Shulou(Shulou.com)12/24 Report--

Recently, Changan Automobile moves frequently.

On November 17, Changan Automobile unveiled its battery brand, Changan Golden Bell cover, at the Guangzhou Auto Show. Just 4 days later, on November 21, Changan Motor and Weilai signed a cooperation agreement to change electricity, becoming the first member of the "Weilai Power Exchange moments". Then, on November 26, Changan Motor once again stunned the industry, announcing plans to work with Huawei to create a "circle of friends" of Huawei's BU.

While strengthening domestic cooperation, Changan Automobile's new energy plan to go to sea has also begun to speed up recently.

On November 27, the conference of Changan Automobile Brand in Southeast Asia was held in Bangkok, Thailand. Chairman Zhu Huarong shared the determination and path of Changan Automobile Globalization. "Thailand's automobile industry chain is perfect and is transforming to the direction of electrification, which is highly consistent with the development direction of Changan Automobile New Energy Strategy." Zhu Huarong said on the spot. Two days later, two dark blue right rudder models, the DEEPAL S07 and the DEEPAL L07, went on sale at the Thailand Auto Show.

On December 12, Avita Technology issued another statement that Tan Benhong is no longer chairman and CEO of Avita Technology, and that Zhu Huarong, the current party committee secretary and chairman of Changan Automobile, will take over the new chairman of Avita Technology.

This series of strategic actions have aroused widespread concern in the industry, especially for Changan Automobile, which has a history of more than 160 years. Why is it so active to adjust its strategic direction recently? What twists and turns Chang'an has experienced in the transformation of new energy in the past? In the future, how can Chang'an pass through the fog of the new energy era?

1. The resume of Changan is full of legends. It is not only the oldest automobile company in China, but also one of the four major automobile groups in China, and it is also a middle-aged auto company with its own brand producing and selling more than one million.

In terms of car-building qualifications, Geely, Changan and BYD all want to call Changan Big Brother. Its roots can be traced back to 1862, when Li Hongzhang founded the Shanghai Foreign Artillery Bureau in Songjiang, Shanghai, which was the first industrial enterprise in China's modern history, the earliest arms factory in China, and the predecessor of Chang'an Automobile.

However, it is a pity that the Shanghai Foreign Artillery Bureau failed to accomplish the important task of industrial salvation. With the failure of the Westernization Movement, the Shanghai Foreign Artillery Bureau moved from Shanghai to Chongqing and "disappeared" for a long time.

1984 was an important turning point in the history of Chang'an Automobile. In this year, Chang'an Automobile shifted from military production to civil automobile field, producing China's first mini-car, which officially entered the automobile field, and this is also the first time for Chang'an Automobile to start a business. At that time, during his inspection in Chongqing, the then Premier of the State Council inspected the mini truck trial-produced by the Changan Factory in the people's Auditorium and gave the instruction that "Chongqing can also engage in the production of cars by the consortium." Changan and Suzuki signed a technical trade agreement, which opened the prelude to the joint venture.

Changan Automobile seized the opportunity of reform and opening up to set up joint ventures with multinational car companies such as Ford, Suzuki and Mazda. With the help of the joint venture, Changan Automobile produced a number of popular products in the 1990s, such as Otto and antelope. By the end of 2003, these two cars had contributed 17.6 billion yuan in income and 3.69 billion yuan in profits to Changan. With a profit of more than 10,000 yuan, Changan had a taste of lying down and winning for the first time.

However, with the upgrading of Chinese consumption and the decline in the market demand for minicars, Changan Automobile fell into a period of low ebb.

In 2003, in order to meet the growing demand for private cars from Volkswagen, Chang'an Automobile started its second venture. In 2006, the first self-branded car of Changan Automobile went on the market, and this venture is also regarded as a gorgeous turn of Changan Automobile "commercial transfer".

In 2012, Changan Automobile's well-crafted middle and high-end automobile products, such as Yizhi, CS35, Rui Gao, Ono and so on, appeared on the market centrally, and Changan rose abruptly based on its accumulated strength for a century, ushering in another "spring" in the persistence of independent innovation.

In 2015, Changan Automobile became the champion of its own brand with sales of 938000 vehicles. At the same time, the company's R & D team is also the first in the industry, with more than 6000 employees, and the company's ability to make money is also excellent.

2015-2016 domestic independent brand sales ranking (10,000 vehicles), but at that time Changan's profits mainly depended on Ford, a money-making machine. Ford contributed most of Changan's profits with sales of 1/3, making it the backbone of the group. In fact, Chang'an is not alone. Looking back at the history of SAIC, FAW, Guangzhou Auto and other auto groups, they also rely heavily on joint ventures. SAIC GM and SAIC Volkswagen, for example, contribute nearly 90% of the company's profits.

But the good times didn't last long. Changan Ford's sales began to plummet in 2017, and by 2019, Ford's sales fell to just 180000 vehicles, a far cry from its peak. It never rains but it pours. In 2017, Changan Suzuki sales were only 83900, down nearly 50% from the same period last year. In the first quarter of 2018, sales continued to plummet, to only 13000, which has become an encumbrance to the company.

On the other hand, independent brands represented by Great Wall and Geely are rising strongly and surpassing them in terms of sales. In 2017, Geely car sales surpassed Changan to become the champion of independent brand sales, and Changan has so far failed to achieve anti-surpassing.

In 2020, Chang'an faced the situation of two-line failure of independent joint venture brands. Zhu Huarong was ordered to launch UNI-T, the first model of "UNI" after taking office, and achieved sales of more than 10,000 for four consecutive months.

Unfortunately, after the failure of the independent joint venture brand, Chang'an is about to usher in the next hurdle.

2. Three Wars New Energy in the process of new energy transformation, including independent brands such as BYD and Geely, many car companies have risen through the introduction of new models and improved technology. BYD, in particular, shows a strong momentum of growth after the transformation of new energy vehicles. On the contrary, Changan Automobile, traditional fuel vehicles have been losing money, and the new energy track has not gained a foothold.

Back in 2001, when the Ministry of Science and Technology issued the strategic plan for new energy vehicles, Changan Automobile keenly seized the opportunity, quickly launched pure electric and hybrid models, and actively participated in the development of new energy business. However, due to technical reasons, such as long charging time, small battery capacity, short battery life and poor heat dissipation, the pure electric vehicle Changan Mercedes-Benz MINI EV launched in 2009 failed to be mass produced, but had a far-reaching impact on China's new energy vehicle industry.

After 2010, with the promotion of new energy vehicle subsidy policy, Changan Automobile has launched a number of "oil-to-electricity" models, such as E30, Yitou, Ono, Changan Mercedes-Benz MINI electric version and so on. Although the "oil-to-electricity" model accelerates the launch of new energy models and does not require the development of new pure electric platforms, the company has not made significant progress in the field of new energy due to the battery life and performance sacrifices caused by the revamping of fuel vehicles.

In order to deal with the predicament, Changan Automobile has carried out a series of self-rescue adjustments.

In October 2017, Changan Automobile officially launched the Shangri-La Plan for the transformation of new energy, which plans to build three new energy dedicated platforms by 2020 and stop the sale of traditional fuel vehicles worldwide in 2025. At the same time, Changan Automobile also announced that it would set up a new energy industry fund to work with companies such as Ningde Times, Bosch, Lulai and Didi to build a new energy automobile circle to lay out and invest in the entire new energy industry.

In August 2018, Changan Automobile released its intelligent strategy, the Beidou Tianshu Plan, which aims to transform from a traditional automobile manufacturer to an intelligent travel technology company.

On April 18, 2023, Changan Automobile released its overseas strategy, the "sea to accept all rivers" plan, and clearly put forward the "four one" development goals, that is, by 2030, the investment in the overseas market of Changan Automobile will exceed 10 billion US dollars, and the annual sales volume in the overseas market will exceed 1.2 million vehicles. The number of overseas business employees has exceeded 10000, making Changan Automobile a world-class automobile brand.

The three strategies deal with electrification, intelligence and internationalization respectively. Today, Changan Automobile has established three major new energy brands: deep Blue, Qiyuan and Avita, and plans to launch more high-quality new energy models in the future.

Zhu Huarong once said that the birth of Avita carries the upward mission of Changan automobile brand, and its development is the top priority of Changan automobile. However, Avita's high-end road still faces challenges. Although it can stabilize in the market with a price of 300,000, the monthly sales of one or two thousand units are almost negligible compared with Changan cars, which sell nearly 200000 units a month.

In the face of the middle and high end of the market, Deep Blue Automobile, the first independent pure electricity brand under Changan, seems to have failed to give a satisfactory answer. SL03, the first model of Deep Blue, was delivered in August last year to the end of January this year, with a cumulative delivery volume of only 30,000 vehicles in half a year. Compared with the first year of the new power of car building, this speed is not too slow, but today it can no longer keep pace with the development of the industry.

Changan Qiyuan officially released in August this year, has been listed A07, A05 two products, Qiyuan Q05 has started pre-sale, Qiyuan A06 will also be launched at the end of the year. As of October, the cumulative order of Changan Qiyuan exceeded 20000 units, the performance is relatively good.

But there is not much time left for Changan Automobile to transform into new energy.

3. How to get through the fog of the new energy era? Zhu Huarong said at the China Electric vehicle 100 Forum in 2022 that with the acceleration of new energy vehicles, the competition in China's fuel vehicle market will be more fierce. "in the next 3-5 years, 80% of Chinese fuel vehicle brands will shut down and turn around."

At present, China's automobile industry is undergoing transformation, and traditional fuel vehicles are facing the trend of being replaced by new energy vehicles. Recently, Ren Ze Pingze pointed out that traditional fuel vehicles are ushering in a "Nokia moment", while China's auto industry is leading by new energy and opening a new stage of inventory competition. In this new stage, it is particularly important to pay attention to the three major directions of the automobile industry:

First of all, electrification and intelligence have become the key trend. The electric vehicle with self-driving function is expected to replace the traditional fuel vehicle, and the power battery, on-board software and hardware, algorithm chip and other aspects will become the key support of the industry. Sales of new energy are expected to be between 8.5 million and 9 million vehicles in 2023, a year-on-year growth of about 30 per cent.

Secondly, the autonomy of automobile brand is the only way. In this regard, Chinese independent car brands have reached 50 per cent market share in 2022, while German and Japanese brands have a market share of 70.3 per cent and 84.2 per cent respectively. Chinese independent brands are expected to continue to rise in the middle and high end of the market.

Third, the globalization of car sales is an inevitable trend. China's automobile industry is moving towards the international market, competing with international brands such as Germany, Japan, the United States and other international brands to expand China's share in the global market. In 2022, the number of Chinese car exports reached 3.11 million, an increase of 54.4% over the same period last year.

Changan Automobile actively carries out foreign investment cooperation has a strong momentum, although it can not hide its anxiety and sense of crisis, but also reflects Changan's new thinking and determination in the era of new energy vehicles.

It is worth noting that Changan will not be the only partner whether it is Huawei's new company or Weilai's power-changing "moments". Chebai online believes that it will be a big challenge to maintain its own differentiation in the joint venture.

In addition to investment and cooperation, car intelligence is also the key to determine the outcome of the competition. Zhang Yongwei, vice chairman and secretary-general of the China Electric vehicle Association of 100, once said: "without the development of intelligence, the first-mover advantage of electrification may not be preserved." the two modernizations are synchronized, and it is even necessary to accelerate the transition to intelligence in order to maintain the lead. "

In addition, Changan Automobile also needs to increase investment in its own brands and actively look for new growth points in overseas markets. On November 27, the Changan Automobile brand held a press conference in Southeast Asia and said it would invest 20 billion baht to build a production base of 200000 new energy vehicles in Thailand's Luoyong Prefecture. According to the plan, overseas sales of Changan Automobile will exceed 1.2 million by 2030.

But fortunately, Changan Automobile still has relatively abundant funds to support its transformation and development. According to the latest financial data released by Changan Automobile, the total revenue in the first three quarters of this year exceeded 100 billion yuan, an increase of 26.78 percent over the same period last year, with a net profit of 9.882 billion yuan and cash reserves of 72.19 billion yuan. However, Changan Motor's non-net profit in the first three quarters was 3.61 billion yuan, down 5.9% from a year earlier. This is mainly because its merger and acquisition of Deep Blue Automobile generated a profit of 5.021 billion yuan.

4. At the end of the new energy era, everything is being reshaped.

Che Bai.com believes that Changan Automobile urgently needs to solve two major problems: first, the joint venture plate and the independent plate are both ice and fire, and the former is generally declining in terms of sales volume and profitability, while the new energy sector is speeding up in an all-round way. but it's still in the early stages of development.

But Changan Automobile has gone through 160 years of agitation and has been using its own actions to combat uncertainty. From the Shanghai Foreign Artillery Bureau, which was established in 1862, to officially enter the automotive field in 1984; from the production of the first mini hatchback Otto in 1995, to start the third venture in 2017. In the future, it is expected that Changan Automobile will also be able to deliver satisfactory results on the new track.

[full text reference]

[1] Changan Automobile: independent upward Joint Venture Down, Securities Market Weekly

[2] "China's new energy enterprises rank 2023", Zeping Macro

[3] "how far is Changan Automobile from weaning", Yuanchuan Business Review

This article comes from the official account of Wechat: che Bai think Tank (ID:EV100_Plus). Author: Zhou Shuangjiang.

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