Cheetah sells its factory to Geely

On April 27, Geely Holding Group announced that it had officially signed a strategic cooperation agreement with the People's Government of Hunan Province and the People's Government of Changsha Municipality in Changsha to host Changfeng Group Co., Ltd., a provincial state-owned enterprise in Hunan Province. The Changsha factory of Hunan Cheetah Automobile Co., Ltd. is engaged in the production and sales of new energy vehicles.

At the end of last year, there were rumors that after experiencing salary cuts, suspensions, and rumors of bankruptcy, Cheetah Motors would conduct a self-rescue operation, including closing transfer bases, raising funds, debt-for-equity swaps, land resource changes, etc. . The contents include closing the Jingmen, Chuzhou and Changsha bases, leaving only the Yongzhou base; the Changsha factory will be acquired by Geely, the Jingmen factory will be handed over to the government; the Chuzhou factory will be sold.

This also means that the eye-catching news that Geely has taken over the Changsha Changfeng Cheetah Factory has been officially announced. Interestingly, because Cheetah Motors is a provincial state-owned enterprise, in order to prevent the loss of state-owned assets, the official news uses the word "trusteeship". It probably means that Geely will acquire Cheetah Motors' factories and workers through leasing or other feasible methods, and transform them into Geely's new energy manufacturing base. From this, Cheetah can obtain a large amount of funds to save itself.

Industry analysts believe that the news that came out at the end of last year may be Geely's official intervention in negotiations to "acquire" the factory. However, after experiencing the impact of the epidemic in the first quarter of this year, it was difficult for Cheetah Motors to resume work and production, and the financial pressure was increasing. The Hunan Provincial Government had to act quickly to find a "buyer" to obtain funds as soon as possible. In the first quarter of this year, Cheetah Motors sold 141 vehicles, unable to make ends meet, and the situation is not optimistic.

In fact, in the field of passenger car manufacturing in Changsha, only Geely Automobile currently has an advantage in sales volume and market position, while automobile companies such as GAC Mitsubishi, Foton, and Zotye are all in trouble, making the current independent third First of all, Geely Automobile, which has the ability to develop sustainably, is indeed a good choice. Prior to this, Hunan construction machinery giants Zoomlion and Sany Heavy Industry had contacted Changfeng Group to discuss taking over the factory, including previous rumors of acquisition negotiations between Sany Heavy Industry and Junma Automobile.

Hunan is Geely’s base camp in the central automobile market. Geely Automobile has long deployed the Hunan Xiangtan Manufacturing Base, Hunan Geely Automobile Vocational and Technical College, Hunan Technology and Business University Beijin College, and the High-end Auto Parts Industrial Park , the best-selling Vision, Geely Binyue and other models are all produced in Hunan.

For Geely, this move can be described as killing two birds with one stone. On the one hand, it helps in difficulties and earns corporate reputation. On the other hand, Geely is also expected to continue to expand its automotive sphere of influence in Hunan and in the future central and western markets. Gain more market position and share. At the same time, directly owning the factory also provides more convenience for Geely's new energy transformation.

However, for Geely, the continued expansion of production capacity will also bring certain pressure to its development in the sluggish market. According to Geely's 2019 annual report, Geely's current planned production capacity has reached 2.1 million vehicles, but Geely's sales in 2019 were 1.36 million vehicles, and the target sales in 2020 are 1.41 million vehicles, with a capacity utilization rate of less than 70%.

Changfeng Cheetah has a long history. The company was founded in 1950 and was formerly known as the 7319th Factory of the Chinese People's Liberation Army. In October 1996, Changfeng (Group) Co., Ltd. was restructured and established. Transferred to the management of Hunan Province in September 2001, the company introduced Japan's Mitsubishi Pajero light off-road vehicle manufacturing technology in 1995, developed the Cheetah vehicle series, and established an annual production capacity of 30,000 light off-road vehicles.

Cheetah Motors' production scale reached 80,000 to 100,000 units in 2005. It was the largest SUV manufacturer at the time, making the company one of the top 10 automobile manufacturers in China. After GAC Group reached a strategic restructuring agreement with Changfeng Group in 2009, it was renamed GAC Changfeng. Due to old models and poor sales, the Cheetah was delisted in 2012 without the introduction of new models. GAC entered into a joint venture with Mitsubishi, leaving Changfeng Cheetah behind, and Changfeng Cheetah embarked on an independent path.

Though Cheetah Motors was brilliant in the past, it is now in decline. In 2017, when the SUV market was booming, Cheetah Motors achieved the highest monthly sales of 15,000 units with the CS10. However, since then, Cheetah Motors' sales have plummeted. , even after the new product Maitu was launched, the maximum monthly sales volume could only reach more than 1,000 units. Finally, the monthly sales volume fell below 100 units, and the factory was shut down.

Data show that Cheetah Motors’ cumulative sales in 2018 were 86,402 units, which dropped to 33,200 units in 2019, a year-on-year decline of 61.6%.

At the Shanghai Auto Show last year, Cheetah Motors also released a new brand logo and brought a new strategic model, Cheetah Coupe. However, since then, Cheetah Motors has been unable to withstand the continuous decline in sales and popularity. of depression. The crisis of Cheetah Motors has already emerged. Since the beginning of last year, Cheetah Motors has encountered many setbacks such as quality recalls, coaching changes, and salary cuts.

In January last year, Cheetah Motors was plagued by quality problems and finally recalled 140,000 vehicles. In May last year, Changfeng Group, the parent company of Cheetah Motors, was in trouble and the group decided to adjust wages and lay off employees. , ways to reduce burdens and fees to ensure survival and overcome difficulties. Undoubtedly, industry competition has entered a deep-water zone, and the elimination race for the last place has become more and more intense. Cheetah Motors, which is already small and not very competitive, is inevitable.

In addition to the difficulties at the corporate level, dealers and sales are also implicated. News from multiple automobile complaint platforms show that many Cheetah Auto users have problems with product quality, but a considerable number of dealers have already The business was on the verge of bankruptcy, and after-sales services were almost completely shut down when repair parts were not available for a long time. "The car in question has been in the 4S shop for several months. The parts have not arrived. It cannot be driven or repaired. I regret buying this car." Some consumers, desperate, exposed it through the media and TV stations, hoping to promote The manufacturer solves the problem.

An after-sales repair station said that because the Cheetah manufacturer owed money to the logistics company, many accessories were impounded. Entering 2019, Cheetah Motors has gradually increased its chances of standing in the defendant's seat in the court due to problems such as defaulting on payment. Data from Qixinbao shows that from 2017 to 2018, the number of cases involving Cheetah Motors was less than 10. However, throughout 2019, the number of cases involving Cheetah Motors increased sharply, exceeding 70 cases, including 37 pieces of equity freezing information. Problems such as corporate debts and contract disputes are very obvious.

There is no doubt that market elimination is fair, which will also help the mergers and reorganization of China's automobile industry. Car companies without brands, core technologies, and capital will all fail. The Cheetah's problem is not unique in the cold winter of the auto market. Its shutdown and forced downsizing to survive are just a microcosm. In recent years, China's automobile industry has changed dramatically, Suzuki lost, and Changan Suzuki was completely taken over by Changan Automobile; Changan PSA was dissolved, and both Changan Automobile and PSA Group withdrew from the joint venture. In addition, BAIC Yinxiang, Beisu Automobile, Huatai Automobile, Lifan Automobile, Qoros Automobile, etc. have all experienced operating difficulties and their products have stagnated.

The sudden epidemic at the beginning of this year became the "catalyst" for the elimination of the auto market. Jianghuai lost 356 million yuan in advance in the first quarter; Renault of France transferred its 50% stake in Dongfeng Renault to Dongfeng Motor, and Dongfeng Renault sadly withdrew from the field of fuel vehicles; Zotye Motors fell into an operating crisis, with a loss of more than 9 billion in 2019. Chairman Jin Zhejiang Yong has been restricted from consumption; there are also a number of new car-making forces that have fallen into the dilemma of layoffs, salary cuts, and elimination. Especially after the introduction of the new new energy subsidy policy, it has completely blocked the new energy transformation of weak brands. way out.

SAIC Group, which has been declining since 2019, believes in the industry structure and trend analysis that with the economic downturn and the gradual slowdown of market growth, the Chinese automobile market is entering a new stage of stock competition. Due to the impact of the COVID-19 epidemic, my country's macroeconomics and automobile market will face severe tests in stages this year. From the perspective of the industry structure, market concentration is constantly increasing, and weak brands are facing elimination. According to data from the Passenger Car Association, the cumulative sales of the top 15 automakers accounted for 77.7% of total sales in the first quarter, a year-on-year increase of 4 percentage points. The sales concentration is getting higher and higher, leaving fewer and fewer opportunities for weak brands.

"How can an egg be finished under a crowd?" Amid the wailing, those powerful car companies can still overcome the difficulties by adjusting their strategies and cutting back on food and clothing, while those marginal car companies have no way to retreat.

Text/Du Yuxin

-------------------------------- ------------------------------------------------

WeChat Search "Automobile Commune" and "One Sentence Dianping" to follow the WeChat official account, or log in to the "Daily Auto" news network to learn more industry information.

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