Without dongfeng, can Kia get a new lease of life?
Dongfeng refers to the spring breeze, with revolutionary power and momentum, in the old saying, “everything is ready except the east wind” and “the east wind is not with Zhou Lang, copper bird spring deep lock two Joe” verses, but kia and Dongfeng, but not “good wind by force, send me up the clouds”, only “dongfeng powerless flowers left” suffering.On February 7, 2022, the breakup between Dongfeng and Kia will finally come to an end with kia’s $900 million capital increase, and kia’s new journey will officially begin.From its establishment in 2002, Dongfeng Yueda Kia has gone through 20 years, from the first Qianlima to 650,000 units in 2016, 163,000 units in 2021, and then parting ways with Dongfeng. What kind of history has Kia experienced and what fate will it face?On August 18, 2002, Dongfeng Yueda Kia Automobile Co., Ltd. was officially listed and jointly established by Kia Corporation, Dongfeng Motor Group Co., Ltd. and Jiangsu Yueda Investment Co., Ltd. with 50%, 25% and 25% equity respectively, which was the beginning of the entanglements between Kia and Dongfeng.In the 20 years since dongfeng Yueda Kia was founded, Dongfeng and Kia have also had sweet moments.From 2014 to 2016, the sales volume of Dongfeng Yueda Kia was 646,000, 616,000 and 650,000 respectively, which was also the high point of Dongfeng Yueda Kia. After that, dongfeng and Kia had the idea of separating.From 2017 to 2021, Dongfeng Yueda Kia sold 359,000, 370,000, 289,800, 249,000 and 163,000 units, showing no signs of reversing its downward trend.On November 19, 2021, Dongfeng Motor Group Co., Ltd. publicly listed 25% of its shares in Dongfeng Yueda Kia Automobile Co., Ltd. on Shanghai United Equity Exchange at the listing price of 297 million yuan.On January 12, 2022, Dongfeng Motor Group Co., Ltd. completed the transaction of its 25% equity of Dongfeng Yueda Kia Motors Co., LTD., with Jiangsu Yueda Motor Group Co., Ltd. as the sole bidder.On February 7, 2022, Kia Corporation of Korea, Yancheng People’s Government and Jiangsu Yueda Group.Signing agreements to expand investment.Under the agreement, Kia and Yueda plan to raise $900 million in capital to form a new joint venture.In fact, Kia is prepared for dongfeng’s exit, and it is also urgently needed by Kia, which already regards The Chinese market as its important position and wants to play a decision maker in the enterprise.The new joint venture is a practice of Kia’s philosophy, and kia will expand investment, introduce new models, develop new energy vehicles and set up export bases through the new joint venture. Kia will also improve its vehicle sales and capacity utilization in the Chinese market.The new joint venture company will make great efforts in channels, organizational structure, corporate image and other aspects to build a new organizational structure, explore the most suitable management system for the Chinese market, improve the global image, strengthen talent echelon and talent localization construction.Kia made a big change in 2021, cut off some low-end models, the introduction of the global strategy models kia ka wah and run the Ace, to achieve the brand up positive development, but kia vehicle price and high-end increased pace not recognised by the market, overall sales has no improvement.In the future, Kia will continue to get rid of the label of “cost performance” and continue to adjust its brand upward by improving its global strategic models. At the same time, kia will accelerate the introduction of new energy market. Six brand new electric vehicles will be introduced into The Chinese market in 2027.Kia and Yueda are scheduled to announce a new company name and brand strategy in April 2022, ahead of the Beijing Auto Show, and bring about changes in five aspects, including system investment, brand, management and operation.As for the name of the new joint venture, industry speculation or renamed “Yueda Kia” or “Kia China”, but could not be confirmed.Kia must have its own ideas and plans after parting ways with Dongfeng, as well as ambitions for the Chinese market.However, the market is changing rapidly, and kia has the determination and strategy to do well in the market, but no one can say how it will develop in the future.Did kia get a new lease of life without dongfeng?Bike to motorcycle or Audi to Alto, let’s see how the new Kia performs.