Brilliance is going to be cool, and its good cards are being played badly. Is BMW going to "change its mind"?

Introduction: Forging iron requires hard work, so Brilliance Auto should work hard.

As the saying goes, you need to be hard-working in order to forge the iron, and you don’t need to whip up your own strength. Today, Brilliance Auto has spent nearly 30 years proving this eternal truth. Even with profit cows like BMW Brilliance, Brilliance Auto has reached the point of bankruptcy and reorganization.

The incident originated in late October. The 1 billion yuan private placement bond issued by Brilliance Group only paid interest when it matured, and the principal failed to be paid. On November 13, a creditor filed an application for bankruptcy reorganization of Brilliance Group with the court in accordance with the law. On November 20, Brilliance Automobile officially entered bankruptcy and reorganization procedures.

Brilliance Automobile is the leading state-owned enterprise in Liaoning. It owns car brands such as Jinbei, Zhonghua and BMW Brilliance, which everyone is familiar with. But with such a great basic game, everything was messed up in the end. It was really a good hand to start with four, two, and two kings, but it was still a mess. Use 8 words to describe it: sad for his misfortune, angry for his inability to fight.

After 30 years of ups and downs, the glory is gone

In 1992, Brilliance Auto became the "first Chinese stock" listed in the United States. Behind it is a legend that is now rarely known and has mixed reviews. The characters are in harmony. Relying solely on the light commercial vehicle Jinbei Hiace, Brilliance Auto generated revenue of 7 billion yuan a year, and its profit is second only to SAIC Volkswagen and FAW-Volkswagen.

In 1997, Brilliance Auto entered the passenger car market. In 2003, it married BMW to establish BMW Brilliance. From then on, Brilliance Auto began to rely on the profits of the joint venture brand to survive.

This is the highlight moment of Brilliance Auto.

In 2005, the development of Brilliance Automobile fell into development difficulties. Former chairman Qi Yumin was appointed at the critical moment. He worked for 14 years and achieved Brilliance's "ZTE". However, in the face of consumption upgrading and the "new four modernizations" of automobiles, The process went downhill and eventually fell behind.

On April 1 last year, Qi Yumin officially retired and Yan Bingzhe officially took over. For Brilliance Auto, which has a rigid mechanism and a long history of hard work, it will be difficult to get out of the deep quagmire without going through a period of remediation. However, "layman" Yan Bingzhe has remained silent most of the time after taking office, and it is really difficult to achieve the goal of revitalizing Brilliance.

It has been losing money for many years and it is difficult to survive

Judging from Brilliance's financial report, although sales revenue has exceeded 200 billion yuan in recent years, it has become the only company in Liaoning with annual sales revenue exceeding 200 billion yuan. However, Brilliance Auto has actually started losing money many years ago, and its losses are increasing year by year.

In 2019, BMW Brilliance made a profit of 7.626 billion yuan. In the first half of this year, BMW Brilliance contributed another 4.383 billion yuan in net profit to the group.

Man’s calculation is not as good as God’s calculation. It was this year’s epidemic that kicked off this time bomb. Under the epidemic, Brilliance Group's profitability continued to decline, and its market share was unable to maintain normal operations. As long as Brilliance still has the ability to form blood independently, it will not pierce the fig leaf of "no money to repay debts".

The report for the first half of this year shows that Brilliance Group’s total liabilities reached 132.844 billion yuan, the asset-liability ratio was over 71.4, and the balance of cash and cash equivalents at the end of the period was only 32.677 billion yuan, making it impossible to repay debts.

It can be said that in recent years, Brilliance Auto has basically relied on BMW Brilliance and bank loans to survive. If it were not for the joint venture with BMW and the huge profits shared every year, Brilliance Auto would not be able to sustain itself today. After all, Brilliance's own brand segment is already in the red after deducting it.

Bankruptcy and reorganization, is new life in sight?

If you want to say that the automobile market is not good, there is also the popularity of Tesla and Wuling Hongguang MINI EV. If you want to say that the automobile market is good, Brilliance Automobile has filed for bankruptcy and reorganization. Could it be that it really "cannot invest in Shanhaiguan?" ?

In short, although Brilliance is leaning against a big tree like BMW, its good cards are still badly played. Although this reorganization involves the group's own brand segment, the future fate of tens of thousands of employees is unknown. Whether they will leave the company in despair or rebuild their past glory is a question left to time to resolve.

With the decline of the global automobile industry and the process of the "new four modernizations" of automobiles, the winter for traditional automobile companies has already arrived. Those traditional automobile companies that do not have development potential are even more difficult to be optimistic about. Perhaps it is better to go bankrupt early than to go bankrupt late, which will result in more debt! Bankruptcy and liquidation can be regarded as a kind of self-rescue!

At the end of the day, when the tide recedes, you will know who was swimming naked. In the process of the automobile market transforming from a seller's market to a buyer's market, automobile companies have transformed from local "guests" to "bankrupt households" with no money to repay debts. If this bankruptcy and reorganization can completely solve the problems left over from Brilliance's history and achieve self-rescue even if it is broken, it will be a blessing among misfortunes!

But, how many companies are there like Brilliance?

Great Wall BMW, Lang Qingconcubine

With the decline of Brilliance, the one who smiles the most is undoubtedly BMW. If Brilliance really goes bankrupt, BMW can legitimately monopolize Nestlé.

In the beginning, BMW and Brilliance each held 50 shares, which was an equal share. In recent years, Brilliance has declined and its voice has become smaller and smaller. In 2018, the BMW Group announced that it would pay 3.6 billion euros (US$4.2 billion) in 2022 to increase its stake in BMW Brilliance to 75% and gain control of BMW Brilliance. Brilliance's voice and interests will become increasingly smaller.

As Brilliance and BMW gradually draw a clear line, the relationship between BMW and Great Wall Motors has become more "ambiguous". It is reported that Beam Auto is not only expected to put into production all MINI electric vehicles in 2022, but BMW may also transfer the 3 Series to domestic production in a joint venture with Great Wall Motors. It is currently building a BMW 3 Series production line and is expected to mass-produce SOP in 2024.

The brand of BMW Brilliance 3 Series has been very deep. The transfer of production to Beangguang Automobile will be a bigger blow to Brilliance Automobile.

In this regard, BMW Brilliance Vice President Yang Meihong and Great Wall Vice President Fu Xiaokang both said that the report was untrue. However, who can tell whether it is true or false? The melon-eaters are already in place, let’s wait and see.

It goes without saying that Great Wall's management capabilities and marketization level are extremely outstanding, which is difficult for Brilliance Automobile to match and surpasses almost all competitors. Strict and meticulous internal management ensures the reliability of Great Wall Motors' products; excellent cost control ensures high cost performance and operating profits; platform-based and new-generation powertrains allow Great Wall Motors to master industry-leading technology; With the modernization and rejuvenation, Great Wall Motors, which is only 30 years old, has embarked on a new journey of mechanism innovation and organizational culture.

Therefore, many people think that Great Wall has surpassed BMW. In fact, this is not the case, but BMW needs Great Wall. It is the greatest blessing for BMW to find an excellent partner like Great Wall.

Written at the end:

In general, the competition in the automobile market is becoming more and more fierce. New car manufacturers such as Zotye, Huatai, Lifan, Byton, Sailin, and Bojun These forces have been on the verge of factory shutdowns, wage arrears, layoffs, and even bankruptcy. If you want to survive and live well, you can no longer develop cars according to the previous ideas. You must plan and develop according to market demand, otherwise you will not be happy no matter what. Similarly, if Brilliance Auto has value, it will certainly not be allowed to fend for itself, but following market rules is an inevitable choice for traditional car companies.

This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.