manufacturers was relatively backward. With the gradual progress of reform and opening up, Chinas economy has begun to recover in an all-round way, and the demand for automobiles is also increasing.
At that time, Jianghuai Automobile was only a manufacturer of automobile spare parts and some commercial models under the leadership of Anhui Machinery Bureau. After a thorough study of the market and its own, Jianghuai Automobile decided to invest all its capital and technology in the chassis field of passenger cars and freight cars.
In 1990, Jianghuai Automobile creatively developed a special chassis for passenger cars, which changed the situation that passenger cars in China can only be refitted from truck chassis for a long time, and improved the comfort and safety of passenger cars.
Two years later, Jianghuai Automobile developed the first rear engine chassis in China, reaching the highest level of 6-8 metre bus chassis in China. Subsequently, with the leading technology level, the three special chassis for passenger cars produced by Jianghuai Automobile almost monopolized the domestic market for medium-sized passenger cars.
The innovation of Jianghuai Autobots has paid off. In 1995, Jianghuai Automobile topped the chassis sales championship of domestic buses. In 1996, the total annual sales of the chassis of passenger cars exceeded 10,000 units.
While continuously developing bus chassis business, Jianghuai Automobile is constantly promoting its own development in the light truck field.
In 1996, the light truck Shuai Ling of Jianghuai Automobile was officially listed. Since then, light truck has gradually become the core business of Jianghuai, and gradually developed into three levels of product lines, respectively, to meet the needs of high, middle and low-end consumer markets.
Transfer from Business to Business
After becoming a leader in the field of commercial vehicles, Jianghuai Automobile gradually became dissatisfied with the status quo and began to seek to enter the passenger car market.
In fact, before 2000, Chinas self-owned brand automobile industry was mainly concentrated in the field of commercial vehicles. Cars, SUVs, MPVs and other products were almost blank, basically produced by foreign automobile enterprises or joint ventures in China. Since 2000, especially after Chinas entry into WTO, the passenger car market in China has begun to develop in a blowout way, and the first batch of independent brands in the passenger car industry have emerged in China.
Compared with commercial vehicles, passenger cars have a broader market prospects and more lucrative profits. Jianghuai Automobile has been trying to do something in the passenger car field. Zuo Yanan, the former chairman of Jianghuai Automobile Company, has repeatedly said that if we do not use passenger cars, Jianghuai Automobile will be marginalized by the market.
The first target of Jianghuai automobile is MPV.
Under the background of the rapid development of domestic small and medium-sized enterprises, Jianghuai Automobile noticed that the market had a huge demand for public and commercial vehicles. After repeated research, Jianghuai Automobile decided to cooperate with Hyundai Automobile of Korea, introduce MPV technology code H-1, and combine with the actual situation to build MPV model suitable for the Chinese market.
On March 18, 2002, the first multi-functional MPV named Jianghuai Ruifeng was offline, which opened the prelude of Jianghuai automobile entering passenger car market.
Because Jianghuai Ruifeng is produced after the introduction of Korean production line, its interior design, configuration and function are the same as modern H-1 in the same period. It is said that in addition to its eye-catching appearance and fashion, the MPV also has the comfort of the car, the passenger carrying capacity of the light passenger bus and the passability of easy shuttle to complex roads.
At that time, as soon as Jianghuai Ruifeng was launched, it became an explosive model in the domestic large MPV market. In 2002, the sales of Jianghuai Ruifeng accounted for 62% of the total domestic sales of large MPV. In October 2003, only a year and a half after its listing, Ruifeng in Jianghuai has ushered in the offline of 10,000 cars, which was a great achievement at that time.
Major march into passenger car market
Due to the success of MPV, Jianghuai Automobile began to enter a broader passenger car market, producing cars, SUVs and so on.
In January 2007, the car project of Jianghuai Automobile Company was approved by the National Development and Reform Commission. In April of the same year, Jianghuai Automobile officially released its first brand-new car, Binyue, during the Shanghai Auto Show, announcing its formal entry into the car market to the outside world.
On November 18 of that year, Pengyue was officially listed and quickly attracted the attention of the market. In 2008, Pingyues sales volume was very close to the target of 22,000 vehicles that year. However, due to the shortage of materials, inexpensive interior decoration and various quality problems, Binyues reputation in the market declined rapidly, and gradually disappeared from the market after a few years.
After the introduction of Ruiying and Binyue, Jianghuai automobile, which is transformed from commercial vehicle to passenger vehicle, has gradually found out the way of passenger vehicle market. At the Chengdu Auto Show in September 2008, Jianghuai Automobile officially released a brand new car with compact two-compartment and three-compartment versions, named Tongyue and Tongyue RS.
Unlike many independent brands in China, the time from launch to launch of new cars of Jianghuai Automobile is often very short and the action is very fast. Industry insiders believe that this mode of operation is conducive to Jianghuai automobile quickly seizing the market at that time. However, due to insufficient development and testing time of most models, there will always be a variety of minor defects in these listed models, which is not conducive to the establishment of public praise and long-term development of Jianghuai automobile in the market.
Only two months after the launch of Tongyue series, Jianghuai Automobile formally launched these two models to the market on November 17, 2008. Shortly afterwards, during the Shanghai Auto Show in 2009, Jianghuai Automobile brought a new model, Jianghuai Heyue, which is positioned in the compact market. On October 18 of the same year, the Jianghuai and Yueyue series, including the Sanxiang sedan and MPV models, were officially launched.
At the same time, Jianghuai passenger cars set up 150 franchised stores nationwide in 2010, with sales reaching a record 200,000 vehicles, ranking seventh in the sales of self-owned brands, accounting for 43.4% of the total sales of Jianghuai automobiles in that year. In the 12th Five-Year Plan formulated that year, Jianghuai Automobile announced that by 2015, passenger cars will account for two-thirds of the total production of Jianghuai Automobile, which means that the sales of Jianghuai passenger cars will reach 1 million.
However, the ideal is very full, but the reality is very skeletal.
Against the background of slowing down the growth of Chinas automobile market, with more and more foreign automobile companies entering the Chinese market, and the emergence of self-owned passenger car brands, waiting for Jianghuai automobile is a cruel competition.
In 2011, the growth rate of passenger car sales in the Yangtze and Huaihe Rivers dropped sharply, with sales of only about 215,000 vehicles in that year, an increase of 8% over the previous year. Previously, this growth rate has remained above 50%. In 2012, the sales of Jianghuai automobiles did not improve with the recovery of the car market, and the main passenger car products even showed negative growth.
However, just when Jianghuai Automobile was planning to bring forth new ideas and recreate the future of passenger cars, a thunder disturbed its pace.
On March 15, 2013, CCTVs 3.15 evening party exposed the rust of steel plates around the chassis and body of Tongyue car. Many car owners said that they had applied for repair and replacement many times after they found the problems, but they had not been properly solved by the Jianghuai automobile.
As soon as this matter was exposed, consumers began to pay attention to the quality problems of Jianghuai automobile. On the second day after the accident, Jianghuai Automobile said it would recall the batch of Tongyue cars and solve the problem thoroughly and properly.
Although mistake recognition is fast and action to solve the problem is fast, it still has a great negative impact on Jianghuai Automobile.
At this time, coinciding with the boom of SUV in Chinas auto market, Jianghuai Automobile began to focus on the field of SUV.
In 2015, the sales of Jianghuai passenger cars reached nearly 350,000 units, up 75% year on year, thanks to the hot sales of small SUV Ruifeng S3.
However, with the gradual entry of SUV market into the Red Sea, Jianghuai automobile products are facing serious homogeneity, small defects, lack of core competitiveness and other issues. In 2017, the total annual sales of Jianghuai automobile SUV plate dropped 55.9% compared with the same period last year, while in 2018, the total sales of Jianghuai automobile SUV plate shrank again, with a total annual sales of only 93.2 million vehicles, down 23.16% compared with the same period last year.
At the same time, the MPV plate of Jianghuai Automobile has entered the stopping stage. In recent years, with the continuous upgrading of consumption, home MPV products with comfort advantages have become popular. However, most of the products are aimed at government agencies and enterprise users, mainly in the commercial field. After the government cancelled the purchase of official vehicles, the potential market size of Ruifeng MPV began to shrink and the growth was weak.
Since SUV and MVV business are sluggish, after 2015, Jianghuai Automobile, which no longer concentrates on car products, is in a dilemma.
The plight of Jianghuai automobile in 2018 shows incisively and vividly.
Jianghuai Automobile said that there were five main reasons for the companys loss in 2018: first, the industry was depressed, automobile sales declined, and the companys overall profitability declined; secondly, due to accounts receivable, inventory, special moulds, proprietary technology and other factors, the preparation for asset impairment increased; thirdly, some joint venture projects were positive. In the stage of cost input, the return on investment is lower than that of last year; fourth, the company continues to insist on R&D investment in new energy, smart networking and other fields, with R&D costs increasing year-on-year; finally, exchange rate fluctuations and financing costs rising, resulting in an increase in financial costs year-on-year.
However, many insiders in the industry have pointed out in interviews with reporters from the International Finance Daily that, in addition to external factors, the main reason for the decline in sales and performance losses of Jianghuai automobiles lies in themselves.
First of all, in product development, Jianghuai Automobile has been lacking the power of independent research and development. Whether the early successful bus chassis or the Ruifeng MPV, they mainly rely on external technical support. This way of capturing the market through simple technology transfer makes Jianghuai automobile gradually lose the power of independent and increasing investment in research and development of new technologies. An automotive industry analyst who did not want to be named was blunt.
Secondly, since CCTV 3.15 exposed the car body rust incident of Jianghuai Tongyue in 2013, the reputation of Jianghuai automobile declined. Although Jianghuai Automobile has improved product quality control since then, product quality still lags behind that of the same industry. On the consumer complaint list issued by Consumer Association every year, the product complaint rate of Jianghuai Automobile has remained high.
In addition, another insider told reporters that the product launch rhythm of Jianghuai Automobile is too fast, resulting in less bright spots, and lack of sufficient verification and testing time, leading to prominent product problems.
Take Ruifeng S3, the main model of Jianghuai automobile, as an example. At the beginning of 2016, its monthly sales could reach 24,000 vehicles, but by the end of 2017, the average monthly sales of the car was only 5442, and now the monthly sales are even less than 2,000 vehicles.
Reporters from International Finance Daily found that the customers of Jianghuai automobile dealership were quite rare. When asked about sales of Ruifeng S3, the other side only said that the market was not good.
In 2019, the operation of Jianghuai Automobile has not improved. In the first quarter of 2019, the net profit of the shareholders of Jianghuai Automobile Company attributed to listed companies was 0.65 billion yuan, down 69% year on year, and the net profit deducted from non-profit was -0.34 billion yuan, of which the government subsidy included in current profits and losses was as high as 105 million yuan.
To make matters worse, on July 15, Jianghuai Automobile announced that it had received the Decision on Administrative Punishment issued by the Beijing Municipal Bureau of Ecology and Environment. It was fined more than 170 million yuan for violating the relevant regulations when it sold vehicles that did not meet the emission standards as qualified products for emission inspection, which undoubtedly aggravated Jianghuai Automobile. This years performance pressure.
Where is the future?
Objectively speaking, compared with other independent brands, Jianghuai Automobiles grasp of market trend should be more forward-looking.
For example, in the absence of high-quality passenger cars in China, Jianghuai Automobile developed the first special chassis for passenger cars; when the domestic demand for large MPV began to rise, Jianghuai Automobile introduced Ruifeng MPV; when the passenger car market blowout, Jianghuai Automobile timely entered the passenger car market...
For example, as early as 2010, when the state had not yet vigorously promoted new energy vehicles, Jianghuai Automobile started the research and development and production of new energy cars. At the Beijing auto show that year, the hybrid cars of Jianghuai and Yueyue attracted the attention of the industry, while the Tongyue pure electric vehicles, which appeared at Guangzhou auto show, caused a sensation in a certain range. Compared with BYD, the new energy vehicles of Jianghuai automobiles were only two years slower.
With the sales of SUV and MPV falling into a downturn in 2015, Jianghuai Automobile put forward the new energy development strategy in that year, striving to increase the production and sales of new energy vehicles to more than 30% of the total sales by 2025. Compared with the traditional fuel vehicles of Jianghuai automobiles, the new energy vehicles of Jianghuai automobiles have made rapid progress, which is a new direction after the development route of Jianghuai automobiles from commerce to passenger - from passenger to passenger. So, with a forward-looking awareness of Jianghuai Automobile, how is the situation caused today? An industry insider who did not want to be named told the International Finance Daily that when Jianghuai Automobile entered the more competitive passenger vehicle industry, its business vehicle system was no longer applicable. For the reasons for the plight and the future direction and objectives of development, International Finance Daily reporter interviewed Jianghuai Automobile, but as of the publication, no response has been received. Source: Author of International Finance Daily: Liable Editor of Tengke: Wang Xiaowu_NF
With the sales of SUV and MPV falling into a downturn in 2015, Jianghuai Automobile put forward the new energy development strategy in that year, striving to increase the production and sales of new energy vehicles to more than 30% of the total sales by 2025. Compared with the traditional fuel vehicles of Jianghuai automobiles, the new energy vehicles of Jianghuai automobiles have made rapid progress, which is a new direction after the development route of Jianghuai automobiles from commerce to passenger - from passenger to passenger.
So, with a forward-looking awareness of Jianghuai Automobile, how is the situation caused today?
For the reasons for the plight and the future direction and objectives of development, International Finance Daily reporter interviewed Jianghuai Automobile, but as of the publication, no response has been received.