"Independent joint venture" a chicken feather ten years after a dream

publish_time: 2021.01.31

         At the end of 2020 (December 28), Venucia, which had "flyed solo" for nearly four years, returned to Dongfeng Nissan, which once again triggered the industry's discussion on "joint venture independence": the plan to develop independent brands through joint ventures now seems It's more like a yellow beam dream!

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   Ten Years of Huangliang Dream


           In 2008, out of concerns about the hollowing out of China’s automobile technology, and encouraged by relevant national authorities, a number of "joint venture independent" brands gradually emerged, involving most of the mainstream joint ventures at that time, among which the Japanese Honda , Nissan is the most active.


           The first "eating crab" was the concept of Guangqi Honda, followed by Dongfeng Nissan Kaichen, Dongfeng Honda Siming, SAIC GM Wuling Baojun, including North and South Volkswagen Tianyue, Carrier, Brilliance BMW ZINORO, FAW Toyota Langshi, etc. Have entered. However, in just over ten years, most of them have been obliterated in history.


          The industry has long questioned the emergence of "joint venture independence". Xu Bingjin, president of the China-Europe Association for Economic and Technical Cooperation, believes that "joint venture independence" is a false proposition, which can be described as "selling dog meat", "can you be independent after a joint venture? Are intellectual property rights and core technology yours? Others. I came here to occupy the market, can I give you the technology?" In his view, if you do not hold the intellectual property rights and core technology in your hands, you can only be "pseudo-independent."


       The fact is true. Most of the "joint venture and independent" brands have undergone simple modifications to the appearance after the original old models are withdrawn from the market. The internal part is to reduce the configuration and standards, and even directly change the logo and hurriedly listed . For example, the Venus D50 model is derived from Nissan Tiida, the GAC Honda Concept S1 is derived from Honda City, and the SAIC-GM-Wuling Baojun 630 is derived from the Buick Excelle.


         In this regard, some senior industry insiders said that ready-made models can be quickly converted into economic benefits and occupy the market. Who is willing to invest a lot of resources, time, and risk to develop products of independent brands? This fundamentally determines the nondescript status of "joint venture autonomy".

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   "joint venture independent" was beaten back to its original form


         During the "Twelfth Five-Year Plan" period, China's auto market is still in a stage of rapid growth. With the endorsement of joint venture brands, "joint venture independent" may still have a place in the market. However, entering the "13th Five-Year Plan", the Chinese auto market has been down for three consecutive years, coupled with the sudden attack of the new crown pneumonia epidemic, the market has changed from incremental to stock, the polarization has been increasing, and the competitive environment has become more severe, even the "only remaining" "joint venture independent" "——Qi Chen and Bao Jun also seem to be being beaten back to their original form.


        Established in 2010, Venus launched a number of models with the help of Nissan's technology platform. Sales continued to grow and exceeded the 100,000 mark in 2013. In 2017, Venucia officially became independent from Dongfeng Nissan and transformed into a Dongfeng Venucia brand. The 143,000 vehicles that year also became Venucia's sales peak. Subsequently, with the decline in the auto market in 2018, Dongfeng Qichen also entered the downward range. According to data from the China Passenger Transport Association, in 2020, Dongfeng Qichen's sales volume was only 78,000, a year-on-year decline of approximately 36.6%.


         In this return, Dongfeng Qichen changed to the second brand of Dongfeng Nissan Passenger Vehicle Company. According to official sources, Venucia will "continue to leverage its current advantages in new energy and intelligent connectivity, and contribute to the transformation and development of Dongfeng Co., Ltd. toward intelligent, connected, electrified, and shared."


          However, in the new market situation, under the squeeze of strong joint ventures and self-owned brands such as Volkswagen, Toyota, Geely, Great Wall, etc., how many "advantages" can Venus, which retakes the "old road", play? The answer is probably self-evident.

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        SAIC-GM-Wuling Baojun, also born in 2010, has also stepped out of a market curve that is almost the same as that of Venues. Thanks to Wuling, the "shen car", and relying on the rapid development strategy of entering the market at low prices, Baojun became one of the "Million Vehicles Club" in 2017, and its Baojun 510 and Baojun 730 both won the second place in the SUV and MPV markets. Bit.


        However, in 2018, Baojun began to show a trend of weakness, with sales falling by 13.5% year-on-year to 879,100 vehicles. In 2019 and 2020, Baojun sales continued to fall to 600,000 and 402,000, and the decline further expanded to 30.66% and 33.89%.


         The general view on the “declining trend” of the Baojun brand in recent years is that its homogeneous and low-priced products have failed to keep up with the consumption upgrade trend. To this end, Baojun launched the new Baojun brand in 2019, trying to push the brand upward into the high-end market. However, brand building is by no means a thing of the day, only long-term arduous efforts are made on the road of independent innovation.


   Independent innovation is the only way out


        Originating from the joint venture cooperation in the 1980s, the original idea was to establish a joint venture to introduce capital, technology, and more importantly, to cultivate talents while introducing products, thereby realizing the independent development of China's auto industry.


        "Sino-foreign joint ventures are an expedient measure for the initial development of China's automobile industry, and have played a significant role in the development of the industry and the market within a certain period of time." Former Deputy Director of the Department of Automobile of the Ministry of Machinery Industry, Former Executive Vice President of China Association of Automobile Manufacturers Zhang Shulin, the secretary-general, said, "However, Sino-foreign joint ventures are also a'double-edged sword', which to some extent inhibits independent development."


        "It is impossible to strengthen the industry by relying on foreign capital for a long time. Only independent innovation and development is the only way to success." In Zhang Shulin's view, "including FAW, SAIC, Guangzhou Automobile, etc., after the joint venture, they have not developed independently, and then Geely , Great Wall and other opportunities."

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        Insist on independent innovation to make the road of Geely and the Great Wall go wider and wider! Under the severe market environment in 2020, Geely's annual sales volume exceeded 1.32 million units, ranking first in sales of self-owned brand passenger vehicles for 4 consecutive years. Great Wall also hit a record high, with annual sales exceeding 1.11 million vehicles, exceeding one million vehicles for five consecutive years.


       At the same time, Geely and Great Wall have also been in the forefront of high-end brands, and their Lynk & Co and WEY brands have become independent high-end leaders. As Du Fangci, the former deputy secretary-general of the China Association of Automobile Manufacturers, said, “Independent brands insist on high-end development, which is an inevitable trend of enterprise development, because there is no retreat.” In his view, “own brands make high profits through imitation. The era of “China” is already outdated. We must make up our minds to persevere from generation to generation and take the core technology in our own hands, so that independent brands can have hope."

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