FAW's own brand is weak and former “big boss” has retreated to third place

In terms of sales volume, FAW Group has been surpassed by SAIC and Dongfeng for three consecutive years, and it has been far from the throne of the “boss”.

FAW Group, which has been busy listing, has faced difficulties in upgrading its own brands. Although last year in order to strengthen its own brand, both in passenger cars and commercial vehicle companies, FAW Group has deployed a number of senior management from its joint venture company to open up a new situation, but from the current results are not effective.

Some people in the industry believe that FAW Group's independent projects have the responsibilities, rights, and benefits, which is the crux of its own brand stagnation. Deepening corporate reform is one of the issues that need to be considered by the automotive industry in the future.

Retreat to third

According to the latest data from the China Association of Automobile Manufacturers (hereinafter referred to as “China Automobile Association”), the top three companies in the domestic auto group’s sales last year were SAIC Motor’s 4,461,400 units, ranking first; Dongfeng Motor Group’s 3,088,500 units. , ranked second; FAW Group 2,645,900, ranked third.

Chang'an Automobile Group and Beijing Automotive Group all sold more than 1.5 million vehicles, followed closely.

Before 2009, the gap between FAW Group and SAIC Group was not big, and Dongfeng Motor was just following the "little brother" behind China Motors. However, as the latter two continue to exert force on their own brands of passenger cars and even commercial vehicles, FAW Group, which does not advance and retreat, can only be surpassed.

According to the annual report issued by Dongfeng Motor, last year, Dongfeng sold its own brand of commercial vehicles with 606,000 units and sold its own brand of passenger vehicles with 515,000 units. The total sales volume of the main board has exceeded 1 million units.

According to data released by SAIC, last year, the number of self-owned brand cars completed a total of 2,017,017 units of sales, and the average price of self-owned brands of bicycles reached 100,000 yuan. The company completed its own brand set at the beginning of 2012 with an annual sales volume of 200,000 yuan and sales of 200 yuan. Billion's double goal.

In contrast, FAW Group has not been inferior to sales or profits. Although FAW Group did not publicly announce the sales and profitability of various business segments in the past year, the data of China Automobile Association shows that the sales volume of commercial vehicles of FAW Group was 227,700 vehicles last year. According to the sales data released by FAW Xiali (000927.SZ) and FAW Car (000800.SZ), two FAW-listed companies listed by FAW Group, the sales volume of self-owned brand passenger cars of FAW Group was about 300,000.

Although sales of self-owned branded passenger vehicles are higher than that of SAIC Motor, its own-brand passenger vehicles under the China FAW Group include brands such as Hongqi, Pentium, Oulang, Jilin Automobile, Tianjin FAW and FAW Huali. Bicycle profits are not optimistic, especially profits. The higher Hongqi brand is still in the channel construction period, and it is difficult to convert it into real profits. Pentium brand sales dropped by more than 30% last year, drastically lowering the profit of listed company FAW Car. Low-end brands such as Oulang and Senya have lower profit margins.

Comparing the self-owned brand business sector that truly represents the competitiveness of auto companies, the overall competitiveness of FAW Group is declining. FAW Group is the only auto company that has not landed in the capital market among the top three auto groups. The performance of independent brands is inevitably weak. It has brought a big blow to the overall listing financing prospects of FAW Group.

Reform is imminent

FAW Group has been actively promoting the listing process. Six years ago, FAW Group first put the overall listing into the focus of work, and then spent nearly 4 years to complete the main and auxiliary industry divestiture, until July 2010, FAW Group as a whole The listing finally saw the dawn, and the FAW Group planned to reorganize the main business restructuring, and will initiate the establishment of a company limited by shares as the main sponsor. FAW Group will inject FAW Xiali, FAW Car, FAW Toyota's Chinese assets and FAW-Volkswagen's Chinese assets into the overall listing platform of FAW. Last year, FAW was formally established.

However, so far, FAW Group has not yet kicked off the completion of the listing "closed", some analysts believe that the lack of self-owned brand performance is an important factor affecting the overall process of listing.

"The decline in the sales volume of independent brands will not affect the confidence of the overall listing of FAW Group. The overall listing plan is still in progress." An insider of FAW Group said in an interview.

According to the planning of FAW Group, this year is a critical period for independent brands to concentrate their efforts. The most important red flag brand will be officially open to the general consumer market this year. At the same time, the high-end SUV model of Hongqi will be launched. In addition to the previously announced Hongqi H7, this product portfolio will compete in the high-end market. The red flag brand this year will usher in a good historical opportunity - bus procurement in the total amount of compression, will be significantly tilted to the independent brand.

FAW Group has already established a majestic goal to revitalize its own brand. According to FAW Group's “Twelfth Five-Year Plan”, by 2015, FAW Group’s production and sales target will be 4 million, of which the sales target of independent brands will be 2 million.

It is worth mentioning that even though the overall sales volume has been ranked by SAIC and Dongfeng in the past three years, the profits of FAW Group have been rising year after year and have not been postponed. This is due in large part to the multiple profitability of FAW Group. The powerful joint venture company contributed a lot of real money.

According to public information, in 2010, FAW Group’s operating income was 292.7 billion yuan and its profit was 30.7 billion yuan; in 2011, its main business revenue was 346.4 billion yuan, and its profit was 32.39 billion yuan.

With only 60% of FAW-Volkswagen, FAW Group can outperform most of the automakers. "Only one Audi's profit exceeds the profits of dozens of self-owned brand cars," said one industry analyst.

The above analysts believe that with the advantages of joint venture brands and products, state-owned enterprises that share equity in joint ventures only need to enjoy profits, and they can obtain beautiful results. This is the fundamental reason why state-owned enterprises are not making progress and lacking motivation.

This phenomenon has caused great concern in the industry. Li Wanli, deputy secretary-general of the China Association of Automobile Manufacturers, publicly stated in a recent forum that one of the issues that the auto industry needs to consider in the future is to deepen the reform of enterprises.

"For competitive industries, especially for the automotive industry, full authorization should be given under conditions of market economy in the areas of independent decision-making, funding control, and incentive mechanisms, and at the same time the personnel system linked to the official standard should be reformed so as to stimulate state-owned enterprises. Competitiveness," said Li Wanli.

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