Behind Baoneng's frantic digging, is it short of money or anxious?

publish_time: 2021.02.26

         In the past three years, Yao Zhenhua has invested hundreds of billions in the automotive field.


        On February 25, Baoneng Automobile Group announced that Chen Bao, the former president of Beijing Hainachuan Automotive Parts Co., Ltd., a component platform of BAIC Group, will join the company as the vice president of the group, in charge of the components business.


      According to data, Chen Bao joined the Volkswagen Group in 1998 and was responsible for parts procurement, cost control and project management in Volkswagen China, Volkswagen Group headquarters Wolfsburg, and the joint venture FAW-Volkswagen. In 2009, Chen Bao joined Beijing Benz as Executive Vice President, responsible for procurement and localization project management.

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       It is reported that Baoneng Auto Parts Group's business has covered powertrain, seats, interior and exterior decoration, electronic appliances, air conditioning, and intelligent network connection. It owns the powertrain company Shenzhen Zhenyu New Energy Power Technology Co., Ltd., and it will Expand to new energy electric drive systems, power semiconductors, chassis core parts, lightweight parts, autonomous driving, hydrogen fuel cells and other core parts related to new energy vehicles.


        Just two days ago, Baoneng Automobile Group announced that Guan Yu, former vice president of Geely Automobile Group and general manager of the purchasing company, has joined Baoneng Automobile as the group's executive vice president. In the appointment notice, Baoneng Automobile stated that Guan Yu will be fully responsible for the daily operation and management of the automobile group, while the executive vice president of Baoneng Automobile Group Toshiaki Otani assisted in the management of Hongpeng New Energy, Qianhai Qijian and Liandongyun operating units, and gave Guan Yu reports on work.


         As a member of the former Geely Auto, in July last year, Zheng Zhuang, the former general manager of the Geely Geometry Brand Sales Company, left Geely and became the general manager of Baoneng Auto Sales Company.


        It can be seen that since Baoneng entered the automotive industry in March 2017 and established Baoneng Automobile, it has now reached its fifth year. There have been many personnel changes, and the senior management background has also undergone changes from "BAIC", "Nissan" to "Geely".

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         In 2018, Baoneng Automobile successively recruited Li Feng, former member of the Standing Committee of the Party Committee of BAIC Group and President of BAIC Group New Technology Research Institute; Cai Jianjun, former Vice President of BAIC and Secretary of the Party Committee, Executive Director and General Manager of BAIC Sales Company; and the former General Academy of BAIC Research Institute Dean Wu Xuebin and a group of BAIC executives are responsible for the brand building, marketing and research and development of Baoneng Automobile.


         Starting in 2019, Baoneng hired former Nissan Global Director Kazuo Yajima, former Dongfeng Nissan General Manager, Nissan Executive Director and Head of Nissan’s Global Electric Vehicle and Battery Division Toshiaki Otani, and former Nissan-Renault Alliance Vehicle Interconnection Technology Strategy Global Director Nagahara Jushu, former Infiniti vehicle development chief Hirai Toshiro, former Nissan EV vehicle development chief technical director Liu Qiang, etc.


        However, before Guan Yu joined, Baoneng Motor's executive vice president Toshiaki Otani sent an internal email to all employees. The content was mainly about the key work deployment in 2021. Among them, the Qoros brand will arrange for the launch of 5 new models, including 1 A brand-new A+ class sedan, two extended-range electric vehicles, and annual facelifted models of Qoros 5S and Qoros 7.


         In addition, the email also mentioned the high-end car brand that Baoneng Automobile is preparing. The brand's first pure electric vehicle is expected to be released and sold within the year, and will be benchmarked against brand-related products such as Tesla and Weilai.

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          Now that Otani Toshi Ming reports to Guan Yu, can Baoneng's high-end brand be launched as planned?


         Let's look at Guan Yu and Chen Bao. They both focused on the procurement business before. According to data, as a former executive of Geely Automobile Group, Guan Yu has been responsible for global procurement for a long time, helping Geely establish a complete global procurement matrix and brand effect, and once minimized material costs. In the words of Geely Automobile Li Shufu : He saves us billions every year.


Does that mean Baoneng Motors is currently very short of money?


          In fact, since Baoneng built the car, it plans to build 7 major production bases and burn countless money. The continued decline in sales of Qoros cars has brought meager profits, which undoubtedly put a huge test on the cash flow of Baoneng Group.


         According to reports, in the past three years, Yao Zhenhua has invested hundreds of billions in the automotive field, occupying most of the resources and financial resources of Baoneng Group without any return or even dragging down the original real estate business.


         At the beginning of this year, his younger brother Yao Jianhui publicly declared in the company that he would completely withdraw from Baoneng Group because of "inconsistent business philosophy" with Yao Zhenhua. After Yao Jianhui gifted his elder brother Yao Zhenhua with the shares of other companies in the "Baoneng Series", he took away Baoneng Holdings, the main real estate company.


        Yao Zhenhua once said, “In the next 10 to 15 years, Baoneng Automobile Group will strive to become a world-class automobile manufacturer, mobility service provider, and comprehensive service provider, and a heavyweight automobile enterprise group. “I don’t know if I like it.” For Yao Zhenhua, who is "fast in and out", he is really willing to wait for the "long-term return" of the auto industry.

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