Dongfeng exits | with yueda kia 900 million capital to form a new joint venture
The name of the new joint venture will be announced in April.Article | Du Qiaomei on February 7, South Korea, and the people’s government of yancheng city, jiangsu yueda kia group, expand the investment agreement.Kia and Yueda are reportedly planning to form a new joint venture and announce the name of the new company in April.According to the plan, the new joint venture company plans to increase its capital by $900 million. By expanding investment, introducing new models, developing new energy vehicles, and setting up export bases, the company will rapidly increase vehicle sales and capacity utilization.With the launch of a new joint venture between Kia and Yueda, dongfeng Yueda Kia, which will mark its 30th anniversary, has officially become history.According to the industrial and commercial registration information, Dongfeng Yueda Kia was established on September 12, 1992 and operated until September 11, 2022. It was jointly established by Dongfeng Group, Yueda Investment (600805.SH) and Kia Korea, with three equity stakes of 25%, 25% and 50% respectively.On December 17 last year, Shanghai United Equity Exchange’s official website showed that dongfeng Yueda Kia’s 25% equity transfer project has been delisted, the transfer price of 297 million yuan, but the delisting party has not been announced.In the view of the industry, the decline of Kia brand sales in China in recent years and the continuous loss of the joint venture are the main reasons for Dongfeng group’s withdrawal before the expiration of the joint venture.Data show that after the peak sales of 650,000 vehicles in 2016, the sales of Dongfeng Yueda Kia declined all the way. In 2017, the sales of Dongfeng Yueda Kia decreased to 359,500 units, and in 2020, the sales decreased to 249,000 units.That compares with 152,000 in 2021.Sales continue to decline so that dongfeng Yueda Kia business performance is deteriorating.Data show that from 2017 to the first half of 2021, dongfeng Yueda Kia’s net loss was 1.123 billion yuan, 492 million yuan, 1.299 billion yuan, 4.75 billion yuan and 1.371 billion yuan, a cumulative loss of 9.035 billion yuan in four and a half years.On January 29, Yueda Investment released a pre-loss announcement that the annual net profit attributable to shareholders of listed companies in 2021 was -1.268 billion yuan;Net profit excluding non-recurring gains and losses attributable to shareholders of listed companies was -1.49 billion yuan.The main reason for the expected loss of the current performance is dongfeng Yueda Kia Automobile Co., LTD., which is 25% held by the company. Due to the decline in the production and sales of missing core and the price rise of precious metals and other factors, the performance of 2021 will continue to suffer losses, affecting the company’s net profit of about -531 million yuan.However, with the lifting of restrictions on foreign ownership in passenger car manufacturing, the removal of restrictions on the establishment of two or fewer joint ventures for the same type of vehicle products by a foreign investor, and the withdrawal of Dongfeng Group, Kia will also start a new stage of development in China.As the only city in China where Kia’s production base is located, yancheng Municipal government will fully support Kia’s sales expansion in The Chinese market and provide support for kia’s yancheng factory’s export trade.Kia has set a target of producing and selling more than 4 million units in China over the next 10 years.On the one hand, Kia will focus on introducing strategic global models and new energy vehicles.The new models on the market this year will be equipped with a large number of safety configurations and new technology configurations to further improve product performance and market competitiveness, together with Jiahua, Smarrun Ace and other models on sale, to improve kia’s global strategic model lineup.Starting with the all-electric EV6 from next year to 2027, Kia will launch a new EV matrix of six models in the Chinese market every year.At the same time, Kia will actively carry out innovative marketing activities to present the “New Kia” and sustainable future business vision to Chinese consumers.Will focus on the location of dealers, strengthen regional marketing, effectively increase consumer brand experience touch points;At the same time, “door-to-door test drive” and “door-to-door service” will continue throughout the year, so that consumers can test drive new cars and meet the basic after-sales service at home, and enjoy a good brand experience.In addition, the joint venture company will build a new organizational structure, establish an innovative organizational culture, actively introduce local talents and professionals, and accelerate the localization work.”Kia will accelerate the introduction of its Global Kia image in The Chinese market and make more efficient decision-making processes through organizational restructuring,” a Kia source said.In the future, Kia will continue to explore the most suitable management system for the Chinese market.”In addition, the new joint venture company will develop reasonable operating indicators, continuously optimize business policies, reward excellent dealers and other measures to achieve win-win cooperation with Chinese dealer partners.It is worth noting that the year 2022, which coincides with the 30th anniversary of china-SOUTH Korea diplomatic ties and the 20th anniversary of Kia’s entry into China, is also a key year for Kia to deepen its strategy of brand renewal and carbon neutrality in 2045.With the signing, Kia will set up shop in Yancheng based on its turn-around strategy and “All New Kia, All New Start!”Business policy, accelerate the implementation of global strategy, integration of global resources, better feedback to the Chinese market, to provide Chinese consumers with more desirable products and services.